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Indy unit key part of multi-pronged Salesforce strategy

October 10, 2015

Salesforce.com is using its Indianapolis-based Salesforce Marketing Cloud division as the springboard for a nascent business line that company officials believe has the potential to grow rapidly for years to come.

Salesforce.com, founded in San Francisco in 1999, is best known for its customer relationship management software that salespeople use to organize customer data, manage interactions and more.

Salesforce later branched into CRM software for customer-service teams, and its $2.5 billion acquisition of Indianapolis-based ExactTarget in 2013 anchored its efforts to serve marketing teams. Salesforce Marketing Cloud sells a suite of tools aimed at digital marketers—who are increasingly focused on getting the right message to the right customer at the right time.

Salesforce Marketing Cloud has been growing at a rapid clip, with subscription revenue swelling to $158 million in the second quarter. That’s more than twice the $71 million ExactTarget generated in the first quarter of 2013, its last quarter as a public company.

Marketing Cloud revenue climbed 29 percent in both the first and second quarters of 2015, compared with the same periods a year earlier, company financial statements show.

“I think that’s just a good objective measure to say, ‘Look, it’s going really well,” said Scott McCorkle, CEO of the Salesforce Marketing Cloud division.

While those gains are impressive, the other Salesforce divisions are growing even faster, including the much larger customer-service unit, which in the latest quarter increased revenue 40 percent, to $445 million.

Marketing Cloud is the smallest revenue generator at the company, accounting for 11 percent of subscription income in the latest quarter.

Nevertheless, Salesforce executives appear happy with their ExactTarget purchase, and say they are bullish on its prospects.

“We have taken a long time to build our Marketing Cloud strategy—primarily through acquisition—and we have now had a couple of years to be able to operate it, and we couldn’t be more excited about the future,” Salesforce CEO Marc Benioff said in a first-quarter earnings call with analysts.

“Some of our largest transactions in the quarter were done with the Marketing Cloud, and I don’t know a customer who’s not looking at it. You know, it’s what you need to be able to connect with your customers on a day-by-day basis, and minute-by-minute basis.”•
 

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