Ten Billion

Ten Billion

By Denis Pombriant • CRM BuyerECT News Network

Aug 29, 2017 2:46 PM PT

Salesforce announced the partial attainment of one of its long-range goals in its second-quarter earnings announcement last week: It eclipsed its goal of a US$10 billion run rate. This will be followed by similar announcements over the next year (first $10 billion year, etc.), and why not? The company should celebrate.

Second quarter revenue hit $2.56 billion, a 26 percent increase year over year. Despite all the fanfare, anyone watching the evolution of the company and the market should not be surprised. Take nothing away from the skillful engineering and deft management over a prolonged period, but this day should surprise no one in that it was inevitable that some company would reach this milestone.

It’s also not surprising that a long list of established software companies, such as Microsoft, Oracle, IBM or others, didn’t get there first. To understand the moment, we need to understand some of the economics behind it all.

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