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2015A N N U A L R E P O RT. ranks among the most importantenterprise applicationsannouncements of 2014.”— InformationWeek0100k200k300k400k500kThe Year ofANALYTICSI can tell you that every time I show“theproduct, people want it.”Alex DayonPresident, Products600k700k800k
FY15 HIGHLIGHTS“Salesforce’s Wave Analytics Cloud .#1WORLD’SCRMPLATFORM#1MOST INNOVATIVECOMPANY IN THEWORLD(Source: Forbes, 2011, 2012, 2014)(Source: Gartner, 2014)32% 5.4 BILLIONIN REVENUEREVENUE GROWTH2.3 BILLION2,700TRANSACTIONS AVERAGEDEVERY BUSINESS DAYAPPEXCHANGE APPSand nearly 3 million installsWORLDWIDECORPORATE HEADQUARTERSsalesforce.com inc.The Landmark @ One MarketSuite 300San Francisco, CA 94105USA 16,000EMPLOYEES840,000HOURS CONTRIBUTED TO THECOMMUNITY SINCE INCEPTION
. ranks among the most importantenterprise applicationsannouncements of 2014.”— InformationWeek0100k200k300k400k500kThe Year ofANALYTICSI can tell you that every time I show“theproduct, people want it.”Alex DayonPresident, Products600k700k800k900
Wave is built for a world in which peoplehave more interactions with datathrough mobile apps than they dothrough desktop browsers.d for enrawterforpprA majorsoftware.iseste0kPETER COFFEEVP for StrategicResearch atSalesforce— Ven t ure B e at“It doesn’t take a data science degree, it takes 5 buttons.”Anna RosenmanProduct Marketing Director
Dear stockholders,Fiscal 2015 was another phenomenal year of customer success andgrowth for Salesforce. We reached 5 billion in annual revenue fasterthan any other enterprise software company, and now it’s our goal to bethe fastest to reach 10 billion.Salesforce is now the sixth largest software company, and the largestenterprise cloud computing company in the world. We believe that wehave a tremendous market opportunity ahead, as CRM and analyticsbecome core to the success of every business.Salesforce has achieved a unique position in the industry. Our complete,trusted Customer Success Platform is built from the ground up for cloud,social, mobile, and data science technologies. And with six world-classclouds for sales, service, marketing, community, analytics, and appdevelopment, we have six engines for growth. In fact, four of our cloudservices, if ranked separately by revenue, would be among the top eightpure-play enterprise cloud companies today. Very few software companiesin history have successfully established leadership positions in more thanone category.Our more than 150,000 customers and more than 16,000 employeesaround the world are why we were ranked by Forbes as the world’s MostInnovative Company for the last four years, and recognized by FortuneMagazine as Most Admired Software Company and one of the top tenBest Companies to Work For in the past year.Of all of our results, I’m most proud of our Salesforce Foundation, aseparate 501(c)(3) organization. We now have more than 24,000 non-profitand higher education organizations using our software. The Foundationhas donated more than 80 million in grants and our employees havevolunteered more than 840,000 hours in the last 16 years. And this year,we are well on our way to celebrating one million total hours of volunteering!I would like to extend a sincere thank you to our customers and partnersfor their inspiration, to our employees for their focus on customer success,and to you, our stockholders, for your continued support.Aloha,
THANKY U
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One)È Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended January 31, 2015OR‘ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934Commission File Number: 001-32224salesforce.com, inc.(Exact name of registrant as specified in its charter)Delaware94-3320693(State or other jurisdiction ofincorporation or organization)(IRS EmployerIdentification No.)The Landmark @ One Market, Suite 300San Francisco, California 94105(Address of principal executive offices)Telephone Number (415) 901-7000(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredCommon Stock, par value 0.001 per shareNew York Stock Exchange, Inc.Securities registered pursuant to section 12(g) of the Act:Not applicableIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes ÈYes ‘Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of Act.No ‘No ÈIndicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Actof 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days: Yes È No ‘Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or forsuch shorter period that the Registrant was required to submit and post such files). Yes È No ‘Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not containedherein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K. ‘Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reportingcompany. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer ÈNon-accelerated filerAccelerated filer‘ (Do not check if a smaller reporting company)‘Smaller reporting company ‘Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ‘No ÈBased on the closing price of the Registrant’s Common Stock on the last business day of the Registrant’s most recently completed second fiscalquarter, which was July 31, 2014, the aggregate market value of its shares (based on a closing price of 54.25 per share) held by non-affiliates wasapproximately 24.4 billion. Shares of the Registrant’s Common Stock held by each executive officer and director and by each entity or person thatowned 5 percent or more of the Registrant’s outstanding Common Stock were excluded in that such persons may be deemed to be affiliates. Thisdetermination of affiliate status is not necessarily a conclusive determination for other purposes.As of January 31, 2015, there were approximately 650.6 million shares of the Registrant’s Common Stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s definitive proxy statement for its 2015 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within120 days of the Registrant’s fiscal year ended January 31, 2015, are incorporated by reference in Parts II and III of this Report on Form 10-K. Exceptwith respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of thisForm 10-K.
salesforce.com, inc.INDEXPage No.PART IBusiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3112727282829PART IIMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchasesof Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . .Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . .Item 8. Consolidated Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . .Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . .Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3133356668113113114Item 1.Item 1A.Item 1B.Item 2.Item 3.Item 4.Item 4A.Item 5.PART IIIItem 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Item 12. Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Item 13. Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . .Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .PART IVItem 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Index to Exhibits2115115115115115116118
FORWARD-LOOKING INFORMATIONThis Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” (“MD&A”) in Item 7, contains forward-looking statements withinthe meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements consist of, amongother things, trend analyses, statements regarding future events, future financial performance, our anticipatedgrowth, the effect of general economic and market conditions, the impact of foreign currency exchange rate andinterest rate fluctuations on our results, our business strategy and our plan to build our business, including ourstrategy to be the leading provider of enterprise cloud computing applications and platforms and to lead theindustry shift to the “customer company,” our service performance and security, the expenses associated with newdata centers, additional data center capacity, real estate and office facilities space, our operating results, newfeatures and services, our strategy of acquiring or making investments in complementary businesses, joint ventures,services and technologies, and intellectual property rights, our ability to successfully integrate acquired businessesand technologies, our ability to continue the growth and to maintain deferred revenue and unbilled deferredrevenue, our ability to protect our intellectual property rights, our ability to develop our brands, our ability torealize the benefits from strategic partnerships, the effect of evolving government regulations, the valuation ofdeferred tax assets, the potential availability of additional tax assets in the future and related matters, the impact ofexpensing stock options, the sufficiency of our capital resources, factors related to our outstanding convertiblenotes, revolving credit facility, compliance with our related debt covenants, and capital lease obligations, andcurrent and potential litigation involving us, all of which are based on current expectations, estimates, andforecasts, and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “aims,”“projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,”“foresees,” “forecasts,” variations of such words and similar expressions are also intended to identify suchforward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptionsthat are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed inany forward-looking statements. Readers are directed to risks and uncertainties identified below, under “RiskFactors” and elsewhere in this report, for factors that may cause actual results to be different than those expressedin these forward-looking statements. Except as required by law, we undertake no obligation to revise or updatepublicly any forward-looking statements for any reason.PART IITEM 1.BUSINESSOverviewSalesforce is a leading provider of enterprise cloud computing solutions, with a focus on customerrelationship management, or CRM. We introduced our first CRM solution in February 2000, and we have sinceexpanded that offering with new editions, solutions, enhanced features, platform capabilities and a new analyticssolution through internal development and acquisitions.Our mission is to help our customers transform themselves into “customer companies” by empowering themto connect with their customers in entirely new ways. With our six core cloud service offerings, including salesforce automation, customer service and support, marketing automation, community management, analytics and acloud platform for building custom applications, we provide a next generation customer success platform.Our service offerings are intuitive and easy-to-use, can be deployed rapidly, customized easily andintegrated with other platforms and enterprise applications, or apps. We deliver our solutions as a service via allthe major Internet browsers and on leading mobile devices.We sell to businesses of all sizes and in almost every industry worldwide on a subscription basis, primarilythrough our direct sales efforts and also indirectly through partners. Through our platform and other developertools, we also encourage third parties to develop additional functionality and new apps that run on our platform,which are sold separately from, or in conjunction with, our service.3
We were incorporated in Delaware in February 1999. Our principal executive offices are located inSan Francisco, California and our principal website address is www.salesforce.com. Our office address isThe Landmark @ One Market, Suite 300, San Francisco, California 94105.The Cloud, Social, Mobile and Data Science RevolutionsWe believe that the convergence of cloud, social, mobile and data science technologies is fundamentallytransforming how companies sell, service, market, engage and innovate.Cloud computing has changed the way enterprise business apps are developed and deployed. Organizationsno longer need to buy and maintain their own infrastructure of servers, storage and development tools in order tocreate and run business apps. Instead, companies can gain access to a variety of business apps via an Internetbrowser or mobile device on an as-needed basis, without the cost and complexity of managing the hardware orsoftware in-house.The broad shift to social networking has transformed the way people engage and collaborate and isaccelerating the adoption of technologies that connect people and products through “feeds” and notifications. Inaddition, the proliferation of mobile phones worldwide continues, and enterprise mobile apps are making itpossible for people to conduct business from their phones. As more people and devices become connected,companies are looking for new ways to harness the multitude of data from these connections for new insights todrive business success. Progress in data science and machine learning will move companies beyond justautomating business processes to more data-driven, predictive computing.We believe Salesforce is at the forefront of delivering more than a system of record and a system ofengagement, but also a system of intelligence for companies of every size and industry to connect with theircustomers in entirely new ways.Our Six Cloud Service OfferingsWe provide enterprise cloud computing solutions that include apps and platform services, as well asprofessional services to facilitate the adoption of our solutions. We offer six core service offerings, all integratedon a single platform, that empower companies to grow sales faster, deliver customer service on multiple devices,market through one-to-one customer journeys, build branded communities for customers, partners andemployees, deliver analytics for every business user and develop mobile apps quickly and easily.Our core service offerings are as follows:Sales Cloud. The Sales Cloud is a platform for sales force automation that enables companies to storedata, access accurate customer and prospect information, track leads and progress, forecast opportunitiesand collaborate around any sale on desktop and mobile devices. Our customers use the Sales Cloud togrow their sales pipelines, close more deals, improve sales productivity and gain valuable businessinsights. The Sales Cloud also offers solutions for partner relationship management (including channelmanagement and partner communities) and complete, accurate customer and contact information.Service Cloud. The Service Cloud is a platform for customer service, enabling companies to effectivelyaddress their customer service and support needs. Our customers use the Service Cloud to connect theircustomer service agents with customers on a multitude of devices and across multiple channels—phone,email, chat, self-service web portals, social networks, online communities and directly within their ownproducts and apps.Marketing Cloud. The Marketing Cloud is a platform for digital marketing that enables companies toplan, personalize and optimize one-to-one customer interactions. Our customers use the Marketing Cloudto map customer journeys to digital marketing interactions across email, mobile, social, web and4
connected products. With the Marketing Cloud, customer data can also be routed into the Sales Cloud andService Cloud in the form of leads, contacts and customer service cases to give companies a completeview of their customers.Community Cloud. The Community Cloud, which we announced as a core service offering in October2014, is a platform for creating trusted, branded destinations for customers, partners and employees tocollaborate. It enables companies to engage directly with a specific group of people by giving them accessto relevant information, apps and experts.Analytics Cloud. The Analytics Cloud, which we announced as a core service offering in October 2014,is an app and platform for business intelligence. It enables companies to quickly deploy sales, ser
clouds for sales, service, marketing, community, analytics, and app development, we have six engines for growth. In fact, four of our cloud services, if ranked separately by revenue, would be among the top eight pure-play enterprise
