Business Analysis of Salesforce.com

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Salesforce.com

SALESFORCE.COM

Business Overview

Salesforce.com, inc. develops enterprise cloud computing solutions with a focus on customer relationship management. The company offers Sales Cloud to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence, and collaborate around sales on desktop and mobile devices, as well as solutions for partner relationship management. It also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connects their service agents with customers on various devices; and Marketing Cloud to plan, personalize, and optimize one-to-one customer interactions. In addition, the company offers Commerce Cloud to deliver a digital commerce experience; Community Cloud to create and manage branded digital destinations for customers, partners, and employees; Internet of Things Cloud that provides insights to companies enabling them to sell, service, and market to their customers in personalized ways, as well as engage with them in real time; and Analytics Cloud that enables employees across an organization to explore business data, uncover new insights, make decisions, and take action from various devices. Further, it provides Salesforce Quip, a next-generation productivity solution for teams with a mobile-first strategy to collaborate without email; and Salesforce Platform for building enterprise apps. Additionally, the company offers professional cloud services, such as consulting, deployment, training, user-centric design, and integration to facilitate the adoption of its solutions; and architects and innovation program teams, as well as various education services comprising introductory online courses and advanced architecture certifications. Salesforce.com, inc. offers its services through direct sales; and through consulting firms, systems integrators, and other partners. The company was founded in 1999 and is headquartered in San Francisco, California.

Salesforce.com

Salesforce.com


R&P Rank: 410
Sector: Technology
Industry:Software
H.Q Location:California
Website: www.salesforce.com
Company Address:
THE LANDMARK, ONE MARKET STREET STE.300
Ph:415-901-7000

Business Analysis of Salesforce.com

The Technology Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Salesforce.com compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Salesforce.com to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Salesforce.com with an interactive chart.

  1. Revenue Growth: Salesforce.com reported a revenue growth of 24.1% year-on-year during 2016. Software Industry grew at 0.9% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Salesforce.com spent 24.8% of its total revenues on COGS. Software industry average (COGS share of revenue) in the same period was 34.0%
  3. R&D share of Revenues: As a percentage of revenue, Salesforce.com spent 14.2% of its total revenues on R&D. Software industry average R&D spending in the same period was 14.8%
  4. SG&A share of Revenues: As a percentage of revenue, Salesforce.com spent 59.8% of its total revenues on Sales, Marketing, and General Administration (SG&A). Software industry average SG&A spending in the same period was 30.8%
  5. Inventory share of Revenues: Salesforce.com Inventory share of Revenues details are not available because either company does not share the data or we do not have it
  6. Accounts Payable share of Revenues: As a percentage of revenue, Salesforce.com invested 20.2% of its total revenues on Accounts Payable (A/P) Software industry average Accounts Payable investment in the same period was 6.2%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Salesforce.com invested 37.4% of its total revenues on Accounts Receivable (A/R). Software industry average Accounts Receivable investment in the same period was 19.4%
  8. PP&E share of Revenues: As a percentage of revenue, Salesforce.com invested 25.7% of its total revenues on Property, Plants, and Equipments (PP&E). Software industry average PPE investment in the same period was 15.8%
  9. Intangibles share of Revenues: As a percentage of revenue, Salesforce.com invested 66.9% of its total revenues on Intangibles. Software industry average Intangibles investment in the same period was 62.4%
  10. Net Margins: Salesforce.com Net Margins in the year 2016 were -0.7%. Software industry average Net Margins in the same period were 13.6%

Sector and Industry Association of Salesforce.com

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Salesforce.com is associated with Technology Sector and Software Industry.

Technology sector is comprised of the following industries: Computers Systems and Peripherals; Software; Semiconductor; IT Consulting and Outsourcing Services; Networking Equipment and Services; Internet; Other. The definitions for each of the industries is as follows:

  • Computers Systems and Peripherals industry includes companies primarily engaged in manufacturing of personal computers, servers, mainframes, workstations, and other computer accessories and peripherals such as storage drives, mice, keyboards and printers. It also includes manufacturers of mobile phones and tablets.
  • Software industry includes businesses providing software products such as operating systems, productivity suites, enterprise software, data and analysis software, advertising and marketing software, engineering and manufacturing software, networking software, and IT management software. It also includes companies providing industry-specific software focused on different sectors such as Financials, Automotive, Telecom, Utilities, Travel, Real Estate, Media, and Publishing.
  • Semiconductor industry includes companies primarily engaged in manufacturing and distribution of semiconductor products such as microprocessors, chipsets, motherboards, flash memory, and wired and wireless connectivity products. It also includes companies that provide semiconductor equipment and services to the semiconductor industry.
  • IT Consulting and Outsourcing Services industry includes companies primarily engaged in providing information technology consulting and outsourcing services to other businesses. The services include IT consulting, systems integration, application development and management, IT infrastructure management, and network operations management.
  • Networking Equipment and Services industry includes companies primarily engaged in manufacturing and distribution of networking and communications equipment for transporting data, voice, and video traffic across intranets, extranets, and the Internet. The key products include routers and switches for local and wide-area networks, cable modems, teleconferencing equipment, and wireless access points.
  • Internet industry includes Internet-based businesses providing products and services such as search engines, social networking, web hosting, email, domain name registration, and eCommerce. It also includes industry information/services portals focused on different sectors such as Financials, Automotive, Travel, Health, Real Estate, Media, and Publishing.
  • Other industry includes companies providing products such as photocopiers, fax machines, point of sale machines, audio/video technologies, and video games. It also includes technology companies that are not part of other six technology industries.

Industry Ranking of Salesforce.com

With $6.7 billion revenues, Salesforce.com ranked number 4 of all the companies in the US Software industry. There were a total of 140 public companies in the US Software industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Software industry by revenues during 2016 were:

  1. Microsoft ($85.3 billion)
  2. Oracle ($37 billion)
  3. VMWare ($7.1 billion)
  4. Salesforce.com ($6.7 billion)
  5. Adobe Systems ($5.9 billion)
  6. Intuit ($4.7 billion)
  7. CA Technologies ($4 billion)
  8. Symantec ($3.6 billion)
  9. ScanSource ($3.5 billion)
  10. Citrix Systems ($3.4 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Salesforce.comand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of salesforce-com

Microsoft (MSFT) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Microsoft Corp with $85 billion revenues in the year 2016 was the number 1 Software company. Read this report to know the top competitors of Microsoft and identify growth and cost optimization opportunities of Microsoft

Oracle (ORCL) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Oracle Corp with $37 billion revenues in the year 2016 was the number 2 Software company. Read this report to know the top competitors of Oracle and identify growth and cost optimization opportunities of Oracle

VMWare (VMW) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

VMWare Inc with $7 billion revenues in the year 2016 was the number 3 Software company. Read this report to know the top competitors of VMWare and identify growth and cost optimization opportunities of VMWare

Adobe Systems (ADBE) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Adobe Systems Inc with $6 billion revenues in the year 2016 was the number 5 Software company. Read this report to know the top competitors of Adobe Systems and identify growth and cost optimization opportunities of Adobe Systems

Intuit (INTU) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Intuit Inc with $5 billion revenues in the year 2016 was the number 6 Software company. Read this report to know the top competitors of Intuit and identify growth and cost optimization opportunities of Intuit

CA Technologies (CA) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

CA Technologies with $4 billion revenues in the year 2016 was the number 7 Software company. Read this report to know the top competitors of CA Technologies and identify growth and cost optimization opportunities of CA Technologies

Revenues Analysis

Salesforce.com (CRM) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Salesforce Com Inc (CRM) from 2012 to 2016. Salesforce.com generated a total of $6.7 billion revenues during 2016. Salesforce.com reported a revenue growth of 24.1% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in January.

Salesforce.com (CRM) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Salesforce Com Inc (CRM) from 2002 to 2016. Salesforce.com generated a total of $6.7 billion revenues during 2016. Salesforce.com reported a revenue growth of 24.1% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in January.

Salesforce.com (CRM) Revenue Growth Comparison With Industry Growth From 2012 To...

This report provides a comparison of Salesforce Com Inc (CRM) revenue growth with Software industry growth during the last five years from 2012 to 2016. Salesforce.com reported a revenue growth of 24.1% year-over-year during 2016. The Software industry growth was 0.9% year-over-year during 2016. Salesforce.com growth was faster than the industry during 2016.