Last week’s Announcement of Salesforce.com first quarter’s results revealed an annual revenue forecast of better than $2b for 2011. Very good.
However, the numbers below the top line reveal that Salesforce.com’s prior accelerated growth rate is tamed. Should we be sad about it?
We think not. Prior-year growth figures were in the order of a mega 80%, while the current year-over-year growth rate is 34%. This is not meager but stupendous, given that Salesforce.com is growing from a larger asset base and given the overall CRM market is not enjoying such a lavish growth figure.
Growth Drivers
Salesforce.com’s earlier growth came to a great degree from additional sales. At present, its growth of an additional $125 million is partly fueled by the acquisition of complementary companies.
These acquisitions both fill holes in Salesforce.com’s CRM offering as well as fast-track Salesforce.com’s entry into adjacent markets. Last month’s acquisition of Radian6 is a case in point.
Salesforce.com At A GlanceFiscal First Quarter Results |
First Enterprise Cloud Computing Company to Exceed $2.0 Billion Annual Revenue Run Rate
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The acquisition of this social intelligence firm could accelerate Salesforce.com’s dominance in the social and socialCRM and platform markets. This acquisition complements its continuous releases of new products for adjacent markets.
The acquisition of Radian6 in particular extends the value of Salesforce.com’s existing products like Sales Cloud, Service Cloud, Chatter and Force.com.
Key to Success
It’s ability to integrate its series of acquisitions such Radian6 will determine Salesforce.com’s long range success.