Salesforce.com Profitability Sparks Renewed Debate About SaaS Sustainability
Despite the accelerating growth of Software-as-a-Service (SaaS) and growing interest in all things Cloud, skeptics are still seeing dark shadows which they think indicate fundamental flaws in the long-term prospects of on-demand services.
The most recent example was the controversy created by Salesforce.com’s most recent quarterly financial results. While the company’s revenues grew 34% and deferred revenues increased 43% on a year-over-year basis, the company still reported a second quarter (Q2) GAAP net loss per share of $0.07.
Although I tend to look at the world through ‘Cloud-colored’ glasses, I don’t think I’m being naive because I see these numbers as a outgrowth of a prudent strategic decision by Salesforce.com’s management to aggressively invest in winning a greater share of the high growth SaaS/Cloud market. In fact, Marc Benioff made the same point during a recent interview on Jim Cramer’s “Mad Money” show.
Like Benioff, SuccessFactors’ … Read More »