Salesforce.com's Q2: on track for $4 billion run rate
- Summary:
- Oracle and Salesforce.com have come to a new understanding but as the cloud CRM firm lurches towards a $4bn a year run rate, could a similar state come with SAP?
Non-GAAP earnings for the quarter saw revenue of $957 million, up 31% year-over-year, comfortably beating Wall Street expectations of $939.2 billion.
Second-quarter profit rose to $76.6 million or $0.12 per share, compared to a loss of $9.8 million or $0.02 per share last year. That won't last: third quarter expectations are for a loss of $0.19 to $0.18 per share.
Nonetheless CEO Marc Benioff had good reason to sound upbeat on the results call following the announcement, declaring himself never to have been so excited about Salesforce.com - which for a man who speaks fluent superlatives is obviously saying something.
New bromance?
The last quarter of course saw the 'reunion' of Salesforce.com and Oracle as the two forged their new understanding.
But Benioff also seemed keen to build an unstated rapprochement with SAP, continuing the trend of recent quarters of less rival-bashing and aligning Salesforce.com as a complementary offering.
He cited a major customer win with food services giant Sysco as a case in point:
Over the last two years, Sysco has been standardizing on Salesforce as it CRM platform across sales service and marketing wrapping its SAP implementation.
An incredible relationship, where Salesforce is the front-end and SAP is the back-end and delighted amounts that in the quarter Sysco decided to bring the Salesforce platform into the core of its company-wide Sysco 360 initiative and we are looking forward to helping Sysco deliver on its vision of enriching their customers experience and driving growth.
Sysco is one of the most exciting companies in the world in its industry and we are delighted to be partnered with Sysco and delighted to be partnered with the SAP and delivering this incredible capability.
The olive branch does seem to be being offered to SAP to come to a similar deal as Oracle, although whether we should hold our breath for a bromance with Hasso Plattner is a moot point.
But Benioff makes the case that the 'old guard' - the legacy back office as he describes them - have a lot to gain from palling up with Salesforce.com:
Companies like Oracle and SAP who have not been able to bring their product lines to the cloud, who have not been able to make the movement to social, who have not been able to make the movement to mobile can benefit from alliances with Salesforce.com, with our brand luster, with our innovation.
You heard in the quarter a phenomenal call between myself and Larry Ellison, where Oracle has announced that they are going to be using Salesforce.com as their CRM. That was incredible to hear Larry talk about that. Certainly it's my hope and I believe that we will be able to develop and trade a similar alliance with SAP.
I believe it's in the interest of their customers and our customers that Salesforce works well with Oracle. It works well with SAP and even works well with Microsoft because our customers have these existing investments that we want to leverage.
That SAP relationship is a great relationship with, as I mentioned this quarter, the huge success with Sysco where we were able to take their huge investment in SAP back office and put on a customer facing capability that they badly needed but SAP was not able to deliver for them.
I believe there are a lot of SAP customers that are in a similar position, who can use highly customized applications - maybe with our Force.com platform or even with our primary capabilities of our sales and service cloud.
Certainly when Benioff talks about:
incredible new relationships with AIG, Bristol-Myers, Fiat, Hitachi, Home Depot, Johnson & Johnson, Juniper, Mercedes-Benz, National Australia Bank, [Novartis], Pfizer, Procter & Gamble, [JHM], Sony, Western Union and Yahoo!
it is interesting to note how many of these names are also flagship SAP customers.
Luxury item
Elsewhere on the customer front, anyone who's attended any major Salesforce.com customer gathering in recent years will be familiar with the Burberry moment, when the luxury apparel's massive investment in Salesforce.com social technology takes centre stage. It sounds like that's paying off with Benioff highlighting wins with a number of other luxury brands including Louis Vuitton"
Louis Vuitton is revolutionizing their experience for customers in more than 460 stores around the world with a new mobile client telling app powered by our Sales, Service and Platform clouds.
More than 3,000 sales associates will soon have relevant customer insights right at their finger tips allowing to deliver personalized experience with a high standard of luxury and innovation that Louis Vuitton is known for.
Verdict
Reasons to be cheerful at the end of a remarkable quarter with some significant milestones on the near horizon in terms of run-rates.
But will one significant milestone be realised? Will Larry Ellison walk out on stage at the Dreamforce conference in November? He wasn't flagged up as a star guest when Benioff plugged the event - Green Day and Yahoo's Marissa Mayer got top billing - but of course Ellison did commit to attending during that conference call earlier in the year.
Perhaps we need to wait and see if Benioff makes his own cameo appearance at Oracle OpenWorld in a couple of weeks time?
Disclosure: Oracle, Salesforce.com and SAP are premium partners of diginomica.