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Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
Dreamforce 2013 Investment Community Presentation
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Dreamforce 2013 Investment Community Presentation

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Presentation from the analyst day at Dreamforce 2013

Presentation from the analyst day at Dreamforce 2013

Published in: Investor Relations
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  • 1. The $10 Billion Playbook Graham Smith, CFO David Havlek, SVP, Finance November 19, 2013
  • 2. Safe Harbor Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of salesforce.com, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of product or service availability, subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services. The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, new products and services, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, the outcome of any litigation, risks associated with completed and any possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling non-salesforce.com products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of salesforce.com, inc. is included in our annual report on Form 10-K for the most recent fiscal year and in our quarterly report on Form 10-Q for the most recent fiscal quarter. These documents and others containing important disclosures are available on the SEC Filings section of the Investor Information section of our Web site. Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements.
  • 3. The Internet of Customers Connected Customers Connected Partners Connected Products Connected Devices cloudsocial mobile Connected Employees
  • 4. The Age of the Customer 1900 1960 1990 2010 Age of manufacturing Age of distribution Age of information Age of the customer Mass manufacturing makes industrial powerhouses successful Global connections and transportation systems make distribution key Connected PCs and supply chains mean those that control Information dominate Empowered buyers demand a new level of customer obsession  Source: Forrester Research, Inc.; Competitive Strategy in The Age Of The Customer, October 10, 2013
  • 5. David Havlek SVP, Finance Financial Update
  • 6. The First Cloud Computing Company to Deliver a $1 Billion Quarter. . . Q113 Q213 Q313 Q413 Q114 Q214 Q314 $695 $732 $788 $835 $893 $957 $1,076 $ millions 36% Q3’14 growth y/y 37% Q3’14 CC growth y/y $81M Q3’14 contribution from ET
  • 7. Americas Remains the Dominant Geography Note: Percentages represent FY’14 YTD constant currency revenue growth. Dollars represent FY’14 YTD revenue by region. EMEA +37% $531M APAC +18% $315M Americas +35% $2.1B
  • 8. Transactions Growth Outpaces Revenue Growth 47% Q3’14 growth y/y 99.9% average availability in Q3’14 >40% of transactions are from API callsQ411 Q412 Q413 Q314 100 0 Transaction volume in billions
  • 9. Greater Customization Leads to Greater Usage FY09 FY10 FY11 FY12 FY13 FY14 YTD Standard Objects Custom Objects 1/4 2/3 Proportion of custom objects to total objects 64% total object count growth y/y Our Innovation Our Customers’ Innovation
  • 10. Note: Chart reflects dollar attrition as a percentage of revenue when compared to the year-ago period for Sales Cloud, Service Cloud and the Force.com Platform. Q411 Q412 Q413 Q314 Usage and Customization Drive Declining Attrition 17 straight quarters of decline <1/2 Enterprise attrition compared to Commercial attrition 20% 10% 0%
  • 11. -$1 $0 $1 $2 $3 FY11 FY12 FY13 YTD FY14 Customer Base Supports Continued Revenue Growth Ratio of Average Annual Attrition to Add-On/Upgrade Sales Note: Excludes Renewal Business. For every $1 of attrition, we add more than $2 of new business from our existing customers $1 of Attrition
  • 12. Strong Growth in Deferred Revenue Continues. . . $ millions Q113 Q213 Q313 Q413 Q114 Q214 Q314 $1,335 $1,337 $1,292 $1,863 $1,733 $1,746 $1,670 $44 $65 $1,790 34% Q3’14 growth y/y 34% Q3’14 CC growth y/y ExactTarget deferred revenue $1,735
  • 13. …and Shift to Annual Invoicing Continues Note: Annual invoicing dollars as a percent of total invoicing dollars, excluding Heroku and ExactTarget Marketing Cloud. Q112 Q113 Q114 Q212 Q213 Q214 Q312 Q313 Q314 57% 63% 68% 56% 64% 69% 57% 65% 72% 7 point improvement Q3’14 y/y
  • 14. Off-Balance Sheet Backlog Evidence of Increasing Strategic Role Note: Backlog represents approximate balance of business that is contracted but not invoiced, rounded down to nearest $100M. 1. Represents total booked business on- and off-balance sheet. Q113 Q213 Q313 Q413 Q114 Q214 Q314 $2.7 $2.8 $3.0 $3.5 $3.6 $3.8 $4.2 $ billions ~40% Q3’14 growth y/y >24mo avg. contract length ~$6B Q3’14 booked business1
  • 15. Non-GAAP Margins Reflect Growth Investment Choices 75% 80% 85% 90% FY10 FY11 FY12 FY13 FY14 YTD 0% 5% 10% 15% FY10 FY11 FY12 FY13 FY14 YTD • M&A • Oracle Agreement • Services Mix • Hiring • M&A • Events CRM Total Sub & Support Note: Non-GAAP measures exclude the effects of stock-based compensation, amortization of purchased intangibles, and net non-cash interest expense. A complete reconciliation of GAAP to non-GAAP measures can be found at www.salesforce.com/investor. 80.0% FY’14 YTD gross margin 9.7% FY’14 YTD operating margin Gross Margin Operating Margin
  • 16. Employee Base has Doubled Since FY11 FY10 FY11 FY12 FY13 Q314 3,969 5,306 7,785 9,801 12,770 37% Q3’14 y/y growth ~2,100 from acquisitions YTD Full-time employee headcount
  • 17. Real Estate Remains Largest Single CapEx Category $45 $ millions $29 $51 $51 $54 $103 $73 1. Includes data centers, hardware, internally developed software, ExactTarget, IP licensing and other capital expenditures. CapEx Drivers • Real estate • Cap. software • Datacenters Q113 Q213 Q313 Q413 Q114 Q214 Q314 Real Estate Other1
  • 18. Strong Operating Cash Flow Growth with Consistent Yield 1. Estimated FY’14 impact to operating cash flow from the acquisition of ExactTarget as of June 4, 2013. FY10 FY11 FY12 FY13 YTD FY14 YTD OCF Q3 YTD CapEx % of Revenue $ millions Q3 YTD OCF Yield $271 $459 $592 $604 $737 33% growth ytd y/y 19% 24% 21% 21% 21% 5% 5% 7% 6% 8% Q4 OCF Low-teens percentage growth FY’14 OCF guide ~$80M FY’14 OCF impact from ExactTarget1
  • 19. Operating Model Framework
  • 20. Revenue Growth is Our Priority 1. Op. Margin is non-GAAP. Non-GAAP measures exclude the effects of stock-based compensation, amortization of purchased intangibles, and net non-cash interest expense. Note: Framework does not take into consideration the impact from potential future acquisitions. High Growth Top Line Priority >30% Revenue Growth Flat to Up Slightly Op. Margin1 OCF Growth < Revenue Growth Growth Top & Bottom Line Priority 20%-30% Revenue Growth +100-300bps Op. Margin1 OCF Growth ~ Revenue Growth Low Growth Bottom Line Priority <20% Revenue Growth +200-400bps Op. Margin1 OCF Growth > Revenue Growth Mid-30% op margin at maturity
  • 21. Fastest Growing Enterprise Software Company Growth has always been our top priority . . .and it shows Note: Represents Top 20 largest enterprise software companies by revenue. Growth rates based on analyst consensus.
  • 22. Now the Eighth Largest Enterprise Software Company But we have much larger ambitions, and scale matters Note: Represents Top 20 largest enterprise software companies by revenue. Revenue estimates based on analyst consensus.
  • 23. We Are Defining an Industry Largest enterprise software companies characterized by:  Platform standard  Best-in-class apps  Broad ecosystem Note: Represents Top 20 largest enterprise software companies by revenue. Revenue estimates based on analyst consensus.
  • 24. Graham Smith CFO The $10 Billion Playbook
  • 25. Investing For Continued Growth TechnologyMarkets Distribution
  • 26. ERP: $36.8BCRM: $22.1B The Enterprise Software Landscape in 2013 BI: $22.7B HCM $2.9B 6.9% IT Helpdsk $1.5B 6.2% Finance Mgmt $10.7B 7.2% SCM $9.2B 10.4% HRMS $4.3B 6.9% Travel Exp Mgmt $0.7B 6.9% Asset Mgmt $1.5B 6.7% Manufg / Ops $6.0B 7.6% Analytic Apps $5.1B 8.7% BI Tools $9.0B 6.5% Sales $5.5B 14.2% Service $7.5B 12.8% Marketing $4.4B 21.0% E-comm $3.5B 13.2% Collaboration: $8.5B Platform: $21.1B Web Conferencing $2.3B 10.4% Enterprise Content Mgmt $5.0B 10.5% App Development / Deployment $17.0B 7.8% Account & Contact Data $1.2B / 4.9% Data Integration & Quality $4.1B 10.5% DBMS – Relational $8.6B 7.2% Current TAM Emerging TAMTAM (2013)$xxB Not Addressed CAGR (’13-’17)xx% Team Collaboration $1.2B 14.7% Market Market or Submarket Source: Gartner, Inc., Enterprise Software Markets, Worldwide 2010-2017, 3Q13 Update 9.16.13.
  • 27. Our TAM Continues to Grow Source: TAM includes Sales, Service, Marketing, Platform, Chatter, Data.com and Work.com. Market size data is sourced from Gartner, Inc., Enterprise Software Markets, Worldwide, 2010-2017, 3Q13 Update 9.16.13. $58B 2017 estimate in 2013 $40B 2017 estimate in 2012 14% #1 CRM market share in 20122013 2014 2015 2016 2017 $30 $32 $34 $37 $40 $37 $41 $46 $52 $58 2012 TAM 2013 TAM Salesforce.com Total Addressable Market
  • 28. Marketing Automation
  • 29. ExactTarget Expands Salesforce TAM. . . ERP: $36.8B HCM $2.9B 6.9% IT Hlpdsk $1.5B 6.2% Finance Mgmt $10.7B 7.2% SCM $9.2B 10.4% HRMS $4.3B 6.9% Travel Exp Mgmt $0.7B 6.9% Asset Mgmt $1.5B 6.7% Manufg / Ops $6.0B 7.6% Collaboration: $8.5B Platform: $21.1B Web Conferencing $2.3B 10.4% Enterprise Content Mgmt $5.0B 10.5% App Development / Deployment $17.0B 7.8% Data Integration & Quality $4.1B 10.5% Team Collaboration $1.2B 14.7% BI: $22.7B BI Tools $9.0B 6.5% DBMS – Relational $8.6B 7.2% Analytic Apps $5.1B 8.7% CRM: $22.1B Sales $5.5B 14.2% Service $7.5B 12.8% Mktg $4.4B 21.0% E-comm $3.5B 13.2% Account & Contact Data $1.2B / 4.9%
  • 30. . . .and Marketing Automation is the Fastest Growing Segment 20% of 2013 CRM market >2x market size by 2017 2013 2014 2015 2016 2017 $3.4 $3.8 $4.2 $4.7 $5.2 $4.4 $5.3 $6.5 $7.8 $9.5 2012 TAM 2013 TAM Salesforce ExactTarget Marketing Cloud Total Addressable Market Source: Gartner, Inc., Enterprise Software Markets, Worldwide, 2010-2017, 3Q13 Update 9.16.13.
  • 31. Every Consumer is Now a Customer. . . Connected Customers Connected Employees Web Stadium Store Community Connected Partners EmailSocialMobileProduct Connected Experiences
  • 32. 5 Billion Smartphones by 2017 Your Bank . . .and They Are Always Connected
  • 33. ExactTarget: Early Success Leveraging Salesforce Distribution >60% of total opportunities from lead pass are net-new >50 deals closed from lead pass to date Net-New ExactTarget Customer Net-New Salesforce & ExactTarget Customer Net-New ExactTarget Customer
  • 34. Pardot: Early Success Leveraging Sales Cloud and Distribution ~60% of total opportunities from lead pass are net-new >80 deals closed from lead pass to date Net-New Pardot customers since acquisition
  • 35. Every App Needs to be Connected 1. Source: 2013 State of the CIO Survey; CIO Magazine, January 2013 Complexity Dev. Costs Security Maintainence 65% 65% 63% 48% CIOs’ Mobility Challenges2 #1 priority of mobility in CIO survey1 2. Vanson Bourne for Mobile Helix: Survey of 300 UK and US CIOs at firms over 1001 employees; August 2013. Source: eWeek, Mobile Application Deployment Hampered by Cost, Security Concerns; Nathan Eddy, 08.01.2013 Best in class apps connected through APIs
  • 36. Sales Service Marketing AppExchange Cloud . Social . Mobile . Connected 1 Platform for connecting the next generation of devices, apps, and customers Introducing the Salesforce1 Platform
  • 37. We Built Salesforce1 With an API First Approach Metadata & UI APIs Organize Salesforce data, UI & layouts Data APIs Query core CRM object data APIs Data in / Data out 10X increase in API functionality 230+ calls, services and methods +100 core developers to build S1
  • 38. Salesforce1 is THE Next Generation Customer Platform Build Apps, Connect Devices New Salesforce1 APIs Unify Your Salesforce Experience New Salesforce1 App Connect Every Customer 1:1 New Customer Engagement Engine
  • 39. 10% 12% 14% Q113 Q213 Q313 Q413 Q114 Q214 Q314 Salesforce1 and ExactTarget Drive R&D Investment 35% R&D headcount growth y/y Note: Non-GAAP measures exclude the effects of stock-based compensation, amortization of purchased intangibles, and net non-cash interest expense. A complete reconciliation of GAAP to non-GAAP measures can be found as www.salesforce.com/investor. Non-GAAP R&D Expense as a % of Revenue
  • 40. Proven Enterprise Success with Large Untapped Opportunity 1.Based on Fortune Magazine’s annual ranking of the top 500 corporations worldwide, measured by revenue. ~50% Global 5001 pay us $0 a year <700 Customers pay us >$1 million a year
  • 41. Proven Distribution Leadership President and Vice Chairman President, Global Enterprise Sales EVP, Worldwide Alliances & Channels EVP, Industries Keith Block Tony Fernicola Tyler Prince EVP, Commercial Sales Brian Millham Vivek Kundra
  • 42. Industry Strategy: Speak Our Customers’ Language Public Sector Rapid Response 311 Mobile Communities Financial Services Capital Markets Retail Banking Healthcare Healthcare Providers Medical Devices Automotive Retail Communication/Media Connected Cars Dealer Communities Customer Networks Clienteling Applications Agent Console Ad Management
  • 43. SIs Accelerate Vertical Penetration “This year, salesforce.com will overtake Oracle Siebel as the most deployed CRM application by large consultants and SIs.“ – Gartner2 5x increase in certifications over 3 years ~200%-400% y/y growth in bookings, pipeline and trained resources for SI partners ~$5.2B IT service market for SIs related to salesforce.com solutions1 1. Gartner Competitive Landscape 2. Gartner: CRM Applications Deployed by Consultancies
  • 44. ISVs Extend Vertical Solutions Healthcare & Life Sciences +80%1 Mfg & Supply Chain +228%1 Public Sector +122%1 Financial Services +109%1 900 ISVs >2,000 Apps >2,000,000 Installs 1. Percentages represent growth in number of apps during FY13.
  • 45. ISVs Extend Horizontal Reach 900 ISVs >2,000 Apps >2,000,000 Installs
  • 46. ISVs Building Revenue Momentum >125ISVs paying >$100k annually 15 2 yrsTime from launch to $100K 3 yrs >15ISVs paying >$1M annually 1 900Signed ISV partners 200 >20KNet-new deals closed by ISVs 7K FY12 FY14 YTD
  • 47. $1 Billion Quarter on Way to $10 Billion Decade Q405 Q406 Q407 Q408 Q409 Q410 Q411 Q412 Q413 Q314 Quarterly Revenue $35m $1.08b
  • 48. Investing for Continued Growth Innovation Secures our future Speeds up innovation Depth Focus on solutions Enterprise penetration Breadth Expands opportunity Increases customer value

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