Salesforce.com 2008 Annual Report Download - page 23

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Table of Contents
party developers to build applications that are complementary to our service. Without the development of these applications, both current and potential
customers may not find our service sufficiently attractive.
The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be harmed.
The market for CRM, enterprise business applications, and development platforms is highly competitive, rapidly evolving and fragmented, and subject
to changing technology, shifting customer needs and frequent introductions of new products and services. Many prospective customers have invested
substantial personnel and financial resources to implement and integrate traditional enterprise software into their businesses, and therefore may be reluctant or
unwilling to migrate to an enterprise cloud computing application service. Additionally, third party developers may be reluctant to build application services
on our platform since they have invested significantly in other competing technology products.
We compete primarily with vendors of packaged CRM software, whose software is installed by the customer directly, and companies offering on-
demand CRM applications. We also compete with internally developed applications and face, or expect to face, competition from enterprise software vendors
and online service providers who may develop toolsets and products that allow customers to build new applications that run on the customers' current
infrastructure or as hosted services. Our current principal competitors include:
• enterprise software application vendors including Microsoft Corporation, Oracle Corporation, and SAP AG;
• packaged CRM software vendors, some of which offer hosted services, such as CDC Software Corporation, a subsidiary of chinadotcom
corporation, Consona Corporation (formerly Made2Manage Systems Inc.), Pivotal Corporation, which is owned by Sage Group plc, and
SugarCRM;
• on-demand CRM application service providers such as Microsoft Corporation, NetSuite, Inc., Oracle Corporation, RightNow Technologies, Inc.,
and SAP AG;
• enterprise application service providers including IBM Corporation and Oracle Corporation;
• traditional platform and development environment companies, including established vendors, such as IBM Corporation, Microsoft Corporation,
and Oracle Corporation; and an array of emerging vendors that have gained traction with the press and analyst communities; and
• cloud computing development platform companies, including some with whom we are partners, others such as Microsoft Corporation, which has
initiated plans to enter this market, and a variety of smaller start up companies that have invested in cloud computing technology.
In addition, we face competition from businesses that develop their own CRM applications internally, as well as from enterprise software vendors and
online service providers who may develop and/or bundle CRM products with their products in the future. For small business customers, we also face
competition from companies whose offering is based on Microsoft Outlook and Excel for limited contact management functionality. We also face competition
from some of our larger and more established competitors who historically have been packaged CRM software vendors, but who also have directly
competitive on-demand CRM application services offerings.
Our professional services organization may compete with some systems integrators, including Accenture Ltd., Deloitte Consulting and IBM
Corporation; it may also compete with some ISV service providers that have service practices. We have close relationships with many of these consulting
companies and frequently work cooperatively on projects with them.
Many of our competitors and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating
histories and larger marketing budgets, as well as substantially greater
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