Salesforce posted Q4 and full-year results that met analyst expectations while continuing the cloud vendor's torrid run of growth.
While still small revenue-wise compared to the likes of Oracle, SAP or Microsoft, Salesforce's status as a pure cloud software provider makes it a disproportionately important bellwether and indicator of enterprise customers' buying sentiments.
As far as the numbers go, Q4 revenue jumped 25 percent to $1.81 billion while full-year revenue was up 24 percent to $6.67 billion. Deferred revenue grew 29 percent to $4.29 billion while unbilled deferred revenue rose 25 percent to $7.1 billion. (All the rest of the financials can be found here, in Salesforce's press release.)
The raw numbers don't tell the entire story of where a company's business is headed, of course, so here are some of the key takeways from the earnings announcement and conference.
Big Deal Bonanza: "We hit an all-time high in large transactions in fiscal 2016 as more and more companies look to Salesforce as their trusted advisor," said Keith Block, vice chairman, president and COO, in a statement.
Salesforce signed a nine-figure deal, the largest renewal in its history and more than 600 seven-figure deals over the course of the year. This can be viewed in a number of ways.
Clearly, customers are happy with Salesforce and buying more from the company. But Salesforce's rapidly expanding product portfolio and subsequently larger sales organization makes putting together more big deals easier as a natural matter of course.
"We would never expect to see every product group and every geography to exceed our expectations, but that's what happened," said CEO Marc Benioff on the conference call.
He credited Block, who arrived at Salesforce several years ago after a long career at Oracle, for the company's performance. "It speaks to Keith and the processes he put in place."
Analytics Rising
Salesforce's Wave analytics platform is enjoying "terrific" growth, Benioff said on the call. As Constellation Research VP and principal analyst Doug Henschen noted in a recent post, Wave underwent a reboot of sorts last year after the initial version didn't quite catch on fire.
Wave will be a huge part of the sales organization's focus during the new fiscal year, Benioff said. Currently, there isn't a customer meeting or new sale that doesn't involve Wave in some way, he added.
In the Boardroom
While Salesforce is still dealing closely with CIOs, CEO-level discussions are becoming frequent, Block said. "We're in the boardroom and talking about transformation. CEOs are all about transformation. They are personally involved and engaged and they want to talk to us." In last three weeks Block has had more conversations than in the past 30 years of his career, he said.
Plenty of Room to Grow
While executives emphasized deal sizes and those transformational projects frequently on the call, Benioff also revealed the somewhat surprising fact that 72 percent of Salesforce customers still only use one of its clouds. "We do want to go wall-to-wall with these companies, we believe it's a huge opportunity," he said.
There's a good way to put Salesforce's growth in perspective, notes Constellation Research VP and principal analyst Holger Mueller.
"A little more than a decade ago Siebel Systems was the market leader for CRM systems with 40-plus percent market share, and less yearly revenue than what Salesforce does in a quarter," he said. "At the same time Salesforce is more than just a CRM vendor, with good PaaS offerings, a player in analytics with Wave and capabilities to connect a thriving IoT market to its CRM offerings."
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