Best Practices for Sales Compensation Management Christopher W. Cabrera, Xactly Corporation Jeff Williams, IronPort Systems Track: Sales Operations

Safe Harbor Statement “ Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements the achievement of which involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results 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 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 the integration of Sendia Corporation’s technology, operations, infrastructure and personnel with ours; unexpected costs or delays incurred in integrating Sendia with salesforce.com, which could adversely affect our operating results and rate of growth; any unknown errors or limitations in the Sendia technology; any third party intellectual property claims arising from the Sendia technology; customer and partner acceptance and deployment of the AppExchange and AppExchange Mobile platforms; interruptions or delays in our service or our Web hosting; our new business model; breach of our security measures; possible fluctuations in our operating results and rate of growth; the emerging market in which we operate; our relatively limited operating history; our ability to hire, retain and motivate our employees and manage our growth; competition; our ability to continue to release and gain customer acceptance of new and improved versions of our CRM service; unanticipated changes in our effective tax rate; fluctuations in the number of shares outstanding; the price of such shares; foreign currency exchange rates and interest rates. Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-K for the fiscal year ended January 31, 2006. These documents are available on the SEC Filings section of the Investor Information section of our website at www.salesforce.com /investor . Any unreleased services or features referenced in this or other 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 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, except as required by law.

“ Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements the achievement of which involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results 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 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 the integration of Sendia Corporation’s technology, operations, infrastructure and personnel with ours; unexpected costs or delays incurred in integrating Sendia with salesforce.com, which could adversely affect our operating results and rate of growth; any unknown errors or limitations in the Sendia technology; any third party intellectual property claims arising from the Sendia technology; customer and partner acceptance and deployment of the AppExchange and AppExchange Mobile platforms; interruptions or delays in our service or our Web hosting; our new business model; breach of our security measures; possible fluctuations in our operating results and rate of growth; the emerging market in which we operate; our relatively limited operating history; our ability to hire, retain and motivate our employees and manage our growth; competition; our ability to continue to release and gain customer acceptance of new and improved versions of our CRM service; unanticipated changes in our effective tax rate; fluctuations in the number of shares outstanding; the price of such shares; foreign currency exchange rates and interest rates.

Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-K for the fiscal year ended January 31, 2006. These documents are available on the SEC Filings section of the Investor Information section of our website at www.salesforce.com /investor .

Any unreleased services or features referenced in this or other 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 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, except as required by law.

Christopher W. Cabrera Founder, President and CEO Xactly Corporation [email_address]

Xactly Corporation The leader in automated on-demand sales compensation management 100% pure-play on-demand Multi-tenant application/multi-tenant database Services Oriented Architecture (SOA) Flexible, rules-based compensation engine Hosting facility – MCI’s MAE – West, SAS 70, Type II Headquartered in San Jose, CA Executive staff – 30+ years of combined sales compensation domain experience “ A new paradigm in automating sales compensation”

The leader in automated on-demand sales compensation management

100% pure-play on-demand

Multi-tenant application/multi-tenant database

Services Oriented Architecture (SOA)

Flexible, rules-based compensation engine

Hosting facility – MCI’s MAE – West, SAS 70, Type II

Headquartered in San Jose, CA

Executive staff – 30+ years of combined sales compensation domain experience

Xactly Corporation Benefits to Sales and Finance Automate manual tasks - SOX Align payments to performance Improve sales rep behavior Create competitive advantage

Benefits to Sales and Finance

Xactly Corporation Benefits to Sales Drive better performance Increase revenue On-line commission statements Contests, SPIFs Model future commissions On-line comp plans with electronic signature Enhance Performance Legally

Benefits to Sales

Drive better performance

Increase revenue

On-line commission statements

Contests, SPIFs

Model future commissions

On-line comp plans with electronic signature

Xactly Corporation Benefits to Finance SOX compliance - According to recent study – 91% of spreadsheets have errors Companies typically spend between 8-10% of gross revenues in compensation (ex. 150 sales people x $80,000=$12M) Reduce error rates Model plans, organizations, SPIFs, scenarios Revenue analysis Maximize profitability Being a non-conformist is fun… except when it comes to SOX!

Benefits to Finance

SOX compliance - According to recent study – 91% of spreadsheets have errors

Companies typically spend between 8-10% of gross revenues in compensation (ex. 150 sales people x $80,000=$12M)

Reduce error rates

Model plans, organizations, SPIFs, scenarios

Revenue analysis

Maximize profitability

Xactly Corporation Who is Being Paid Variably? Direct sales reps/managers Indirect sales reps/managers Telesales reps/managers Channel reps/managers OEM reps/managers Marketing reps/managers Systems engineers/managers

Who is Being Paid Variably?

Direct sales reps/managers

Indirect sales reps/managers

Telesales reps/managers

Channel reps/managers

OEM reps/managers

Marketing reps/managers

Systems engineers/managers

Xactly Corporation Who is Managing the Headache? Compensation administrator Financial analyst Sales operations Finance operations

Who is Managing the Headache?

Compensation administrator

Financial analyst

Sales operations

Finance operations

Xactly Corporation How Is It Managed Today? Predominantly calculated using Excel Most companies pay 30 days in arrears Usually provide an Excel spreadsheet statement with payment Rarely provide web-based reporting during the month Companies tend to “dumb down” their compensation plans Some companies over complicate their plans

How Is It Managed Today?

Predominantly calculated using Excel

Most companies pay 30 days in arrears

Usually provide an Excel spreadsheet statement with payment

Rarely provide web-based reporting during the month

Companies tend to “dumb down” their compensation plans

Some companies over complicate their plans

Inexpensive Error Prone Poor Reporting Limited web-based visibility Leapfrog the On-Premise Paradigm Manual On-Premise On-demand Rich functionality Web-based reporting SOX Compliance Expensive: License HW 9-12 mos install Upgrades Rich functionality Web-based reporting SOX Compliance No software license No hardware Rapid Installations No Upgrades

Inexpensive

Error Prone

Poor Reporting

Limited web-based visibility

Rich functionality

Web-based reporting

SOX Compliance

Expensive:

License

HW

9-12 mos install

Upgrades

Rich functionality

Web-based reporting

SOX Compliance

No software license

No hardware

Rapid Installations

No Upgrades

Incent on discount percent Don’t just pave the cow paths

Incent on discount percent

“I pay commissions on the NET revenue- So I am discouraging discounting” You decide to sell your $1M home Sign a real estate agent to represent you – 3% Your real estate “sales” person is excited Because when they sell your house they get $30,000. First day on market you get an offer for $900k What is your agent incented to do? There is a better way?

You decide to sell your $1M home

Sign a real estate agent to represent you – 3%

Your real estate “sales” person is excited

Because when they sell your house they get

$30,000.

First day on market you get an offer for $900k

What is your agent incented to do?

There is a better way?

Incent on discount percent Vary commission rates by product Pay on margin Don’t just pave the cow paths

Incent on discount percent

Vary commission rates by product

Pay on margin

“ I pay commissions on ALL products so I am incenting my reps to sell ALL the products ALL the time” Not all products are created equal Reps WILL take the path of least resistance Reps WILL gravitate to the higher value products Low margin – high revenue High margin – low revenue

Not all products are created equal

Reps WILL take the path of least resistance

Reps WILL gravitate to the higher value products

Incent on discount percent Vary commission rates by product Pay on margin Create SPIF’s or contests Don’t just pave the cow paths

Incent on discount percent

Vary commission rates by product

Pay on margin

Create SPIF’s or contests

“ I pay commissions on ALL products ALL the time, so I don’t need to use SPIF’s” SPIF’s can move obsolete products SPIF’s can encourage learning about new products SPIF’s can allow for quick competitive responses SPIF’s can be FUN! SPIF’s work.

SPIF’s can move obsolete products

SPIF’s can encourage learning about new products

SPIF’s can allow for quick competitive responses

SPIF’s can be FUN!

SPIF’s work.

Jeff Williams Vice President of North American Sales IronPort Systems [email_address]

IronPort Systems Leading gateway security provider for organizations ranging from small businesses to the Global 2000 100 sales reps in 35 countries INDUSTRY: Email/web security EMPLOYEES: 400+ GEOGRAPHY: Global PRODUCT(S) USED: SFA, Service & Support # USERS: 100+

Leading gateway security provider for organizations ranging from small businesses to the Global 2000

100 sales reps in 35 countries

IronPort Systems – Key Challenges Business Challenges Excel-based system for managing sales compensation was no longer meeting the company’s needs adequately Changing/working with large amounts of data (100+ sales professionals) in a spreadsheet was a nightmare Sales reps “flying blind” – no real time visibility Technology Challenges Separate CRM and sales compensation systems Desire to leverage and extend Salesforce investment

Business Challenges

Excel-based system for managing sales compensation was no longer meeting the company’s needs adequately

Changing/working with large amounts of data (100+ sales professionals) in a spreadsheet was a nightmare

Sales reps “flying blind” – no real time visibility

Technology Challenges

Separate CRM and sales compensation systems

Desire to leverage and extend Salesforce investment

IronPort Systems – The Solution Solution Criteria Leveraged existing Salesforce investment Reduce TCO of compensation management Capex Opex Data security and SOX compliance Seamless integration

Solution Criteria

Leveraged existing Salesforce investment

Reduce TCO of compensation management

Capex

Opex

Data security and SOX compliance

Seamless integration

IronPort Systems – Results What were the results? Improved margins Rapid deployment Improved compliance and reporting operations Increased trust and efficiencies from a sales perspective Ultimately increased sales productivity

What were the results?

Improved margins

Rapid deployment

Improved compliance and reporting operations

Increased trust and efficiencies from a sales perspective

Ultimately increased sales productivity

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Christopher W. Cabrera Founder, President and CEO Jeff Williams Vice President, North American Sales QUESTION & ANSWER SESSION