Salesforce.com Files for $115 Million IPO
Salesforce.com, which survived the dot-com bust to achieve profitability, Thursday filed registration papers with the Securities and Exchange Commission for an initial public stock offering worth $115 million.
Salesforce.com, which provides access to customer relationship management (CRM) software over the Internet, set the stage for the IPO this fall when it disclosed that it had more 120,000 application users working at more than 8,000 customer sites.
The company also achieved profitability during the first nine months of this year when it reported a profit of about $4.6 million on revenue of $65.9 million, according to the SEC stock registration filing.
Founded by former Oracle executive Marc Benioff, Salesforce.com is one of the pioneers in the application service provider (ASP) market in which it sells on-demand access to enterprise software applications. While other ASPs provide online access to existing applications created by third-party software vendors, Salesforce.com offers CRM software that it developed in-house.
Salesforce claims that this approach allowed it to gradually grow since it was founded in 1999 even through the dot-com bust that forced hundreds of Internet ventures to close their doors. Salesforce claims to be adding as many as 300 new customers and 5,000 new subscribers per month.
Some of its more prominent customers are Advanced Micro Devices Inc., Amazon.com, Nokia Corp., American Online Inc. and Time Warner Cable Inc.
In the process, Salesforce has managed to present a significant competitive challenge to companies that are selling licensed CRM software packages. Siebel Systems Inc., for example, announced this fall that it was going to offer its own CRM online service called Siebel OnDemand.
It also paid $70 million to buy out Upshot Corp., another CRM ASP. Siebel plans to combine the Upshot online technology with is own CRM technology.
The IPO will be managed by Morgan Stanley & Co. and underwritten by Deutche Bank Securities Inc., UBS Securities LLC, Wachovia Capital Markets LLC and William Blair & Co.
The underwriters wont set an initial sale price until the SEC officially authorizes a release date for the IPO. With the IPO registration, Salesforce.com entered an SEC-mandated "quiet period." Company officials declined to provide further comment on their IPO filing.