Salesforce.com 2014 Annual Report Download - page 12

Customers
We sell to businesses of all sizes. The number of paying subscriptions at each of our customers ranges from
one to hundreds of thousands. None of our customers accounted for more than five percent of our revenues in
fiscal 2014, 2013, or 2012.
Sources of Revenue
We derive our revenues primarily from subscription fees for our service. We also derive revenues from
premier support, which provides customers with additional support beyond the standard support that is included
in the basic subscription fee.
We recognize subscription and support revenue ratably over the contract term, beginning on the
commencement date of each contract. The majority of our professional services contracts are on a time and
materials basis, for which we generally recognize revenue as the services are rendered.
Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue,
depending on whether the revenue recognition criteria have been met. Deferred revenue primarily consists of
billings or payments received in advance of revenue recognition from subscription services described above and
is recognized as the revenue recognition criteria are met. Unbilled deferred revenue represents future billings
under our subscription agreements that have not been invoiced and, accordingly, are not recorded in deferred
revenue. We generally invoice customers in annual or quarterly installments. Deferred revenue and unbilled
deferred revenue are influenced by several factors, including new business seasonality within the year, the
specific timing and duration of large customer subscription agreements, the timing and compounding effects of
customer renewals, varying billing cycles of subscription agreements, invoice timing, foreign currency
fluctuations and new business linearity within the quarter.
Sales, Marketing and Customer Support
We organize our sales and marketing programs by geographic regions, including the Americas, Europe, and
Asia Pacific, which includes Japan. The majority of our revenue from the Americas is attributable to customers
in the United States. Approximately 30 percent of our revenue comes from customers outside of the Americas.
Direct Sales
We sell our services primarily through our direct sales force, which is comprised of telephone sales
personnel based in regional hubs, and field sales personnel based in territories close to their customers. Both our
telephone sales and field sales personnel are supported by sales representatives, who are primarily responsible for
generating qualified sales leads. Our small business, commercial and enterprise account executives focus their
efforts on small, mid-size and large enterprises, respectively.
Referral and Indirect Sales
We have a network of partners who refer sales leads to us and who then assist in selling to these prospects.
This network includes global consulting firms, systems integrators and regional partners. In return, we
typically pay these partners a fee based on the first-year subscription revenue generated by the customers whom
they refer. Also included in this network are ISVs, whom we typically pay a percentage of the subscription
revenue generated by their referrals.
We continue to invest in developing additional distribution channels for our subscription service.
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