Salesforce.com explains figures

The vendors has defended a slump in its share price, arguing it has been unable to reveal the full picture

Fresh from its flotation on the New York Stock Exchange, Salesforce.com is once again talking up its business model - and talking down rivals in CRM such as Oracle, SAP and Siebel.

The vendor that makes a speciality of focusing on a 'no software' approach to customer relationship management technology - meaning its customers buy a Web-based, pay-as-you-use service rather than software to install and maintain - also defended share price movements since its initial public offering and a trading update.

In the face of a 27 per cent fall on Wednesday to a level nearer its IPO price after new guidance was put out, Steve Garnett, Salesforce.com general manager for Europe, told silicon.com: "The truth is that we've not been allowed to put out any guidance since December. Some analysts assumed we'd ramp up over and above [already healthy] Q1 figures."

The company now cites 10,700 customers with 161,000 paying subscribers. Recent wins, away from Siebel, include accounts with Automatic Data Processing (ADP) and Cisco. Garnett said that for a company that didn't exist four years ago, to have that base and a market capitalisation of over $1bn (£0.55bn) is good going.

However, in the face of this growth, rivals have started hitting back. Siebel chose week to release research from analyst group Forrester that praises Siebel CRM OnDemand. Rather than saying, as some do, that this offering conflicts with the company's historic model of selling software packages, it says a "hybrid deployment model" is a strength.

Siebel today reported quarterly results showing sales down by 10 per cent year-on-year at $301.1m, as per a warning earlier this month. Licence revenues were the lowest they have been in several years.

"We're seeing a rebellion against buying software upfront all the time," added Garnett, who has worked for Siebel and Oracle in the past. "We don't see companies coming back to writing $10m upfront cheques to Siebel and Oracle."

Meanwhile, German software giant SAP also claims to be the leader in CRM these days, citing research from investment bank UBS, ahead of traditional leader Siebel. Garnett said such a proclamation depends on how the market is measured, fails to take into account active users, and puts too much attention on the high end. Salesforce.com, Microsoft and a few others typically do more business relatively with SMEs.

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