Earnings Call Insights: Demand and Adoption Trends

On Tuesday,, Inc. (NYSE:CRM) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.


Philip Winslow – Credit Suisse: Marc, I just want to get a sense of what you’re seeing across the various clouds in terms of demand and any change you’re seeing there against the sales, marketing and then obviously it being overall Service Cloud 2?

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Marc Benioff – Chairman and CEO: Well, we’ve of course had some great success with the sales cloud which has become a multi-billion dollar product line for us and right behind that we have had the Service Cloud which we just have seen some extraordinary results last year and this year and we are very optimistic in terms of that becoming another billion dollar product line for Salesforce and right behind that of course you see the speed and the rapid delivery of platform and these remain kind of the three major horses in the race to become our three core $1 billion businesses. Now, we’re making of course a major investment as you know through acquisition as well as organic development with our marketing cloud and in addition to that we are going to have an incredible success with, but at our core, we remain very uniquely focused on sales service and platform right now.

Adoption Trends

Mark Murphy – Piper Jaffray: Wondering, if you can update us on adoption trends for the platform, we seem to be encountering more CIOs of Fortune 1000 companies who are formulating these multiyear three to five year plans where they are trying to move back office applications on the and so to the extent that you might be seeing that kind of deeper commitment what do you think is driving it and also just separately can you comment on whether Hurricane Sandy had any type of impact on the business?

Marc Benioff – Chairman and CEO: Well, I think the number one thing that you are seeing with is absolutely something that we have been pursuing over a very long period of time. Of course, we are the very first Company to ever use the term platform as a service and we believe there is no faster way to build and deploy an application than a platform as a service and the reason why you’re seeing an acceleration of that in your surveys and why we’re seeing an acceleration of that in our bookings and our revenue and why the Salesforce Platform is the world’s number one enterprise platform and continues to be our fastest growing product line is because more and more companies are moving to delivery of next generation apps, especially mobile apps and as they look to mobile apps they are looking to and that is becoming a rapid application development deployment vehicle for those mobile applications, you saw that at Dreamforce, you saw us deliver our own Dreamforce application which was a touch friendly application that ran on iPads and iPhones, ran on Windows 8 tablets, ran on Kindles all of these things were easily used to access our Dreamforce app and that is the use case for our customers. They want to build applications that they can build once and run across all of these things, not just their traditional desktops like their Dell and HP workstations, but also their next generation deployment systems and we’re showing customers how they can build these next general mobile apps and we also released a book at Dreamforce that we had to reprint during the conference because we were giving out tens of thousands of copies of how to use our mobile software development kit. So that includes our APIs, which let you deep – dig in and execute mobile applications. You can deliver mobile apps using our system, you can deliver mobile apps using our APIs, you can do some incredible things with the platform and these are things that honestly not very many other enterprise software companies have had in mind in the last few years and we’re getting tremendous traction from that and that’s why more than 800,000 developers have coded the 345,000 apps and at Dreamforce you saw the developer enthusiasm and – not that we haven’t had developer enthusiasm before, but it’s definitely turned into a mania and that’s been very exciting for us and it’s a huge tip of our hat to our platform group which has done a great job not just this year or last year, but over the last decade they’ve been working on this. So, it’s very exciting.

Graham Smith – EVP and CFO: I was just going to follow-up. We saw, obviously, some difficulty closing some of the deals in the quarter because of Sandy, but I wouldn’t characterize it as having a significant impact on the close of the quarter.

A Closer Look: Earnings Cheat Sheet>>