SalesForce.com Tops Q3 Forecast, Keeps Outlook

Hats off to Benioff and company at SalesForce.com for beating the quarterly estimates and also for keeping guidance for the year. Analysts are grappling with whether the SaaS model is immune from slowing in a down economy and the simple answer is while SaaS has the potential to reduce costs for a company and increase productivity, the challenge for SalesForce.com and other vendors is to grow as unemployment rises rapidly.

I feel unemployment will hit at least 12% and in this environment, SalesForce will have to expand by talking share from other companies to keep growing. Perhaps this is why the company added 700 new employees in the first three quarters of this year and plans on continuing this hiring spree.

Benioff remains optimistic about selling to customers of all sizes and the optimism is in stark contrast to most every other company exec. So congrats to SalesForce.com and the team for bucking the trend and the takeaway here is that SaaS is really performing well in a very difficult economic environment.

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