Carolina SaaS Users Group

Kevin Egan,

Regional VP, Corporate Sales

Salesforce.com

May 2007

Agenda

Origins of SaaS

Today‟s marketplace

Salesforce.com‟s approach

Q&A

Source: Gartner Inc.,

The Consumer Web Platforms

Q: Why can’t business applications

be as easy as the Consumer Web?

A: (they can… )

Everything is Going SaaS!

No applications market is untouched…

Office

https://www.google.com/hosted http://smallbusiness.yahoo.com/email/

www.zimbra.com

many others…

Word

www.writely.com

www.writeboard.com

www.inetword.com

many others…

Spreadsheets

www.numsum.com

www.irows.com

many others…

Database

www.dabbledb.com

www.Lazybase.com

www.quickbase.com

many others…

www.buildonline.com

www.blinksale.com

many others…

Document Mgmt

www.pxn8.com

www.pixoh.com

many others…

Graphics

www.linkedin.com

www.plaxo.com

many others…

Contacts Project Mgmt.

www.basecamp.com

www.jot.com

www.dreamfactory.com

many others…

Agenda

Origins of SaaS

Today‟s marketplace

Salesforce.com‟s approach

Q&A

Source: Gartner Inc.,

Software as a Service – What is it?

An application owned, delivered and managed

remotely by one or more providers

Where the provider delivers an application based

on a single set of common code and data

definitions, which are consumed in a one-to-many

model by all contracted customers at any time

On a pay-for-use basis or as a subscription based

on usage metrics

Source: Gartner Inc.,

What is Multi-Tenant On-Demand?

Faster Innovation

Economies of Scale

Scalability

Automatic Upgrades vs.

Key Benefits of SaaS

Why the Business Side Loves SaaS

Low, predictable costs

Easy to use, up and running in

weeks

Subscription model demands

attentive providers

Lower Risk

Greater Success

Why IT Love SaaS

Easier to customize and integrate

Always on latest technology

More responsive to business

Frees up resources spent on

maintaining existing systems

Focus on Delivering

Strategic Value

On average, about 70 percent of all IT-related projects fail to meet their objectives. - InfoWorld

Agenda

Origins of SaaS

Benefits

Today‟s marketplace

Salesforce.com‟s approach

Q&A

Source: Gartner Inc.,

31% Growth

(CAGR) for On-

Demand CRM

61% Growth

In Enterprise Adoption

of SaaS

25-50%

Penetration

of Software Industry

By 2009-2013

2004 2010

$2 Billion 25%

61%

2005 2006

SaaS is Replacing On-Premise Faster than

Anyone Imagined…

Success with On-Demand Solutions Causes SaaS To Explode CIO Priority Resolution -- Start a Significant Software-as-a-Service

Implementation as a Trial and Education

“51 percent of organizations are using at least one on-demand

application.” --- Nucleus Research and KnowledgeStorm

“Software as a Service market potentially exceeds 40% of the total

software market - or $50 billion by 2009.” --- TripleTree

“63% of companies with more than 1,000 employees have adopted

some on-demand technology, while 46% of those with fewer than

1,000 employees have.” --- Nucleus Research and KnowledgeStorm

(Sources: TripleTree, SOFTWARE AS A SERVICE UPDATE, Q4 2006 and CRM Buyer

Study: More Large Firms Now Deploying On-Demand Apps, By Erika Morphy, Feb. 12,

2007)

(Source: Gartner 2007)

SaaS Distribution in 2005 by Application

Type and Vertical Market

0

5

10

15

20

HR Finance Compliance Other Doc. Mngt .

0

5

10

15

20

Gvt Retail Other Media

By Application

By Vertical Market

Percent

CRM Procur è rent Collaboration

FS Man Uti IT

Percent

CRM Consulting Web Conferencing Sales Performance Wireless

Applications

Sales Intelligence Hosted Contact

Center

Marketing & Sales

Acceleration

On Demand

Integration

Quickbooks

Integration

Wireless

Infrastructure

Information

Mapping

CRM Consulting

Sales Prospecting Accounting

Integration

Tools Hosted Contact

Center

Data Quality

Toolset

Technology

Services

Email Marketing Email Integration Wireless CRM Wireless CRM Channel

Intelligence

Marketing

Tools Integration Wireless Devices &

Applications

Tools Wireless Tools

Pen-based

Automation

Billing Data Management Voice Access ERP On Demand Integration

SaaS – Beyond CRM

Salesforce.com’s Partner Ecosystem Over 5,000 Developers and 200 ISVs – and Growing Rapidly

Agenda

Origins of SaaS

Today‟s marketplace

Salesforce.com‟s approach

Q&A

Source: Gartner Inc.,

Customer Use of Salesforce.com Has Evolved

CRM

Applications

• Sales

• Marketing

• Service & Support

Customized

and Integrated

• Meta Customizations

• Rich Web Services

Integrations

ERP Legacy

Platform

Customers building

new On-Demand

apps

Ecosystem

Partners building

integrated solutions

Directory

Directory of

On-Demand

Business Apps

Why is Everyone So Excited About The

AppExchange?

251+ Applications

8,600+ Installed Applications

122,000+ Test Drives

Numbers as of May 15, 2006

—Nicole Miller

Operations Analyst

TARGUS Information Corp.

What’s on The AppExchange Directory?

Apps from

Salesforce.com

Partner Apps

Apps from the

Community

Components

• Installed and

customized a quoting

app from the

AppExchange

• Developed a

sophisticated purchase

order system

• Extended the

AppExchange Project

Management App to suit

Altium‟s needs

• Rapid deployment of

critical business

applications

• Reduced application

support burden for IT

• IT can now focus

attention on strategic

activities like getting

Altium‟s products to

market

Altium used the AppExchange Platform to deploy six critical

business applications in only four weeks

Alan Perkins CIO

Altium Corporation

Sales

Sales

Service & Support

Marketing

Campaigns

Customer Requests

Quoting

Purchase Orders

Project Management

Electronic Components

Unlimited Edition

Q&A

What Opportunities Does The AppExchange Present

Ease of Integration

• Email Marketing

• Internet Telephony

• Data Quality

• Configuration Tools

Automate More

Business Processes

• Operations

• Human Resources

• Finance

• Administration

Extended CRM

• Pre - Sales Processes

• Sales and Marketing Productivity

• Vertical Expertise

• Post - Sales Business Processes

What is the value of all of these apps and

components?

What if you take advantage of the best ideas

from a community of 30,000 customers?

What if you could get partner solutions

that worked „out of the box‟?

What if you could extend your

success with salesforce.com to

other departments?

Ease of Integration

Automate More

Business Processes

Extended CRM

Consistent Growth in Customers Success in Selling to Companies of All Sizes

Based on publicly available customer and subscriber numbers. Bars represent fiscal quarters.

27,100 Paying Customers

October 31, 2006

Total Customers

Fiscal Year

Proven Scalability and Performance Delivering 60 Million Transactions Daily

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3,500,000,000

4,000,000,000

FY05

Q1

FY05

Q2

FY05

Q3

FY05

Q4

FY06

Q1

FY06

Q2

FY06

Q3

FY06

Q4

FY07

Q1

FY07

Q2

FY07

Q3

0

200

400

600

800

1,000

1,200

1,400

Total Transactions

Per Quarter

Average Page

Response

Page Response

Time (ms)

Total

Transactions

per quarter

Salesforce Winter ’07 is Live for 556,000 Users 21st Generation of Success

Biggest Release

Massive Innovation

Gartner: On Demand TCO Lower Over 5 Years

On-Demand Costs

Year 1 Year 2 Year 3 Year 4 Year 5 Total

Subscription $336K $336K $336K $336K $336K

Subtotal $336K $336K $336K $336K $336K $1.7M

On Premise Costs

License $500K $500K

Maintenance $100K $100K $100K $100K $400K

DBA Support $135K $135K $135K $135K $135K $675K

Upgrades $150K $150K

Hardware $100K $100K

Subtotal $735K $235K $235K $485K $235K $1.825M