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Introduction

Salesforce success at SaaS level is widely acknowledged and well documented. but this is less the case when it comes to its role as a PaaS provider.

Highlights

  • Despite growing competition, in the next five years Salesforce will still be one of the companies for organizations to shortlist when considering public PaaS cloud deployments, especially for those that use Salesforce’s SaaS services, but also those who don’t.
  • Revenue from ISVs selling Force.com-based applications on Salesforce’s AppExchange marketplace will keep on growing. Salesforce changes them either 15 percent or 25 percent of net revenue derived from their applications, depending on the way they choose to make them available. Quite a few of these ISV customers are rapidly growing start-ups. For example, SaaS ERP provider FinancialForce, a joint venture between Salesforce and Unit4, has reached a $50 million annual run

Features and Benefits

  • Understand PaaS in the context of Salesforce's continuing growth.
  • Understand the role of PaaS at all company levels from revenue to channel, including geographic as well as vertical market coverage.

Key questions answered

  • How much revenue does Salesforce generate from PaaS? How is this revenue calculated? How will it evolve? How much comes from Force.com as opposed to Heroku?
  • How much has PaaS contributed to Salesforce' success? What is the impact of PaaS on Salesforce as a company in terms of revenue, channel, country, and vertical market strategy?

Table of contents

Summary

  • Catalyst
  • Ovum view
  • Key messages

Recommendations

  • Recommendations for enterprises
  • Recommendations for vendors

Salesforce is a fast-growing but not very profitable SaaS and PaaS vendor

  • A fast-growing vendor prioritizing expansion over profitability
  • A large, diverse PaaS customer base developing a variety of applications

Despite PaaS generating only 16% of revenue, Salesforce is the second largest PaaS provider

  • PaaS generates 16% of total subscription revenue
  • Keep PaaS revenue calculations in perspective

PaaS helps Salesforce achieve more balanced growth

  • A more balanced service revenue mix
  • A more balanced channel mix
  • A more balanced geographic revenue mix
  • A more balanced vertical revenue mix

Appendix

  • Further reading
  • Author

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