Salesforce.com 2016 Annual Report Download - page 60

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Research and Development.
Fiscal Year Ended
January 31, Variance
Dollars(in thousands) 2016 2015
Research and development ...................... $946,300 $792,917 $153,383
Percent of total revenues ....................... 14% 15%
Research and development expenses were $946.3 million, or 14 percent of total revenues, for fiscal 2016,
compared to $792.9 million, or 15 percent of total revenues, during the same period a year ago, an increase of
$153.4 million. The increase in absolute dollars was primarily due to an increase of $114.0 million in employee-
related costs, an increase of $8.2 million in stock-based expense, an increase of $18.2 million in development and
test data center expense, and an increase in allocated overhead. We increased our research and development
headcount by 16 percent since January 31, 2015 in order to improve and extend our service offerings and develop
new technologies. We expect that research and development expenses will increase in absolute dollars and may
increase as a percentage of revenues in future periods as we continue to add employees and invest in technology
to support the development of new, and improve existing, technologies and the integration of acquired
technologies.
Marketing and Sales.
Fiscal Year Ended
January 31, Variance
Dollars(in thousands) 2016 2015
Marketing and sales ........................ $3,239,824 $2,757,096 $482,728
Percent of total revenues .................... 49% 51%
Marketing and sales expenses were $3.2 billion, or 49 percent of total revenues, for fiscal 2016, compared to
$2.8 billion, or 51 percent of total revenues, during the same period a year ago, an increase of $482.7 million.
The increase in absolute dollars was primarily due to increases of $304.7 million in employee-related costs,
including amortization of deferred commissions, $112.0 million in advertising expense costs, $12.5 million in
amortization of purchased intangibles, $2.7 million stock-based expense and $40.4 million in allocated overhead.
Our marketing and sales headcount increased by 21 percent since January 31, 2015. The increase in headcount
was primarily attributable to hiring additional sales personnel to focus on adding new customers and increasing
penetration within our existing customer base.
General and Administrative.
Fiscal Year Ended
January 31, Variance
Dollars(in thousands) 2016 2015
General and administrative ...................... $748,238 $679,936 $68,302
Percent of total revenues ........................ 11% 13%
General and administrative expenses were $748.2 million, or 11 percent of total revenues, for fiscal 2016,
compared to $679.9 million, or 13 percent of total revenues, during the same period a year ago, an increase of
$68.3 million. The increase was primarily due to an increase of $39.0 million in employee-related costs, an
increase of $8.1 million in bad debt expense, an increase of $2.2 million in stock-based expense and an increase
in professional and outside services. Our general and administrative headcount increased by 16 percent since
January 31, 2015 as we added personnel to support our growth.
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