Reports Record Revenue

The company reports third-quarter revenues that are up 78 percent year-over-year, and has increased its customer base by 50 percent from the same quarter the previous year. reported record results Wednesday for its third quarter, 2005.

The company reported revenues that are up 78 percent year-over-year to $82.7 million, with paying subscribers up by 43,000—or 80 percent—to 351,000 subscribers.

At the same time, has increased its customer base by 50 percent from the same quarter last year.

The company has added 1,800 new customers in the third quarter, bringing the new amount to 18,700 companies using Salesforce.coms on demand CRM (customer relationship management) software.

"This has been a quarter of seismic shifts in our industry, and the strength of our numbers today clearly indicates that the market is moving toward," said Marc Benioff, Salesforce.coms chairman and CEO.

"During the quarter we announced a game-changing application sharing strategy built around our AppExchange platform, witnessed the capitulation of a longtime rival [Siebel Systems Inc.] and saw the dominant force in technology attempt to mimic our model in an effort to catch up."

Subscription and support revenues—Salesforce.coms equivalent to software revenues for a traditional software company—increased 79 percent on a year-over-year basis, to $74.4 million, and 13 percent from the previous quarter.

The company reported 1.9 billion transactions, up almost 50 percent from the amount of transactions within the system in the second quarter.

Steve Cakebread, Salesforce.coms CFO, attributed the excellent quarter to "good business across the board, with new customers signed at from the small and midsized sector as well as the enterprise sector."

Benioff, however, remains cautiously optimistic in the companys approach, realizing that big competition lurks around every corner.

"We have a rapidly changing competitive environment," said Benioff. "At the beginning of this quarter there was a very large independent CRM company out there, Siebel, thats suffered the same fate as PeopleSoft [which was acquired by Oracle earlier this year].

/zimages/5/28571.gifClick here to read more about Salesforce.coms efforts to branch out beyond CRM.

"We expect the same market dynamics to take hold [with Siebel]. Were optimistic about that form a competitive perspective. But were cautious and watching what everyones doing. Whats Microsoft doing? But were the only ones that have been able to deliver product and customer success….weve written the code."

/zimages/5/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis about customer relationship management solutions.