Salesforce dubs SAP, Oracle "cloud deniers" as it closes stellar quarter

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Salesforce dubs SAP, Oracle "cloud deniers" as it closes stellar quarter
Marc Benioff, Salesforce have earnings again beat expectations, stacking up successful quarters and racing toward founder Marc Benioff's goal of US$10 billion in annual revenue.

The third-quarter financials exceeded Wall Street's projections by 2 cents a share – or US$10 million total – with 21 cents earnings per share on US$1.71 billion in revenue. 

The company is on pace to deliver US$6.6 billion in revenue for fiscal year 2016, Benioff said on the earnings call, making sure to point out that Salesforce is set to reach that mark "faster than any other enterprise software company in history".

Salesforce will next year become the fourth-largest software company in the world, according to Benioff – and Salesforce has already set its sights on leapfrogging SAP into third.

Benioff used the investor call to shar revealing insights into Salesforce's relationships with the hyper-scale cloud providers Amazon Web Services, Microsoft Azure and Google. The CRM leader uses all three to host cloud applications and platforms.

Salesforce is "a huge customer of Amazon Web Services", Benioff said, and vice versa. "We use AWS to build our product," he said, adding that Heroku, Salesforce's application development platform, is hosted on AWS.

Salesforce is also working to expand its use of Azure.

Benioff also told investors, "we use Google's platform very extensively at Salesforce as well".

"Those are our three core strategic partners in infrastructure-as-a-service."

Benioff said "that's the modern IT infrastructure" that delivers speed, a much lower total cost of ownership and rapid innovation.

Tipping point

"There's no doubt we are at a tipping point in cloud platforms," Benioff said. "And companies that have been cloud deniers like SAP and Oracle are paying a horrible price, in single-digit or negative growth, and companies are not buying their products because they're not modern."

Keith Block, the company's president, told investors he would characterise Q3 as "one of the most memorable and exciting quarters we've had here at Salesforce".

Salesforce's revenue grew by almost 24 percent year-onyear. It improved operating margins for the sixth straight quarter, said CFO Mark Hawkins.

Salesforce raised guidance for its full fiscal year 2016 revenue by US$25 million, to between US$6.64 billion and US$6.65 billion, Hawkins said.

The company expects to hit the US$8 billion mark in fiscal year 2017, Benioff said.

Benioff said those projections now put his company in sight of a goal he's been talking about for several years – a US$10 billion year.

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