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By Dennis Callaghan  |  Posted 2003-03-03 Print this article Print

: Keeps Its Eyes Up"> Last Friday, held its annual Freedom From Software celebration in New York. Benioff had extra reason to celebrate this year. He claims the privately held company is profitable. Benioff said had $52 million in revenues last year with an additional $42 million in deferred revenue based on contracts signed, revenue generated from 80,000 paying users. Revenues for this year are on pace to exceed $100 million, he said. The ASP(application service provider) business has long been derided for lack of a sustainable business model. But Benioff said has attained profitability just three years after its services first went live.
"People said wed never become cash-flow positive and we did. They said wed never become profitable and we are. Now I guess they say we wont be able to sustain high-enough margins," Benioff said. "We keep reporting only positive results. Were becoming a large-scale, enterprise supplier."
A presentation produced by the company compared it to its chief competitors in the hosted CRM services space: UpShot Corp., Salesnet Inc. and NetLedger Inc. The slide identified UpShot as having $22.8 million in annualized revenues from 18,000 users, Salesnet with $10.8 million in revenues from 9,000 users and NetLedger with $4.8 million in CRM (customer relationship management) revenues from 6,000 users. Of those, none were identified as profitable and only UpShot was identified as cash-flow positive. Benioff said determined those numbers from contacts it had with those companies, but executives at UpShot, Salesnet and NetLedger all threw cold water on his claims. Zach Nelson, president and COO of NetLedger in San Mateo, Calif., said the company is generating more than $1 million a month from its CRM services and expects to be cash-flow positive by the third quarter. Salesnet chairman and CEO Mike Doyle said the numbers reported on Salesnet were inaccurate, though he declined to reveal what the companys actual numbers were, saying the Boston-based company is privately held and does not publicly release financial information. He did day that hed like to see what privately-held Salesforce.coms actual balance sheet looked like though. "I would be interested in seeing how their marketing budget compares to R&D," Doyle said. "The ad and events agencies must be making big bucks off of Marcs glitz campaigns." UpShot CEO Keith Raffel likewise would not comment on what his companys actual revenues and customer totals were, since UpShot is also privately held. Though he questioned the accuracy of even Salesforce.coms own numbers. Honeywells Kocanda said he couldnt vouch for Salesforce.coms profitability claims. But he considers the company to be a stable technology provider from his dealings with them. "From the standpoint of having the support resources in place to support enterprise customers and getting solutions out to their customers, they seem pretty responsive," he said. Search for more stories by Dennis Callaghan.


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