What's your business model?


How does Salesforce make money?

Salesforce offers subcription services, including Sales Cloud, Service Cloud and Marketing Cloud

Innovation series by Steven Loeb
October 25, 2014
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Salesforce is a company whose name is bandied about a lot, but I wonder how many people outside of the business world have any idea what the company actually does. I'll admit that before I started writing about tech I had no idea myself!

So, in case you don't know, it's a customer relationship management (CRM) company, which means it sells products that allow businesses to manage relationships, as well the data and information associated with them. Though the company has started to develop products, including an enterprise social network called Chatter, CRM still remains its core business.

And it makes the vast majority of its money by selling subscriptions to those products and services.

In its most recent quarterly earnings report, Salesforce saw revenue of $1.32 billion. And, of that, more than $1.2 billion came from what it calls, "Subscription and support."

That breaks down to four main products:

  • Sales Cloud

Sales Cloud helps businesses manage their sales cycle by allowing them to capture leads, maintain their customers information, contact management, and to get a complete view of their customers, including activity history, key contacts, customer communications, and internal account discussions.

Sales Cloud starts at $25 per month per user, and includes basic sales and marketing for up to 5 users, and goes up to $250 per month per user with unlimited CRM power and support.

The company made $610.1 million from Sales Cloud in the most recent quarter.

  • Service Cloud 

Service Cloud is a social customer service application, a fully customizable help and support dsk. It includes features such as case management, auto-suggested solutions, e-mail integration, call scripting, online training,  data storage and multichannel support.

Service Cloud pricing starts at $30 per month per user for, and goes up to $260 per user per month, for unlimited customs app and customizations,  unlimited training and additional data storage.

Salesforce made $318.7 million from this product  last quarter.

  • Salesforce1 Platform

Salesforce1 is a cloud application development platform. Customers get access to Chatter, real-time APIs, Salesforce Identity, and point and click development.

Pricing  starts at $25 per user per month, which comes with access to 10 custom objects per user, and goes up to $150 per user per month, which comes with access to 2,000 custom objects per user.

Salesforces made $181.4 million from this product.

  • ExactTarget Marketing Cloud 

Salesforce bought cloud marketing platform ExactTarget in June of 2013. It offers e-mail marketing, social media marketing, Web personalization, predictive intelligence and a customer data platform.

ExactTarget brought in $122.4 million for Salesforce last quarter.

The other way that Salesforces brings in revenue is through "Professional services and other," which accounted for just $85.9 million.

Those services include consulting services, expert services and program architects. The company does not include any set pricing for these services.

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