The future’s so bright for some cloud computing vendors these days, they gotta wear shades. This month CIOZone produced a special report on cloud computing. In particular we focused on the software-as-a-service (SaaS) segment. The reason for zeroing in on this arena was pretty clear: while most technology companies have been ailing in step with the recession, SaaS vendors appeared to be feeling no pain.
The latest results from SaaS pioneer Salesforce.com appear to further support that insight.
Late last week San Francisco-based Salesforce reported that revenues in its first fiscal quarter were up 23% year-over-year, reaching $305 million. Furthermore, the company’s earnings per share were up 88% year-over-year.
“In a tough IT spending environment, we added a first quarter record 3,900 net new customers to bring our total to over 59,000,” chief executive Marc Benioff said in announcing the results. “And strong cost controls enabled us to raise our full year earnings guidance.”
Two things appear to be at work here. First, customers are increasingly being attracted to the cloud computing or software-as-a –service model. Secondly, in tough economic times, it can make more sense for companies to essentially rent applications and avoid maintaining and running those apps internally. In the long run they may opt to bring those applications in-house, however, if a provider like Salesforce can prove it can do the job as-good-as or better-than maintaining and operating the software internally, it may just keep those customers.
When Salesforce reported its fiscal 2009 results in February (its 2009 fiscal year ended on Jan. 31, 2009), it became the first company in the cloud computing space to achieve $1 billion in revenues. It finished the year with $1.077 billion in revenue – a 44% increase over the previous year.
Now, after having chalked up a $300 million first quarter, it appears to be on track to record at least $1.2 billion in revenue for fiscal 2010.
In a recent CIOZone Survey of the 50 Fastest Growing Software Companies, the top three ranking companies – Omniture, Concur Technologies, and Salesforce all delivered their software via the Web through a SaaS model.
Clearly, cloud computing has entered the big leagues.
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