Tens of thousands of Salesforce faithful partied in San Francisco this week serenaded by GreenDay and seduced by Sean Penn – but investors weren’t buying…
Since 2003 CRM software company Salesforce has gathered users and partners at its annual Dreamforce conference to educate, inform and entertain them at a lavish four-day event. Taking up four blocks of the central business district plus a further five city hotels, Dreamforce serves up an almost evangelical mix of company news, technology innovation and international celebrities sprinkled liberally with philanthropy. This year however investors weren’t drinking the kool-aid, sending the company share price down 3.4% immediately after the re-engineered software platform Salesforce1 was released, and a further 4.99% the day after CEO Marc Benioff released news of its first ever $US1 billion quarter.
The question for investors remains why a 14 year old company which makes $US1 billion a quarter largely from recurring revenues can’t make a profit?
Company executives justify the balance sheet by saying it’s important to invest heavily in marketing and R&D to keep customers who pay by the month happy – but this isn’t a start up company, it’s the world’s largest CRM maker.
It’s also a company that can command $US1 million in fees from large companies that want to hang a shingle in its Dreamforce exhibition space; afford to fly in 300 international media and analysts for the event; and attract 135,000 official registrations including 50 of its largest customers each bringing more than 50 employees to Dreamforce – and three companies that brought 100-plus employees to the event.
It must then be galling to Benioff – the chief ringmaster of the event – that the share market would give his personal wealth such a pounding this week.
It hasn’t been enough to dint his philanthropic fervour however with his eponymous children’s hospital scheduled to open in 2015 and the company’s continued generosity to thousands of not-for-profits and global relief efforts.
Salesforce pioneered the 1/1/1 approach to corporate philanthropy where a company provides charities with one percent of its profits, one percent of its equity on IPO, and one percent of employee time given over to volunteering. It’s an approach now adopted by many of the world’s emerging technology companies, including Australia’s Atlassian.
The Salesforce Foundation headed by Suzanne DiBlanca, operates in eight countries including Australia, which is one of Salesforce’s seven major global markets.
Salesforce’s international focus is presently on the Haitian relief programme and actor Sean Penn, founder and CEO of the Haitian Relief Organisation, and Haiti’s prime minister, Laurent Lamothe, were star turns during Benioff’s keynote address at Dreamforce this week.
The author attended Dreamforce as a guest of Salesforce
