Salesforce steamrolls toward $10 billion revenue goal

Salesforce reported its earnings on Thursday, and on almost every level, it has to be considered a success. The world’s most successful SaaS vendor continued to march toward $10 billion in annual revenue, with CEO Marc Benioff boldly predicting in the earnings call, the company would reach that lofty height in the 2018 fiscal year (next year).

Before we look at the significance of an almost $10 billion SaaS vendor, let’s look at the numbers. The company generated 2.14 billion in revenue for the 2017 third quarter. That’s up from $1.71 billion for the same period last year.

Salesforce is in a foot race of sorts with rival Oracle to see which company can reach $10 billion in cloud revenue first. Ultimately, it’s a silly contest because Salesforce is hitting territory no pure SaaS vendor has ever approached in becoming a $10 billion company.

In fact, CNBC reports that the company is looking well past $10 billion, even as it approaches that short-term goal. Now, CEO Marc Benioff is looking to double that to $20 billion in the next 3-4 years, which would be truly astonishing growth rate if they can achieve it.

To put this in perspective, according to data provided by PWC, in 2014 (which appears to be the most recent numbers in its data set), Salesforce generated approximately $4.2 billion in software revenue. That’s about two quarters worth of revenue if  you doubled yesterday’s report. What’s more, it puts the company in some heady territory, possibly leap-frogging HP, VMware, EMC and Symantec to the fifth place in the world for software revenue. Of course, many of these vendors sell more than software, but the fact that a SaaS vendor has moved this far, this quickly is a huge deal.

Putting it in perspective

Looking at some other cloud companies for comparison, Adobe’s revenue is around $5 billion, Workday is just over a billion and Box is just under $400 million. It shows you what a sheer SaaS powerhouse Benioff has built at Salesforce. But keep in mind, it’s taken 17 years to get to this point.

Salesforce went public way back in 2004, and as the previously cited numbers show, they have been like a slow train leaving a station, gaining speed and revenue along the way. It’s used an aggressive acquisition strategy to grow the company, adding over 40 companies since inception, according to Crunchbase, and spending over $5 billion on 10 companies, this year alone.

This has allowed the company to grow quickly by offering a broad integrated portfolio, which has proven attractive to customers. As Benioff told CNBC, this integrated platform has been key to the company’s success:

“We have an integrated platform. And that integrated platform is exciting, not only is it the number one sales cloud in the world…. But it has all these other capabilities: Mobility, AI, analytics, and so forth. And so I think that, when I look at the most incredible things our customers have done, they weave these things together in really smart and creative ways,” he told CNBC.

All of this is not only good news for Salesforce, and for the cloud in general, it bodes well for cloud companies that have gone public more recently who have seen modest revenue growth. These companies can look at Salesforce, and know if they stick with it, offering a good product, the sales will come over time, especially as more companies find their way to the cloud.

Photo Credit: TechCrunch on Flickr. Used under CC by 2.0 license.

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