Software On-Demand and Salesforce.com

Maurizio Capobianco SE Manager Salesforce.com Italia

“Software as a Service: Now the Real Action Begins”, Gartner Inc., March 19-21, Gartner US Sourcing Summit.“Service Providers Must Prepare for the Software-as-a-Service Wave”, Gartner, Inc., Dataquest Insight: Dec. 13, 2006

Gartner Predicts:

The Total SaaS market generated more than $20 billion in 2005

Forecast to hit $55 billion in 2010

Total CAGR = 25%.

Segmentation of the SaaS Market by Revenue, 2005 and 2010

SaaS Market Growth 2005-2010 By Region

0

1

2

3

4

5

6

7

8

9

2005 2010

U.S.

Europe

ROW

$B

Total = $5B Total = $15.5B

CAGR 23%

CAGR 27%

CAGR 32%

Total CAGR = 25%

Source: Gartner, Inc., Dataquest Insight: Service Providers Must Prepare for the Software-as-a-Service Wave, Dec. 13, 2006

Gartner's end-user studies in Europe indicate that strong interest in CRM investments is likely in EMEA in 2008.

“”

- Gartner Inc., Oct. 2007

Source: Gartner Dataquest Insight: Market Dynamics and Expectationsfor the CRM Software Market, EMEA, 2007-2011, Oct. 12, 2007

The 2007 EMEA CRM Market is Approximately $2.5 Billion in Total Software Revenue (14% Growth compared with 2006).

� The market for software as a service (SaaS) CRM continues to have momentum.

� Western Europe will provide the bulk of revenue opportunity for technology and service providers.

� Growing interest for CRM in certain countries within Eastern Europe and the Middle East and Africa.

Source: Gartner Dataquest, Inc. Forecast: CRM Software, EMEA, 2006-2011, Update, 10.11.07)

Salesforce.com Owns 51 percent Market Share in the SaaS European CRM Market

51%45%43%34%29%18%Share of market

75.043.625.211.85.31.7Salesforce reported European revenue

148965934199SaaS

1,6241,5901,5421,4831,4971,508On premise (SW + maintenance)

1,7711,6861,6021,5171,5151,517

CRM market - total (SW, maintenance

and SaaS)

200620052004200320022001

European CRM market size, $m

Source: Ovum, April 2007

Source: Gartner Dataquest, Inc. Forecast: CRM Software, EMEA, 2006-2011, Update, 10.11.07)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2006 2007 2008 2009 2010 2011

0%

2%

4%

6%

8%

10%

12%

14%

16%

Revenue

Annual Growth

Millions of Dollars Grow th

Through 2011, the EMEA CRM Market will Grow to Approximately $3.8 Billion (CAGR 11.3%).

Influential Power in Customer Service Centers

� By 2013, at least 75% of customer service centers will use a form of SaaS (0.7 probability).

� By the second half of 2009, Microsoft and Salesforce.com will emerge as the most influential powers in the customer service application market (0.7 probability)

� Salesforce.com Service and Support Strengths: Excellent graphical user interface, simple design and intuitive navigation. Low upfront IT investment required, and SaaS delivery model.

Source: Gartner, Inc., Gartner Magic Quadrant for CRM Customer Service Contact Centers, 2007, March 6, 2007

By 2011, 25% of new business software will be delivered as SaaS (0.7 probability).

Source: Gartner Inc., SaaS Delivery Challenges On-Premise Software, Sept. 26, 2006

- Gartner Inc., 2006

“”

SaaS offers potentially better economies of scale. Gartner Dataquest is aware of situations in which providers that are delivering on the SaaS model today are achieving 11% to 30% reductions in software total cost of ownership (TCO) over five years.

-- Gartner Inc., Dataquest December 2006

Source: Gartner, Inc., Dataquest Insight: Service Providers Must Prepare for the Software-as-a-Service Wave, Dec. 13, 2006

“

”

� New software innovation will be fueled by SaaSduring the next four years.

� More than 50% of new software vendors will based on SaaS during the next three years.

� SaaS will become the predominant delivery model for some software categories during the next four years

Source: Gartner, Inc., Toolkit: Determine Which Software Categories Will Be Best Suited for SaaS, 3.27.07

All The New Innovation is Coming from SaaS

All Size Firms Adopting Software On-Demand:Nearly 79% of respondents have either purchased or are currentlyreviewing a Software On-Demand offering

Notes: n = 512. Data are weighted. Responses shown do not include "don’t know.“ Source: IDC Software as a Service Adoption Study, 2005

SaaS is beginning to penetrate and radiate within organizations, across all segments; on average Large Enterprises that have adopted SaaS now have 3.4 SaaS applications deployed, with one in seven having greater than 10 SaaS applications.

Source: Saugatuck Technology, SaaS Adoption: Skyrocketing on All Cylinders!, March 27, 2007

“

”-- Saugatuck Technology, March 2007

All Types of Software From Payroll to Product Life-Cycle Management ---Being Reviewed or Purchased via Software On-Demand

Notes: Unweighted n = 468. Data is weighted. Responses shown do not include "don’t know.“ Multiple responses were allowed. Source: IDC’s SaaS Adoption Survey, 2005

Have a CRM Question?mcapobianco@salesforce.com

Software On-Demand and Salesforce.com

Maurizio Capobianco SE Manager Salesforce.com Italia