Salesforce.com continues strong customer growth

Hosted sales management software provider Salesforce.com is closing in on 200,000 paying subscribers, an 80 percent gain in its customer base from this time last year, the company said this week as it announced its third-quarter financial results.

Salesforce.com edged past analyst expectations with quarterly revenue of US$46.4 million, up 82 percent from last year's third quarter, and net income of US$2.2 million. The company reported per-share earnings of US$0.02. The consensus forecast of analysts polled by Thomson First Call was for US$0.01 in per-share earnings.

Salesforce.com expects revenue of US$172 million to US$174 million in its 2005 fiscal year, which ends Jan. 31. While that's small compared to others in the CRM (customer relationship management) market -- market leader Siebel Systems had revenue of US$1.4 billion last year -- Salesforce.com's rapid customer growth has drawn attention to its hosted, subscription sales model. Its customer base is tilted toward smaller companies: As Salesforce.com grows, its average deal size remains around 15 licensed users.

Salesforce.com said it ended the quarter with 195,000 paying subscribers. For its 2006 fiscal year, the company projected revenue of US$275 million to US$285 million.

In Australia, Salesforce.com claims to have signed over 200 customers since launching a couple of years ago. It is currently in the processing of finalizing a deal with Pacific Publications which decided to jettison its Siebel package for the Salesforce.com hosted solution.

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Stacy Cowley

IDG News Service
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