Salesforce.com Earnings Call Insights: Cloud Hype and Seasonality
Hype in Cloud and Social
Tom Ernst – Deutsche Bank: Marc, I’d like to ask you a question that’s kind of in the thread of common question I get from investors about the balance between the hype in cloud and social versus is it real, so the question I’ve got for you is, if we look at kind of the downfall of some of the last generation technology like Seibel, it was almost that they were too successful selling and never got the usage and adoption. As your business is kind of continuously evolving here from a viral adoption to more strategic purchase, how are you changing the organization to make sure that you are connecting with the customer, driving success, and are you actually measuring that success staying high and sustainable?
A Closer Look: Salesforce.com Earnings Cheat Sheet>>
Marc Benioff – Chairman and CEO: Well, I think, the most exciting thing that’s happening this week certainly is the Facebook IPO tomorrow, and there is a couple of exciting things about Facebook. Number one is that we’ve just never seen an application, or complex application of this size, this scale with a billion registered users, half of them who log in everyday, and you just have to take a step back and just say, wow, in terms of adoption, and the new user interface models that have been created there like the feed, the status update, profiles, groups, I mean we’ve been talking about this now for some time in our various forums. I am, number one, just in awe of that. Number two, you just see the level of interactivity between users as really just all inspiring. We’ve really adopted as fast as we can those user interface models into our business and then brought them of course to the mobile platforms, brought them into the social platforms with Salesforce Chatter, and into our core business, which is our Sales Cloud, our Service Cloud, our Marketing Cloud and our social enterprise platform built on Chatter. And you see in – if you go to trust.Salesforce.com, our transaction volumes have just been really awesome. I mean you – we are just anticipating this first 1 billion transaction day at Salesforce.com. You can see days this week where we’ve hit 800 million transactions. I mean that’s just awesome. The question will be, when are we going to have 1 billion transactions a day? And I think you probably can see that those are happening faster than never before to between 210 and 240 milliseconds per transaction. That’s usage, that’s growth that’s adoption and that’s what we are focused on. The only reason we are successful at Salesforce (NYSE:CRM) is because our customers are successful and that’s what we focus on everyday is, is the customer successful. That’s our number one value in our Company, the trust that we have with our customer in making them success. Then after that it’s really all about creating that customer for life experience where they are bringing their data, their business process into our services, and then of course it’s the day-in and day-out execution of our business that you’ve seen now as we have delivered. Next month will be, I think, our eight years as a public company, since we went public in, I think, it was June 2004, right. So, I mean, it’s been consistent levels of execution, and those are really the things that we are focused on, and I think, it’s – we’ll continue to focus on those things, and that will create the success and the companies, maybe who have come before us, and have not been as successful, as we have been – I think, it’s – they just weren’t focused on the customer success at the end of the day, and I know that seems quite basic, but there’s different ways to running a company, and different motives, and that’s ours.
Adam Holt – Morgan Stanley: Congrats on a great start to the year. My question is about the off balance sheet number, that’s an eye popping number and obviously there is a big client that’s contributing to that. But could you maybe walk through some of the elements behind that quarter-on-quarter increase in the off balance sheet number, and how should we be thinking about the seasonality of that numbers through the duration of the year?
Graham Smith – EVP and CFO: Adam, hi. This is Graham. Yeah, of course, the large customer we signed the largest in our history, the nine figure deal would certainly help that backlog number significantly, but we also had some big renewals in the quarter. And when – clearly we have large customers with large annual order values renewing for multiple years, that’s very encouraging to us, and really helps add to that backlog number. So, we did a great job on renewals this quarter. As you heard we finally got to a low teens attrition rate, which is great. And I do point out, we still see our average contract length between 12 and 24 months, so it’s not like this number is getting skewed or anything like. So, we’re still in that 12 to 24 months average contract length, but we’re just renewing – we’re renewing well, we’re renewing often, we’re renewing for longer contract periods, and that’s just really helping reduce that overall backlog number.