Salesforce.com Earnings Call Nuggets: Social Enterprise and Hiring

Salesforce.com Inc (NYSE:CRM) reported its third quarter earnings and in its subsequent conference call, the company answered the following analysts’ questions we thought you’d like to know.

Social Enterprise

Laura Lederman – William Blair asked: Can you talk about when you’re selling social enterprise, mainly Chatter, is it the monetization at that point in time relatively small versus a Sales Cloud and the Service Cloud? Are you selling a lot of social enterprise with clients? Have you spent a lot of time in the quarter doing so?  Does that lead to less short-term revenues than the other cloud even though you sell the seat since they’re less expensive?

Marc Benioff – Chairman and CEO responded: No, in fact we had greater large transaction in this quarter than we have ever had in the third quarter. We had spectacular deal flow and those large enterprise transactions are all architectured around being social enterprises.

As we look at what’s happening in the fourth quarter and to fiscal year  2013, we’re seeing more and more social enterprise transactions; they are not really what I would say slower uptake. I would just say that we have a highly differentiated product.

We are able to architect larger transactions and deliver to our customers a much broader solution. When you look at some of these large transactions that we closed in the quarter like Verizon (NYSE:VZ), Electronic Arts (NASDAQ:ERTS),  General Electric (NYSE:GE) and Maersk USA–some of the big premiere transactions.

I think that what you’d see is that they really all signed with us because we are able to deliver to them the social platform and that other companies aren’t really ready to deliver that today.

Corporate Hiring

Tom Ernst – Deutsche Bank asked: You mentioned the ramp to productivity for sales people in hiring; your investment in headcount has been pretty aggressive this year, roughly 46 percent year-on-year. Will you invest more aggressively as we look forward to next year?Are you looking to further accelerate hiring or is your point that it takes a while for what you’ve done already to ramp?

Graham Smith – EVP and CFO responded: No, I reminding people about the basics of our model.

I know we’ve obviously going through a little bit (indiscernible) times but when we are in this mood–when we were hiring as aggressively as we are–it means we feel really good about our business. We’ve just had a record quarter of hiring.

We expect we’re going to have another record in the fourth quarter. We have the visibility into the pipeline, the sales productivity and our sales capacity–that’s what we’re focused on building for next year.

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