Salesforce wins bet on the cloud, doubles down on social

February 25, 2011: 10:57 AM ET

Salesforce's Marc Benioff is turning to social products like Chatter to drive growth for tomorrow, even as enterprise adoption continues to bring in revenue today.

Salesforce CEO Benioff

Salesforce CEO Benioff

Salesforce.com CEO Marc Benioff is the kind of guy who could sell customer relationship management software to Eskimos. But can he convince IT departments to buy into Chatter, his company's enterprise collaboration tool?

Benioff certainly thinks so. According to Salesforce.com's (CRM) recently released quarterly earnings report, he's been investing heavily in both enhancing and promoting Chatter. In January, Salesforce.com paid $31 million for an online meeting service called DimDim (earlier this month it also acquired collaboration software startup Manymoon for an undisclosed amount). Both companies' products could be woven into Chatter. The goal, Benioff said during Salesforce.com's conference call with investors on Thursday, is to make Chatter a communication utility for clients.

Benioff calls Chatter his company's most successful product. But Salesforce.com's growth is mainly due to an overall uptake in cloud-based services in the enterprise. Despite a 46% drop in its fourth-quarter profit (mostly due to hiring costs and stock-based expenses), the company's revenue is growing strong and its stock is up about 93% over the past 12 months. More

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