Salesforce.com, Inc.

Salesforce IPO

Salesforce, founded by former Oracle executive Marc Benioff, made its initial public offering in June 2004 on the New York Stock Exchange under the stock symbol CRM and raised US$110 million.

The company continued to grow rapidly, becoming the first cloud computing company to reach US$1 billion in annual revenue by fiscal year 2009.

In 2019, Salesforce joined the Dow Jones Industrial Average, replacing energy giant and Standard Oil-descendant ExxonMobil.

At its accession, Salesforce was the largest technology component of the index.

Salesforce IPO Prospectus

A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. You can find Salesforce’s Prospectus here.

Company Overview & History

Salesforce is a cloud-based customer relationship management (CRM) platform that provides companies with tools and services to manage their sales, marketing, and customer service activities.

The company was founded in 1999 by Marc Benioff, Parker Harris, Dave Moellenhoff, and Frank Dominguez, with a vision to revolutionize the way businesses interact with their customers.

Salesforce started as a software-as-a-service (SaaS) company, offering CRM solutions that were accessible through the internet.

Its flagship product, Salesforce CRM, quickly gained popularity due to its ease of use, scalability, and flexibility.

Over the years, Salesforce expanded its product portfolio to include a wide range of cloud-based applications and services, such as Salesforce Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, and more.

With a strong focus on innovation and customer success, Salesforce has grown into one of the leading companies in the CRM industry.

It has continually invested in research and development to enhance its products and introduce new features and capabilities.

Additionally, Salesforce has pursued strategic acquisitions to broaden its offerings and enter new market segments. Notable acquisitions include Tableau, MuleSoft, Demandware, and Slack.

Today, Salesforce serves organizations of all sizes and industries, ranging from small businesses to large enterprises.

Its CRM platform has become a critical tool for businesses to streamline their operations, improve customer relationships, and drive growth.

Salesforce has also established itself as a socially responsible company, promoting initiatives such as the 1-1-1 model, which pledges 1% of the company’s equity, product, and employee time for philanthropic purposes.

Financial Performance

Year	Revenue($B)	Net Income($B)	EBITDA($B)	Operational Cash Flow($B)
2022	21.25	0.47	3.13	5.45
2021	17.1	0.11	2.61	4.44
2020	13.28	0.13	2.04	3.45
2019	10.48	1.11	1.61	2.74
2018	8.39	0.13	1.35	2.24
2017	6.67	0.18	1.15	1.87
2016	5.37	0.13	0.95	1.51
2015	4.07	0.13	0.76	1.17
2014	3.05	0.01	0.57	0.87
2013	2.27	0.01	0.43	0.65

Business Model

Salesforce operates on a subscription-based business model, commonly known as Software-as-a-Service (SaaS). Customers pay a recurring fee to access and use Salesforce’s cloud-based CRM platform and its various applications and services.

This model allows businesses to leverage Salesforce’s technology infrastructure without the need for significant upfront investments in software licenses or hardware.

Salesforce offers different pricing plans tailored to the specific needs of various customer segments.

The pricing structure typically includes a per-user subscription fee, which provides access to the CRM platform and its functionalities.

The company also offers additional features, such as advanced analytics and integration capabilities, at higher pricing tiers.

In addition to its core CRM platform, Salesforce generates revenue through its ecosystem of third-party applications, add-ons, and integrations.

The company operates an app marketplace called AppExchange, where customers can discover and install pre-built applications that extend the functionality of the Salesforce platform.

Salesforce charges developers a fee for listing their apps on the marketplace and earns a share of the revenue generated by these apps.

Salesforce’s business model emphasizes customer success and long-term relationships.

The company invests in customer support, training, and consulting services to ensure that customers can effectively utilize its platform and achieve their desired outcomes.

This focus on customer satisfaction has contributed to Salesforce’s high customer retention rates and its reputation as a trusted CRM provider in the industry.

Market Cap Over the Years

Year	Market Cap($B)
2022	49.6
2021	55.3
2020	49.3
2019	29.9
2018	29.3
2017	25.6
2016	19.8
2015	16.1
2014	13.2
2013	8.9

Risk Factors

Salesforce, being a prominent player in the software industry, faces certain risk factors that may affect its operations and financial performance. Some of the key risk factors for Salesforce include:

Intense competition: The market for customer relationship management (CRM) software is highly competitive, with several established companies and new entrants vying for market share. Salesforce faces competition from companies offering similar CRM solutions, as well as larger technology firms diversifying into the CRM space.
Dependence on subscription-based revenue model: Salesforce primarily generates revenue through subscriptions to its cloud-based CRM software and related services. This reliance on subscription-based revenue can expose the company to risks such as customer churn, pricing pressure, and fluctuations in demand for its services.
Cybersecurity and data privacy: As a provider of cloud-based solutions, Salesforce must maintain robust cybersecurity measures to protect its customers’ data from unauthorized access, data breaches, and other security risks. Any security incident or data breach could damage the company’s reputation, result in legal liabilities, and lead to loss of customers.
Economic and market conditions: Salesforce’s financial performance is influenced by broader economic and market conditions. A slowdown in global economic growth, changes in customer spending patterns, or fluctuations in currency exchange rates can impact the demand for Salesforce’s products and services.
Integration and scalability challenges: Salesforce has expanded its product portfolio through acquisitions, which can present integration challenges and disrupt business operations. Additionally, scaling its infrastructure and maintaining service quality as the customer base grows can pose operational challenges for the company.

Market Opportunity

Salesforce operates in the CRM software market, which offers significant growth potential driven by the increasing need for businesses to effectively manage customer relationships and enhance customer experiences.

The market opportunity for Salesforce can be attributed to several factors:

Digital transformation: Organizations across industries are undergoing digital transformation to stay competitive and deliver personalized experiences to their customers. Salesforce’s CRM solutions enable businesses to streamline sales, marketing, and customer service processes, facilitating digital transformation initiatives.
Shift to cloud-based solutions: The adoption of cloud-based software solutions is on the rise as businesses seek flexibility, scalability, and cost-effectiveness. Salesforce is well-positioned in this market, providing cloud-based CRM software that can be accessed from anywhere, offering seamless collaboration and real-time data insights.
Expanding customer expectations: Customers today expect personalized and seamless interactions with businesses across multiple channels. Salesforce’s CRM software equips companies with tools to capture, analyze, and leverage customer data to deliver personalized experiences and build lasting relationships.
Emerging technologies: Advancements in technologies such as artificial intelligence (AI), machine learning (ML), and automation present new opportunities for Salesforce to enhance its CRM offerings. By incorporating these technologies into its products, Salesforce can help businesses derive valuable insights and automate various customer-centric processes.
Global market reach: Salesforce has a global presence and serves businesses of all sizes across industries. The company has the opportunity to tap into emerging markets and expand its customer base, especially in regions where CRM adoption is still in the early stages.

Competitors

Microsoft Dynamics 365
Oracle CRM
SAP CRM
Zoho CRM
HubSpot CRM
Adobe Experience Cloud
SugarCRM
Pipedrive

Key/Fun Company Facts

Salesforce was founded in 1999 by Marc Benioff and Parker Harris.
The company is headquartered in San Francisco, California.
Salesforce is a cloud-based customer relationship management (CRM) platform.
As of 2021, Salesforce has over 150,000 customers worldwide.
Salesforce offers a wide range of products and services, including Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, and more.
The company is known for its philanthropic efforts and has donated millions of dollars to various charitable causes through its Salesforce.org foundation.
Salesforce is consistently ranked among the top companies to work for, known for its inclusive and diverse work environment.
In 2020, Salesforce acquired Slack, a popular workplace communication platform, for $27.7 billion.
Salesforce has a strong focus on sustainability and has committed to achieving net-zero greenhouse gas emissions by 2050.
The company’s mascot is a cloud character named “Appy.”