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Salesforce.com Beats the Street, Takes Shots at Microsoft CRM

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Posted February 24, 2011 By Paul Shread     Feedback

Salesforce.com continues to grow at nearly a 30 percent rate, and CEO Marc Benioff says he isn't worried about Microsoft's Dynamics CRM 2011 release.

Salesforce.com (NYSE: CRM) posted better than expected quarterly results late today, sending the company's shares 8 percent higher in after-hours trading.

The online CRM leader reported 29 percent sales growth in its fiscal fourth quarter to $457 million and earnings of 31 cents a share, both comfortably ahead of analyst estimates.

Salesforce raised its current quarter and full-year sales guidance, but its earnings outlook was a little below expectations.

In a statement, CEO Marc Benioff said Salesforce is "on track to be the first enterprise cloud computing company to report more than $2 billion in revenue."

On the company's conference call, Benioff took shots at customer relationship management (CRM) rival Microsoft (NASDAQ: MSFT), which has been rolling out Microsoft Dynamics CRM 2011 in hopes of stealing market share from Salesforce and Oracle (NASDAQ: ORCL).

Microsoft, Benioff said, "just has not kept pace with the social, mobile and open technologies the rest of the world has embraced and offers customers no competitive advantage." He cited Abbott Labs and others as recent competitive wins against Microsoft.

Benioff said Salesforce Chatter continues to catch on with customers, with 80,000 of the company's 92,300 customers using the collaboration service and 10,000 using the free Chatter.com service launched a little more than three weeks ago.

Salesforce's platform business is also strong, thanks in part to the company's recent Heroku acquisition. Heroku will let Salesforce accelerate Chatter development, adding features such as screen sharing and messaging, Benioff said.

The company said that next week's Cloudforce 2011 event could also see some news announcements. Benioff noted that the event will follow Apple's (NASDAQ: AAPL) announcement of a new iPad, which he said has sparked "phenomenal" interest among CIOs.

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