As understandable as this may be, the company has to do much better in terms of profitability if it truly wants to keep the bears in hibernation. Regardless, the company seemed pleased with its performance and nothing was going to ruin a good growth party. CEO Marc Benioff offered the following:
"Salesforce.com.com is the first enterprise cloud computing company to exceed $3 billion annual revenue run rate, with outstanding third quarter revenue growth at 35% in dollars and 37% in constant currency. Given the strong customer response to our next generation social and mobile cloud technologies, I'm delighted to announce that we expect to surpass a $4 billion annual revenue run rate during our fiscal year 2014."
Surpassing $4 billion in revenue, up about a billion from fiscal year 2013, is certainly an aggressive goal and I get very uncomfortable whenever management think it's necessary to make such bold predictions. What it says is that "we have this thing figured out." But on the other hand, Salesforce.com has met its earnings targets time and time again. The question is, will the competition just roll over and surrender the market? Evidence suggests they won't.
Meanwhile, names such as IBM, F5 and Red Hat have been making significant investments in the popular SaaS (software as a service) market to position themselves for the opportunities that lie ahead. Although Salesforce.com enjoys a good chunk of the market today, it will eventually find that it has to spend more on sales and marketing, plus other acquisitions in order to preserve its current market share. Still, that does not speak to other investments that it might have to make once growth starts to slow.