Salesforce.com believes it will become the first software-as-a-service (SaaS) provider to earn more than a billion dollars of revenue in a single year in 2009. The company’s most recent financial report suggests it may well pull it off.

In the fourth quarter of fiscal 2008, the on-demand CRM provider generated revenues of US$217 million – a 50% jump since the same quarter in the previous year. The company added 2,900 paying subscribers during the quarter, bring the total number to 1.1 million.

Notably, the company has significantly grown the amount of revenue it derives from professional services. These services generated $20.4 million in 4Q08, up 68% from the year before.

"By any measure, the fourth quarter was amazing," said Salesforce.com CEO Marc Benioff. He predicted that if current performance continues, the company may exceed its $1 billion yearly goal by $30 million to $35 million.

Less clear, however, was how successful its platform and developer products such as the AppExchange and Force.com have been, as the revenue from these services are not broken down in the report.

There were rumours in February 2008 that Benioff is interested in selling Salesforce.com to his former employer and early investor Oracle, on whose database technology the company’s platform is built. According to report, Benioff has been selling 10,000 Salesforce.com shares (ticker symbol CRM) every day since 21 August 2007.

Further reading

On-demand economics Now the case for SaaS is proven, best practices are needed to ensure the potential becomes reality

The third way Combining on-demand software with on-premise code might prove to be the most powerful software paradigm yet. But the blend will not be without its difficulties

Cultivating CRM The customer relationship management market is the testbed for new application paradigms

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