Salesforce success attributed to CEO engagement (NYSE: CRM) announced yet another marvelous financially quarterly result on Wednesday after the close of the stock market. Everything had not been so cheerful for ‘cloud’ stocks recently from a stock price perspective.  LinkedIn (NYSE: LNKD) and Tableau Software (NYSE: DATA) are too recent examples of financial investors punishing stocks for weak forward-looking guidance.

Salesforces’ outstanding Q4’16 results are evident in the numbers however, Marc Benioff, Salesforce CEO, disclosed an important reason why, in his opinion, that his Company is having success against competitive rival of Oracle (NYSE: ORCL) and SAP (NYSE: SAP).  This reason is the strategy of CEO engagement.  Below is a link to the full article:

Also, here is a quick summary of the financial results for your convenience:

  • Revenue: $1.81 billion vs. $1.79 billion expected (25% growth year over year)
  • Revenue guidance: $1.885 billion to $1.895 billion vs. $1.86 billion expected
  • Full year guidance, Salesforce had $6.67 billion in revenue, up 24% year-over-year
  • Also raised its full year revenue guidance to $8.12 billion
  • 2 deals of nine-figures (i.e $xxx,xxx,xxx)
  • 600 deals of seven-figures (i.e $x,xxx,xxx)
  • Brought in $459 million in operating cash flow in the fourth quarter, a 38% increase from last year
  • For the full year, it generated $1.61 billion in operating cash flow, bringing its total cash reserve to $2.73 billion
  • It also reported $4.29 billion in deferred revenue and $7.1 billion in unbilled deferred revenue, meaning more than $11.3 billion worth of sales have not been recorded yet

While these numbers are all great it’s still important to know that Salesforce still produces a net loss as summarized below:

  • In fourth quarter, it saw $25.5 million in net loss, down from last year’s $65.7 million net loss
  • For the full year, it decreased its net loss to $47 million from a loss of $263 million the previous year

However, this net loss is shrinking and the reason for net loss is that Salesforce is constantly doing major financial investment in growth via acquisitions, strategic investment or other sales/marketing resources for their Company.  As Mr. Benioff was once famously quoted:

This is the heyday of the Cloud. This is the Renaissance.

We are in the Great Time. ”

…and he continues…

 “So we’re still at the very, very beginning.

We are in the first innings of Cloud Computing.

This is still the Renaissance. ”

Salesforce Q2’14 Financial Results – No Respect

When a bold, trend-setting company such as Salesforce earns the respect of the Wall Street financial community then maybe we truly have reached the point that “The Cloud” is recognized as a legitimate business model and not just a ‘fad’.  Nowadays, Salesforce is treated just as another company when analyzing their quarterly financial results.


Salesforce is still not a profitable company; yet.  However, with consistently improving business, which is more sustainable than selling traditional on-premise software by-the-way, the future is bright.  They are focused on ‘growth’ versus ‘profit’ now.  If this trend continues from $-0.16 Earnings Per Share (EPS) last quarter to $-0.10 EPS this quarter it shouldn’t be too long before they are profitable.

At that inflection point it will be absolutely interesting to see how explosive the Company might grow considering the solid foundation they would have built and the unbelievable scalability of this type of Software-as-a-Service (SaaS) business model.

Below is a link to a Forbes article the summarizes Salesforce’s Q2’14 Finanical Results:

By almost every metric the company improved the flow of cash coming into the company by somewhere between 30% and 40%. Cash was up 34% to $246 million; deferred revenue up 31% to $2.35 billion. Unbilled and deferred revenue that the company has under contract but won’t appear on the books yet stands at $5 billion, up 32%, while Salesforce is now projecting full-year growth of between 31% and 32%, with its guidance inched up $30 million to $5.34 billion to $5.37 billion.

#CloudIsAFad and


Crossing the ECM/Capture Chasm – ‘This is the Renaissance’

Marc Benioff, CEO, has been famously quoted on his opinion of cloud computing in terms of saturation-point, as well as technology innovation, for a viable business model.

“This is the heyday of the Cloud. This is the Renaissance.

We are in the Great Time. ”

…and he continues…

 “So we’re still at the very, very beginning.

We are in the first innings of Cloud Computing.

This is still the Renaissance. ”

While this is just one man’s opinion I personally happen to think he is absolutely correct.  We truly are in the first innings and, in particularly, as it relates to Capture and ECM moving to the cloud.  Future innings have yet to be played.  In this baseball analogy the convergence of old-school “traditional – behind the firewall” technology and new “innovative – cloud collaboration/mobile” technology are on a crash course of epic proportions.

Then on 9/6/2012 as Jeff Bezos, CEO, was proudly introducing his companies’ new Kindle Fire tablet device he was quoted as saying the following:

“We want to make money when people use our devices, not when they buy our devices.” reinventing themselves

Let’s take a high-level look how’s business has changed over the years since the company started business in 1999.  They started with their (1) core Customer Relationship Management (CRM) service and then they (2) offered a development platform.  Next, they (3) built an ecosystem of development partners, and then they created sales and marketing programs to (4) resell third-party as well as additional branded-services.  All along, they have been strong in their advocacy of (5) using mobile devices so they have provided pre-built applications and also development tools for integrators to create mobile applications for reinventing themselves

Just like reinventing themselves; has also done a great job on continually enhancing their business and the formula to success, at a high-level, is amazingly similar.  First, had their (1) core business of electronic commerce selling books and music items.  Next, they (2) built a platform and exposed their product information via Web Services.  Once they offered these Web Services, third-party web sites could integrate and (3) sell products directly from the online catalog with Amazon Affiliates.  Amazon realized their Web Services were world-class and their data center infrastructure could be additional sources of revenue so they started offering Amazon Web Services (AWS) for software developers to (4) create new applications other than just e-commerce.  And, of course, with the recent aggressive announcements with Kindle Fire, Amazon has made a huge investment in the future of (5) delivering content, over the long-term, to mobile devices as a financial business model, not when customers purchase the hardware itself.


Cloud Capture Convergence

This is not to say that this convergence of Traditional technology and Cloud technology is necessarily a bad thing and, in fact, can be quite good.  For example, ECM systems (or Systems of Record2) have a long history of positive results if implemented and governed properly.  There really is no question about this, however the truth of the matter is that with this legacy comes baggage which slows down technology innovation.  Baggage just means that there is an existing customer base that you must support and there is a feature improvement list gathered from customer feedback that is probably quite extensive.  Also, from a software architecture standpoint, the software was not engineered with modern capabilities such as mulitenancy, web services connectivity or thin client design.

However, on the complete other end of the technology spectrum you have a whole host of cloud-based, Software as a Service (SaaS) applications (or Systems of Engagement) which are highly collaborative with these modern capabilities, yet most of them lack the most basic capability in terms of enterprise-type features that have proven ROI over the years.  One of the most basic productivity-enhancing and cost-reducing capabilities missing, of course, is automatic Data Capture.  The cost of your investment is really easy to calculate just with the number of labor hours that can be recouped simply by eliminating manual data entry.  I admire these companies of being so forward-thinking that they overlook the obvious.


The formula to success is rather obvious

So what’s the point of me pointing out these bold comments by these CEO’s from some of the more successful cloud companies?  The point is that both and have quite similar business models now, yet they were born very different companies as their core business.  These companies are quickly transforming into “services” companies.  Both of these companies have fully-embraced cloud as a business model, not just a casual interest, or a fad that will fade away.  Both companies have built amazing technology and integration platforms for developers to quickly and easily create powerful applications like never before.  Each company has created two of the most thriving and robust ecosystems in computing history with partners gladly and enthusiastically promoting solutions built on these respective platforms.  Then one of the newest similarities of these two successful cloud companies is their absolute focus on using mobile devices as a delivery method for their content and services.


The application of the future

So now for my own bold prediction.  As these cloud applications evolve they, too, will start to incorporate core functionality such as automatic Data Capture themselves directly into their applications or mash-up software applications will be created that deliver the realization of best-of-breed solutions.  Let’s use two famous companies and describe the future of a best-of-breed business productivity software application, with specific details.  First, in the “traditional/behind-the firewall” ECM business let’s take Microsoft SharePoint Server.  Unquestionably one of the most popular ECM systems in the industry and very ‘disruptive’ since Microsoft starting sincerely promoting SharePoint as more of a true ECM solution instead of just a collaboration tool.  Secondly, in the “cloud/collaboration-mobile” business let’s take a look at Box.  Box is also a leader in their respective market space of cloud storage with high-security and easily accessable content via mobile devices.  (Admittedly, Box is a much smaller, newer start-up company but a leader none-the-less.)  ‘Where am I going with this vision?’ you might be asking yourself since you might be aware of Box’s infamous bashing of SharePoint as seen below in this billboard advertisement.  Well since these early days the rhetoric has been tempered quite a lot, in my opinion, and might I even dare to say that using each products respective strengths can help achieve the ultimate in business efficiency?

From a pure data capture and ECM standpoint, SharePoint has features that Box simply does not offer.  This includes a robust metadata framework, this also includes enterprise search and managed metadata just to name a few features that inhibit Box from serious contention if an organization requires these traditional ECM capabilities.  However, SharePoint has its own deficiencies and right now one of these areas is poor support for mobile devices.  Box absolutely excels in the area of mobile application development because their service was built with a “mobile first” mentality.  So what if we could blend the positive qualities into one to provide users with the functionality they desire on mobile, yet still adhere to traditional ECM policy and governance with metadata support?

The answer is “you can”.  Through the beauty of modern integration techniques users can now view, manage and edit documents stored in Microsoft SharePoint through the Box user interface on mobile devices.  Just imagine the enhanced productivity that can be achieved through a highly usable experience for the users themselves but also the piece-of-mind that your organization is not sacrificing critical features necessary to run an effective business.

This is the vision of the application of the future.  Remember, “we are in the first innings – This is the Renaissance.  We are in the Great Time.”


More information:

1Geoffrey Moore:  “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers” ( paperback)

2John Mancini:  “A future history of content management” ( presentation)

“Business” cloud and “Consumer” cloud. LinkedIn reports great Q2 earnings and revenue growth

Reading the news of LinkedIn’s great Q2 earnings report ( got me thinking about how seriously segregated the “business” market is becoming from the “consumer” market in regards to to cloud computing.

It’s becoming clear that investors, in the stock market and venture capital industries are only going to put their money with companies that offer serious business value instead of just relying on advertising as a revenue business model.  Some example of winners and losers as of this blog post (8/24/12) are as follows:


  1. LinkedIn  (+41.75% stock price over 1 year period)
  2. Salesforce  (+27.59%)
  3. Amazon  (+26.85%)


  1. Facebook  (-49.23%)
  2. Groupon  (-83.00%)
  3. Zynga  (-65.58%)

While the current stock prices, or the funding these companies are receiving, will certainly not dictate future results, the fact of the matter is that these types of indicators typically can accurately predict possible outcomes.

It’s clear to me that a business model such as LinkedIn where a good portion of their revenue comes from valuable ‘business’ services, as opposed to just advertising, is a winning formula:  “LinkedIn gets more than two-thirds of its revenue from fees it charges companies, recruiting services and other people who want broader access to the profiles and other data on its site. The rest comes from advertising.”

Congratulations to the LinkedIn folks on creating a great cloud service that people seem to sincerely enjoy, myself included.  Below are cliff notes from LinkedIn’s Q2/2012 quarterly earnings report:

  • LinkedIn Q2 Adjusted Earnings: $18.1 million (Q2/2012) versus $10.8 million (Q2/2011)
  • Revenue increased 89 percent to $228 million, from $121 million
  • The company raised its forecast for the year

They did, however, invest a lot of money in the future:

  • “Marketing, development and other expenses increased 93 percent to $215 million, from $111 million.”
  • “LinkedIn expects revenue of $235 million to $240 million for the current quarter.”

Here are the one year stock charts for the companies mentioned above for your viewing pleasure:









Advice for the cloud vendors is to be a ‘business-class’ cloud services provider in order to grow a prosperous company.

#SalesforceIsAFad. Are you kidding me? Absolutely not!

A cliff notes version on some of the highlights:

– Quarterly Revenue of $732 Million, up 34% Year-Over-Year
– Quarterly Operating Cash Flow of $136 Million, up 64% Year-Over-Year
– Deferred Revenue of $1.34 Billion, up 43% Year-Over-Year
– Unbilled Deferred Revenue Increases to Approximately $2.8 Billion
– Raises FY13 Revenue Guidance to $3.025 – $3.035 Billion

  • “Our second quarter revenue growth was outstanding at 34% in dollars and 37% in constant currency,” said Marc Benioff, Chairman and CEO, “’s social enterprise strategy is enabling companies to connect with customers, partners, and employees in completely new ways – and it’s creating new opportunities for their growth and ours.”
  • Full Year FY13 Guidance: Revenue for the company’s full fiscal year 2013 is projected to be in the range of $3.025 billion to $3.035 billion, an increase of 33% to 34% year-over-year.

Web link to the full article is here:


This web site was founded on the premise that many folks dismissed the cloud as “a fad”, or not viable for “real” business.  This really irks me, seriously!

So, therefore, I created some materials and entitled the series of graphics “Crossing the Chasm — Reinventing your business in the clouds”.  I have been personally extremely impressed how Amazon and Salesforce have, and again are in the mist of reinventing their businesses.  Both AMZN and CRM are not leaving their leadership positions in their respective markets but they truly have a vision of continuing to grow their organizations and mobile, social, platform and especially, cloud, are all key components to this strategy.

To me breaking down the strategies shows that there are quite similar steps in innovation that enables these companies to address new markets.

What are your thoughts?  Is my head in the clouds or is this logical?  I value any and all feedback on this or any other topic.

Salesforce (report of $140 million from State Farm Insurance) and Concur $1.4 billion from GSA

As of my writing this blog, 8/13/2012, this news is only a rumor so I want to preface my post, but reported scored a $140 million dollar deal from State Farm Insurance:

What isn’t rumor is that Concur was awarded a $1.4 billion dollar contract from the General Service Administration (GSA) to provide online travel booking, authorization and voucher-processing services for the next 15 years.

The Fad of the Cloud is getting ever-so murky!  #CloudIsAFad

$4.3 billion for Ariba and reportedly $300 million for Vitrue (#CloudIsAFAD continues)

SAP Buys Ariba to Combat Oracle, Cloud Vendors

Oracle Answers SAP Cloud Acquisition With its Own Deal

Oracle Is Starting To Look A Lot Like