1、2015ANNUAL REPORTNote on Forward-Looking StatementsThis annual report contains forward-looking statements within the meaning of the federal securities laws.Results could differ materially.Further information on factors that could affect results is included in the fiscal 2015 Form 10-K,included in th
2、is annual report.BOARD OF DIRECTORSMarc Benioff Chairman&Chief Executive OfficerKeith Block Vice Chairman&PresidentCraig Conway Former Chief Executive Officer,PeopleSoft Inc.Alan Hassenfeld Director,Hasbro Inc.Colin Powell General,Former U.S.Secretary of State,Former Chairman,Joint Chiefs of StaffSa
3、nford Robertson Principal,Francisco PartnersJohn V.Roos Former U.S.Ambassador to JapanLarry Tomlinson Former Senior Vice President&Treasurer,Hewlett-Packard Co.Robin Washington Executive Vice President and Chief Financial Officer,Gilead Sciences Inc.Maynard Webb Chairman,Yahoo Inc.Susan Wojcicki Chi
4、ef Executive Officer,YouTubeEXECUTIVE TEAMMarc Benioff Chairman&Chief Executive OfficerParker Harris Co-FounderKeith Block Vice Chairman&PresidentAlex Dayon President,ProductsMark Hawkins Chief Financial Officer&Executive Vice PresidentMaria Martinez President,Sales&Customer SuccessBurke Norton Chie
5、f Legal Officer&Executive Vice PresidentJoe Allanson Chief Accounting OfficerINVESTOR RELATIONS ,+1-415-536-6250STOCK LISTING S trades on the New York Stock Exchange under the ticker symbol“CRM.”0100k200k300k400k500k600k700k800k900kWave is built for a world in which people have more interactions wit
6、h datathrough mobile apps than they do through desktop browsers.PETER COFFEEVP for Strategic Research at Salesforce“It doesnt take a data science degree,it takes 5 buttons.”Alex DayonPresident,Products“I can tell you that every time I show the product,people want it.”announcements of 2014.”enterpris
7、e applications.ranks among the most important InformationWeekThe Year of ANALYTICSNote on Forward-Looking StatementsThis annual report contains forward-looking statements within the meaning of the federal securities laws.Results could differ materially.Further information on factors that could affec
8、t results is included in the fiscal 2015 Form 10-K,included in this annual report.BOARD OF DIRECTORSMarc Benioff Chairman&Chief Executive OfficerKeith Block Vice Chairman&PresidentCraig Conway Former Chief Executive Officer,PeopleSoft Inc.Alan Hassenfeld Director,Hasbro Inc.Colin Powell General,Form
9、er U.S.Secretary of State,Former Chairman,Joint Chiefs of StaffSanford Robertson Principal,Francisco PartnersJohn V.Roos Former U.S.Ambassador to JapanLarry Tomlinson Former Senior Vice President&Treasurer,Hewlett-Packard Co.Robin Washington Executive Vice President and Chief Financial Officer,Gilea
10、d Sciences Inc.Maynard Webb Chairman,Yahoo Inc.Susan Wojcicki Chief Executive Officer,YouTubeEXECUTIVE TEAMMarc Benioff Chairman&Chief Executive OfficerParker Harris Co-FounderKeith Block Vice Chairman&PresidentAlex Dayon President,ProductsMark Hawkins Chief Financial Officer&Executive Vice Presiden
11、tMaria Martinez President,Sales&Customer SuccessBurke Norton Chief Legal Officer&Executive Vice PresidentJoe Allanson Chief Accounting OfficerINVESTOR RELATIONS ,+1-415-536-6250STOCK LISTING S trades on the New York Stock Exchange under the ticker symbol“CRM.”0100k200k300k400k500k600k700k800k900kWav
12、e is built for a world in which people have more interactions with datathrough mobile apps than they do through desktop browsers.PETER COFFEEVP for Strategic Research at Salesforce“It doesnt take a data science degree,it takes 5 buttons.”Alex DayonPresident,Products“I can tell you that every time I
13、show the product,people want it.”announcements of 2014.”enterprise applications.ranks among the most important InformationWeekThe Year of ANALYTICS“Salesforces Wave Analytics Cloud.(Source:Forbes,2011,2012,2014)MOST INNOVATIVE COMPANY IN THE WORLD#1(Source:Gartner,2014)#1CRM PLATFORMWORLDS$5.4 BILLI
14、ON IN REVENUE32%REVENUE GROWTH2,700APPEXCHANGE APPS and nearly 3 million installs16,000EMPLOYEES2.3 BILLION TRANSACTIONS AVERAGED EVERY BUSINESS DAY840,000HOURS CONTRIBUTED TO THE COMMUNITY SINCE INCEPTIONFY15 HIGHLIGHTSNote on Forward-Looking StatementsThis annual report contains forward-looking st
15、atements within the meaning of the federal securities laws.Results could differ materially.Further information on factors that could affect results is included in the fiscal 2015 Form 10-K,included in this annual report.BOARD OF DIRECTORSMarc Benioff Chairman&Chief Executive OfficerKeith Block Vice
16、Chairman&PresidentCraig Conway Former Chief Executive Officer,PeopleSoft Inc.Alan Hassenfeld Director,Hasbro Inc.Colin Powell General,Former U.S.Secretary of State,Former Chairman,Joint Chiefs of StaffSanford Robertson Principal,Francisco PartnersJohn V.Roos Former U.S.Ambassador to JapanLarry Tomli
17、nson Former Senior Vice President&Treasurer,Hewlett-Packard Co.Robin Washington Executive Vice President and Chief Financial Officer,Gilead Sciences Inc.Maynard Webb Chairman,Yahoo Inc.Susan Wojcicki Chief Executive Officer,YouTubeEXECUTIVE TEAMMarc Benioff Chairman&Chief Executive OfficerParker Har
18、ris Co-FounderKeith Block Vice Chairman&PresidentAlex Dayon President,ProductsMark Hawkins Chief Financial Officer&Executive Vice PresidentMaria Martinez President,Sales&Customer SuccessBurke Norton Chief Legal Officer&Executive Vice PresidentJoe Allanson Chief Accounting OfficerINVESTOR RELATIONS ,
19、+1-415-536-6250STOCK LISTING S trades on the New York Stock Exchange under the ticker symbol“CRM.”0100k200k300k400k500k600k700k800k900kWave is built for a world in which people have more interactions with datathrough mobile apps than they do through desktop browsers.PETER COFFEEVP for Strategic Rese
20、arch at Salesforce“It doesnt take a data science degree,it takes 5 buttons.”Anna RosenmanProduct Marketing DirectorAlex DayonPresident,Products“I can tell you that every time I show the product,people want it.”announcements of 2014.”enterprise applications.ranks among the most important InformationW
21、eekThe Year of ANALYTICSNote on Forward-Looking StatementsThis annual report contains forward-looking statements within the meaning of the federal securities laws.Results could differ materially.Further information on factors that could affect results is included in the fiscal 2015 Form 10-K,include
22、d in this annual report.BOARD OF DIRECTORSMarc Benioff Chairman&Chief Executive OfficerKeith Block Vice Chairman&PresidentCraig Conway Former Chief Executive Officer,PeopleSoft Inc.Alan Hassenfeld Director,Hasbro Inc.Colin Powell General,Former U.S.Secretary of State,Former Chairman,Joint Chiefs of
23、StaffSanford Robertson Principal,Francisco PartnersJohn V.Roos Former U.S.Ambassador to JapanLarry Tomlinson Former Senior Vice President&Treasurer,Hewlett-Packard Co.Robin Washington Executive Vice President and Chief Financial Officer,Gilead Sciences Inc.Maynard Webb Chairman,Yahoo Inc.Susan Wojci
24、cki Chief Executive Officer,YouTubeEXECUTIVE TEAMMarc Benioff Chairman&Chief Executive OfficerParker Harris Co-FounderKeith Block Vice Chairman&PresidentAlex Dayon President,ProductsMark Hawkins Chief Financial Officer&Executive Vice PresidentMaria Martinez President,Sales&Customer SuccessBurke Nort
25、on Chief Legal Officer&Executive Vice PresidentJoe Allanson Chief Accounting OfficerINVESTOR RELATIONS ,+1-415-536-6250STOCK LISTING S trades on the New York Stock Exchange under the ticker symbol“CRM.”0100k200k300k400k500k600k700k800k900kWave is built for a world in which people have more interacti
26、ons with datathrough mobile apps than they do through desktop browsers.PETER COFFEEVP for Strategic Research at Salesforce“It doesnt take a data science degree,it takes 5 buttons.”Anna RosenmanProduct Marketing DirectorThe Year of ANALYTICSA major step forward for enterprise software.VentureBeatDear
27、 stockholders,Fiscal 2015 was another phenomenal year of customer success and growth for Salesforce.We reached$5 billion in annual revenue faster than any other enterprise software company,and now its our goal to be the fastest to reach$10 billion.Salesforce is now the sixth largest software company
28、,and the largest enterprise cloud computing company in the world.We believe that we have a tremendous market opportunity ahead,as CRM and analytics become core to the success of every business.Salesforce has achieved a unique position in the industry.Our complete,trusted Customer Success Platform is
29、 built from the ground up for cloud,social,mobile,and data science technologies.And with six world-class clouds for sales,service,marketing,community,analytics,and app development,we have six engines for growth.In fact,four of our cloud services,if ranked separately by revenue,would be among the top
30、 eight pure-play enterprise cloud companies today.Very few software companies in history have successfully established leadership positions in more than one category.Our more than 150,000 customers and more than 16,000 employees around the world are why we were ranked by Forbes as the worlds Most In
31、novative Company for the last four years,and recognized by Fortune Magazine as Most Admired Software Company and one of the top ten Best Companies to Work For in the past year.Of all of our results,Im most proud of our Salesforce Foundation,a separate 501(c)(3)organization.We now have more than 24,0
32、00 non-profit and higher education organizations using our software.The Foundation has donated more than$80 million in grants and our employees have volunteered more than 840,000 hours in the last 16 years.And this year,we are well on our way to celebrating one million total hours of volunteering!I
33、would like to extend a sincere thank you to our customers and partners for their inspiration,to our employees for their focus on customer success,and to you,our stockholders,for your continued support.Aloha,THANK Y UUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark On
34、e)Annual Report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934For the fiscal year ended January 31,2015OR Transition report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934Commission File Number:001-,inc.(Exact name of registrant as specified in its charte
35、r)Delaware94-3320693(State or other jurisdiction ofincorporation or organization)(IRS EmployerIdentification No.)The Landmark One Market,Suite 300San Francisco,California 94105(Address of principal executive offices)Telephone Number(415)901-7000(Registrants telephone number,including area code)Secur
36、ities registered pursuant to Section 12(b)of the Act:Title of each className of each exchange on which registeredCommon Stock,par value$0.001 per shareNew York Stock Exchange,Inc.Securities registered pursuant to section 12(g)of the Act:Not applicableIndicate by check mark if the Registrant is a wel
37、l-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d)of Act.Yes No Indicate by check mark whether the Registrant(1)has filed all reports required to be filed by Sect
38、ion 13 or 15(d)of the Securities Exchange Actof 1934 during the preceding 12 months(or for such shorter period that the Registrant was required to file such reports),and(2)has been subject tosuch filing requirements for the past 90 days:Yes No Indicate by check mark whether the Registrant has submit
39、ted electronically and posted on its corporate Web site,if any,every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or forsuch shorter period that the Registrant was required to submit and post su
40、ch files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not containedherein,and will not be contained,to the best of Registrants knowledge,in definitive proxy or information statements incorporated by reference inPa
41、rt III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer or a smaller reportingcompany.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting c
42、ompany”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer Accelerated filerNon-accelerated filer(Do not check if a smaller reporting company)Smaller reporting company Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes
43、 No Based on the closing price of the Registrants Common Stock on the last business day of the Registrants most recently completed second fiscalquarter,which was July 31,2014,the aggregate market value of its shares(based on a closing price of$54.25 per share)held by non-affiliates wasapproximately$
44、24.4 billion.Shares of the Registrants Common Stock held by each executive officer and director and by each entity or person thatowned 5 percent or more of the Registrants outstanding Common Stock were excluded in that such persons may be deemed to be affiliates.Thisdetermination of affiliate status
45、 is not necessarily a conclusive determination for other purposes.As of January 31,2015,there were approximately 650.6 million shares of the Registrants Common Stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrants definitive proxy statement for its 2015 Annual Meeting of S
46、tockholders(the“Proxy Statement”),to be filed within120 days of the Registrants fiscal year ended January 31,2015,are incorporated by reference in Parts II and III of this Report on Form 10-K.Exceptwith respect to information specifically incorporated by reference in this Form 10-K,the Proxy Stateme
47、nt is not deemed to be filed as part of thisForm 10-K,inc.INDEXPage No.PART IItem 1.Business.3Item 1A.Risk Factors.11Item 1B.Unresolved Staff Comments.27Item 2.Properties.27Item 3.Legal Proceedings.28Item 4.Mine Safety Disclosures.28Item 4A.Executive Officers of the Registrant.29PART IIItem 5.Market
48、 for Registrants Common Equity,Related Stockholder Matters and Issuer Purchasesof Equity Securities.31Item 6.Selected Financial Data.33Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.35Item 7A.Quantitative and Qualitative Disclosures About Market Risk.66It
49、em 8.Consolidated Financial Statements and Supplementary Data.68Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.113Item 9A.Controls and Procedures.113Item 9B.Other Information.114PART IIIItem 10.Directors,Executive Officers and Corporate Governance.115Item
50、 11.Executive Compensation.115Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters.115Item 13.Certain Relationships and Related Transactions and Director Independence.115Item 14.Principal Accountant Fees and Services.115PART IVItem 15.Exhibits and Fin
51、ancial Statement Schedules.116Signatures.118Index to Exhibits2FORWARD-LOOKING INFORMATIONThis Annual Report on Form 10-K,including the section titled“Managements Discussion and Analysis ofFinancial Condition and Results of Operations”(“MD&A”)in Item 7,contains forward-looking statements withinthe me
52、aning of Section 27A of the Securities Act of 1933,as amended(the“Securities Act”),and Section 21E of theSecurities Exchange Act of 1934,as amended(the“Exchange Act”).Forward-looking statements consist of,amongother things,trend analyses,statements regarding future events,future financial performanc
53、e,our anticipatedgrowth,the effect of general economic and market conditions,the impact of foreign currency exchange rate andinterest rate fluctuations on our results,our business strategy and our plan to build our business,including ourstrategy to be the leading provider of enterprise cloud computi
54、ng applications and platforms and to lead theindustry shift to the“customer company,”our service performance and security,the expenses associated with newdata centers,additional data center capacity,real estate and office facilities space,our operating results,newfeatures and services,our strategy o
55、f acquiring or making investments in complementary businesses,joint ventures,services and technologies,and intellectual property rights,our ability to successfully integrate acquired businessesand technologies,our ability to continue the growth and to maintain deferred revenue and unbilled deferredr
56、evenue,our ability to protect our intellectual property rights,our ability to develop our brands,our ability torealize the benefits from strategic partnerships,the effect of evolving government regulations,the valuation ofdeferred tax assets,the potential availability of additional tax assets in the
57、 future and related matters,the impact ofexpensing stock options,the sufficiency of our capital resources,factors related to our outstanding convertiblenotes,revolving credit facility,compliance with our related debt covenants,and capital lease obligations,andcurrent and potential litigation involvi
58、ng us,all of which are based on current expectations,estimates,andforecasts,and the beliefs and assumptions of our management.Words such as“expects,”“anticipates,”“aims,”“projects,”“intends,”“plans,”“believes,”“estimates,”“seeks,”“assumes,”“may,”“should,”“could,”“foresees,”“forecasts,”variations of
59、such words and similar expressions are also intended to identify suchforward-looking statements.These forward-looking statements are subject to risks,uncertainties and assumptionsthat are difficult to predict.Therefore,actual results may differ materially and adversely from those expressed inany for
60、ward-looking statements.Readers are directed to risks and uncertainties identified below,under“RiskFactors”and elsewhere in this report,for factors that may cause actual results to be different than those expressedin these forward-looking statements.Except as required by law,we undertake no obligati
61、on to revise or updatepublicly any forward-looking statements for any reason.PART IITEM 1.BUSINESSOverviewSalesforce is a leading provider of enterprise cloud computing solutions,with a focus on customerrelationship management,or CRM.We introduced our first CRM solution in February 2000,and we have
62、sinceexpanded that offering with new editions,solutions,enhanced features,platform capabilities and a new analyticssolution through internal development and acquisitions.Our mission is to help our customers transform themselves into“customer companies”by empowering themto connect with their customer
63、s in entirely new ways.With our six core cloud service offerings,including salesforce automation,customer service and support,marketing automation,community management,analytics and acloud platform for building custom applications,we provide a next generation customer success platform.Our service of
64、ferings are intuitive and easy-to-use,can be deployed rapidly,customized easily andintegrated with other platforms and enterprise applications,or apps.We deliver our solutions as a service via allthe major Internet browsers and on leading mobile devices.We sell to businesses of all sizes and in almo
65、st every industry worldwide on a subscription basis,primarilythrough our direct sales efforts and also indirectly through partners.Through our platform and other developertools,we also encourage third parties to develop additional functionality and new apps that run on our platform,which are sold se
66、parately from,or in conjunction with,our service.3We were incorporated in Delaware in February 1999.Our principal executive offices are located inSan Francisco,California and our principal website address is .Our office address isThe Landmark One Market,Suite 300,San Francisco,California 94105.The C
67、loud,Social,Mobile and Data Science RevolutionsWe believe that the convergence of cloud,social,mobile and data science technologies is fundamentallytransforming how companies sell,service,market,engage and innovate.Cloud computing has changed the way enterprise business apps are developed and deploy
68、ed.Organizationsno longer need to buy and maintain their own infrastructure of servers,storage and development tools in order tocreate and run business apps.Instead,companies can gain access to a variety of business apps via an Internetbrowser or mobile device on an as-needed basis,without the cost
69、and complexity of managing the hardware orsoftware in-house.The broad shift to social networking has transformed the way people engage and collaborate and isaccelerating the adoption of technologies that connect people and products through“feeds”and notifications.Inaddition,the proliferation of mobi
70、le phones worldwide continues,and enterprise mobile apps are making itpossible for people to conduct business from their phones.As more people and devices become connected,companies are looking for new ways to harness the multitude of data from these connections for new insights todrive business suc
71、cess.Progress in data science and machine learning will move companies beyond justautomating business processes to more data-driven,predictive computing.We believe Salesforce is at the forefront of delivering more than a system of record and a system ofengagement,but also a system of intelligence fo
72、r companies of every size and industry to connect with theircustomers in entirely new ways.Our Six Cloud Service OfferingsWe provide enterprise cloud computing solutions that include apps and platform services,as well asprofessional services to facilitate the adoption of our solutions.We offer six c
73、ore service offerings,all integratedon a single platform,that empower companies to grow sales faster,deliver customer service on multiple devices,market through one-to-one customer journeys,build branded communities for customers,partners andemployees,deliver analytics for every business user and de
74、velop mobile apps quickly and easily.Our core service offerings are as follows:Sales Cloud.The Sales Cloud is a platform for sales force automation that enables companies to storedata,access accurate customer and prospect information,track leads and progress,forecast opportunitiesand collaborate aro
75、und any sale on desktop and mobile devices.Our customers use the Sales Cloud togrow their sales pipelines,close more deals,improve sales productivity and gain valuable businessinsights.The Sales Cloud also offers solutions for partner relationship management(including channelmanagement and partner c
76、ommunities)and complete,accurate customer and contact information.Service Cloud.The Service Cloud is a platform for customer service,enabling companies to effectivelyaddress their customer service and support needs.Our customers use the Service Cloud to connect theircustomer service agents with cust
77、omers on a multitude of devices and across multiple channelsphone,email,chat,self-service web portals,social networks,online communities and directly within their ownproducts and apps.Marketing Cloud.The Marketing Cloud is a platform for digital marketing that enables companies toplan,personalize an
78、d optimize one-to-one customer interactions.Our customers use the Marketing Cloudto map customer journeys to digital marketing interactions across email,mobile,social,web and4connected products.With the Marketing Cloud,customer data can also be routed into the Sales Cloud andService Cloud in the for
79、m of leads,contacts and customer service cases to give companies a completeview of their customers.Community Cloud.The Community Cloud,which we announced as a core service offering in October2014,is a platform for creating trusted,branded destinations for customers,partners and employees tocollabora
80、te.It enables companies to engage directly with a specific group of people by giving them accessto relevant information,apps and experts.Analytics Cloud.The Analytics Cloud,which we announced as a core service offering in October 2014,is an app and platform for business intelligence.It enables compa
81、nies to quickly deploy sales,service,marketing and custom analytics apps using any data source.Our customers use the Analytics Cloud toenable any employee to quickly and easily explore business data,uncover new insights,make smarterdecisions and take action from anywhere on their mobile device.Sales
82、force1 Platform.The Salesforce1 Platform is a cloud platform for developing apps.TheSalesforce1 Platform is delivered as a service,enabling anyone to build business apps without the burdenof managing hardware and software.Our customers,developers and independent software vendors(“ISVs”)use the Sales
83、force1 Platform to build apps that manage a variety of business processes and canbe accessed anytime and on any mobile device.In addition,the Salesforce1 Platform gives customers theability to create multiple copies of their companys Salesforce instance in separate environments for avariety of purpo
84、ses,such as testing and training.Professional ServicesWe offer consulting,deployment,training,implementation and integration services to our customers tofacilitate the adoption of our cloud solutions.Our professional service engagements can be billed on a time andmaterials basis,for a fixed fee or t
85、hrough annual contracts.We offer a number of traditional classroom and online educational classes that address topics such asdeploying,using,administering and developing on our service.We offer classes for our partners who deploy ourservice on behalf of our customers.We bill the traditional classroo
86、m and some of the online educational classeson a per person,per class basis.In addition,there is a selection of online educational classes available at nocharge to customers that subscribe to our customer service plans.Business Benefits of Using Our SolutionThe key advantages of our solution include
87、:Secure,private,scalable and reliable.Our service has been designed to provide our customers withprivacy and high levels of performance,reliability and security.We have built,and continue to invest in,a comprehensive security infrastructure,including firewalls,intrusion detection systems,and encrypt
88、ionfor transmissions over the Internet,which we monitor and test on a regular basis.We built and maintain amulti-tenant application architecture that has been designed to enable our service to scale securely,reliably and cost effectively.Our multi-tenant application architecture maintains the integr
89、ity andseparation of customer data while still permitting all customers to use the same application functionalitysimultaneously.Rapid deployment.Our service can be deployed rapidly since our customers do not have to spend timeprocuring,installing or maintaining the servers,storage,networking equipme
90、nt,security products or otherhardware and software.Ease of integration and configuration.IT professionals are able to integrate and configure our solutionswith existing applications quickly and seamlessly.We provide a set of application programminginterfaces(“APIs”)that enable customers and independ
91、ent software developers to both integrate our5solution with existing third-party,custom and legacy apps and write their own application services thatintegrate with our solutions.For example,many of our customers use our Salesforce1 Platform API tomove customer-related data from custom-developed and
92、packaged applications into our service on aperiodic basis to provide greater visibility into their activities.High levels of user adoption.We have designed our solutions to be intuitive and easy to use.Oursolutions contain many tools and features recognizable to users of popular consumer web service
93、s,sousers are more familiar with our user interface than typical enterprise applications.As a result,our userscan often use and gain benefit from our solutions with minimal training.We have also designed oursolutions to be used on mobile devices,making it possible for people to conduct business from
94、 theirphones.Rapid development of apps using the Salesforce1 Platform.Our customers and third-party developerscan create apps rapidly because of the ease of use and the benefits of a multi-tenant platform.We providethe capability for business users to easily customize our applications to suit their
95、specific needs,and alsosupport a variety of programming language support so developers can code complex apps spanningmultiple business processes and deliver them via multiple mobile devices.Increased innovation.By providing infrastructure and development environments on demand,weprovide developers t
96、he opportunity to create new and innovative apps without having to invest inhardware and distribution.Developers with ideas for a new app can create,test and support their solutionson the Salesforce1 Platform and make the app accessible for a subscription fee to customers.Lower total cost of ownersh
97、ip.We enable customers to achieve significant up-front savings relative tothe traditional enterprise software model.Customers benefit from the predictability of their future costssince they generally pay for the service on a per subscriber basis for the term of the subscription contract.Because we d
98、eploy all upgrades on our servers,new features and functionality automatically become partof our service on the upgrade release date and therefore benefit all of our customers immediately.Our StrategyOur objective is to deliver solutions that help companies transform the way they sell,service,market
99、,engage and innovate.Not only do we provide enterprise cloud apps,we also provide an enterprise cloudcomputing platform upon which our customers and partners can build and customize apps.Key elements of our strategy include:Strengthening our solutions.We offer multiple editions of our solutions at d
100、ifferent price points to meetthe needs of customers of different sizes and we have designed our solutions to easily accommodate newfeatures and functionality.We intend to continue to extend all editions of our core solutions with newfeatures and functions and increased security through our own devel
101、opment,acquisitions andpartnerships.Expanding into new and high-growth categories.As part of our growth strategy,we are deliveringinnovative solutions in new and high-growth categories,including marketing,communities,businessintelligence and cloud platforms.Extending strategic relationships with exi
102、sting customers.We see a significant opportunity to deepenour relationships with our existing customers.As our customers realize the benefits of our service,we aimto upgrade the customer to premium editions,extend the duration of the customerscontracts and sellmore subscriptions by targeting additio
103、nal functional areas and business units within the customerorganization,and ultimately pursue enterprise-wide deployments.Pursuing new customers.We believe that our offerings provide significant value for businesses of anysize.As a result,we will continue to aggressively target businesses of all siz
104、es in top industries and major6regions,primarily through our direct sales force.We have steadily increased and plan to continue toincrease the number of direct sales professionals we employ,and we intend to develop additionaldistribution channels for our service.Reducing attrition.Our goal is to hav
105、e all of our customers renew their subscriptions at the end of theircontractual terms.We run customer success and other related programs in an effort to secure renewals ofexisting customers.Building our business in top software markets globally.We believe that there is a substantial marketopportunit
106、y for our solutions globally.We plan to continue to aggressively market and sell to customersworldwide via local sales and support professionals with deep expertise in target industries and throughpartnerships with ISVs and system integrators.Additionally,we plan to increase data center capacity byo
107、pening additional data centers in our top global markets.Encouraging the development of third-party apps on our cloud computing platforms.TheSalesforce1 Platform enables existing customers,ISVs and third-party developers to create and delivercloud apps.It is a platform on which apps can be created,t
108、ested,published and run.In addition,theseapps can be marketed and sold on the AppExchange,our online marketplace for business apps,or solddirectly by software vendors.We believe our ecosystem of developers and software vendors will addressthe business requirements of both current and potential custo
109、mers.Technology,Development and OperationsWe deliver our Salesforce solutions as highly scalable,cloud-computing application and platform serviceson a multi-tenant technology architecture.Multi-tenancy is an architectural approach that allows us to operate a single application instance for multipleo
110、rganizations,treating all customers as separate tenants who run in virtual isolation from each other.Customerscan use and customize an application as though they each have a separate instance,yet their data andcustomizations remain secure and insulated from the activities of all other tenants.Our mu
111、lti-tenant services runon a single stack of hardware and software,which is comprised of commercially available hardware and acombination of proprietary and commercially available software.As a result,we are able to spread the cost ofdelivering our services across our user base.In addition,because we
112、 do not have to manage thousands of distinctapplications with their own business logic and database schemas,we believe that we can scale our business fasterthan traditional software vendors.Moreover,we can focus our resources on building new functionality to deliverto our customer base as a whole ra
113、ther than on maintaining an infrastructure to support each of their distinctapplications.Multi-tenancy also allows for faster bug and security fixes,automatic software updates and theability to deploy major releases and frequent,incremental improvements to our services,benefiting the entireuser comm
114、unity.Our services are optimized to run on specific databases and operating systems using the tools and platformsbest suited to serve our customers rather than on-premise software that must be written to the different hardware,operating systems and database platforms existing within a customers uniq
115、ue systems environment.Ourdevelopers build and support solutions and features on a single code base on our chosen technology platform.Our research and development efforts are focused on improving and enhancing the features,functionalityand security of our existing service offerings as well as develo
116、ping new features,functionality and services.Fromtime to time,we supplement our internal research and development activities with outside development resourcesand acquired technology.As part of our business strategy,we periodically acquire companies or technologies,and we incorporate the acquired te
117、chnologies into our solutions.Performance,functional depth and the usabilityof our solutions influence our technology decisions and product direction.Our customers access our services from any geography over the Internet via all of the major Internetbrowsers and on most major mobile device operating
118、 systems.7We provide the majority of our services to our customers from infrastructure operated by us but securedwithin third-party data center hosting facilities located in the United States and other countries.These third-partydata center providers provide space,physical security,continuous power
119、and cooling.The remainder of ourservices operate from cloud computing platform providers who offer Infrastructure as a Service,includingservers,storage,databases and networking.Sources of RevenueWe derive our revenues primarily from subscription fees for our service.We also derive revenues frompremi
120、er support,which provides customers with additional support beyond the standard support that is includedin the basic subscription fee.We recognize subscription and support revenue ratably over the contract term,beginning on thecommencement date of each contract.The majority of our professional servi
121、ces contracts are on a time andmaterials basis,for which we generally recognize revenue as the services are rendered.Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue,depending on whether the revenue recognition criteria have been met.Deferred rev
122、enue primarily consists ofbillings or payments received in advance of revenue recognition from subscription services described above andis recognized as the revenue recognition criteria are met.Unbilled deferred revenue represents future billingsunder our subscription agreements that have not been i
123、nvoiced and,accordingly,are not recorded in deferredrevenue.We generally invoice customers in annual installments.Deferred revenue and unbilled deferred revenueare influenced by several factors,including new business seasonality within the year,the specific timing,size andduration of large customer
124、subscription agreements,the timing and compounding effects of customer renewals,varying billing cycles of subscription agreements,invoice timing,foreign currency fluctuations and new businesslinearity within the quarter.CustomersWe sell to businesses of all sizes and in almost every industry worldwi
125、de.The number of payingsubscriptions at each of our customers ranges from one to hundreds of thousands.None of our customersaccounted for more than five percent of our revenues in fiscal 2015,2014 or 2013.TransactionsOur transaction volume,representing transactions processed through our solutions an
126、d platform,excludingMarketing Cloud and one of our platform service offerings,Heroku,was 585 billion for fiscal 2015,an increaseof 59 percent as compared to fiscal 2014.A transaction is a retrieval or update within the Salesforce database,which can be a page load,an information query,or an API call,
127、among others.Our transaction metrics are used to illustrate the growing usage of our service by our customers and tohighlight the scalability of our service.We do not believe transaction metrics are key performance indicators ofour financial condition.Specifically,there is no direct correlation betw
128、een the transaction activity and ourfinancial results,such as revenue or expense growth.Additionally,transaction activity cannot be relied upon asan indicator of future financial performance.Sales,Marketing and Customer SupportWe organize our sales and marketing programs by geographic regions,includ
129、ing the Americas,Europe andAsia Pacific,which includes Japan.The majority of our revenue from the Americas is attributable to customersin the United States.Approximately 28 percent of our revenue comes from customers outside of the Americas.8Direct SalesWe sell our services primarily through our dir
130、ect sales force,which is comprised of telephone salespersonnel based in regional hubs,and field sales personnel based in territories close to their customers.Both ourtelephone sales and field sales personnel are supported by sales representatives,who are primarily responsible forgenerating qualified
131、 sales leads.Referral and Indirect SalesWe have a network of partners who refer sales leads to us and who then assist in selling to these prospects.This network includes global consulting firms,systems integrators and regional partners.In return,wetypically pay these partners a fee based on the firs
132、t-year subscription revenue generated by the customers whomthey refer.Also included in this network are ISVs,whom we typically pay a percentage of the subscriptionrevenue generated by their referrals.We continue to invest in developing additional distribution channels for our subscription service.Ma
133、rketingOur marketing strategy is to promote our brand and generate demand for our offerings.We use a variety ofmarketing programs across traditional and social channels to target our prospective and current customers,partners,and developers.Our primary marketing activities include:Press and industry
134、 analyst relations to garner third-party validation and generate positive coverage forour company,offerings and value proposition;User conferences and events,such as Dreamforce,as well as participation in trade shows and industryevents,to create customer and prospect awareness;Content marketing and
135、engagement on social channels like Facebook,Twitter,LinkedIn and YouTube;Search engine marketing and advertising to drive traffic to our Web properties;Web site development to engage and educate prospects and generate interest through productinformation and demonstrations,free trials,case studies,wh
136、ite papers,and marketing collateral;Multi-channel marketing campaigns;Customer testimonials;andSales tools and field marketing events to enable our sales organization to more effectively convertleads into customers.Customer Service and SupportOur global customer support group responds to both busine
137、ss and technical inquiries about the use of ourproducts via the web,telephone,email,social networks and other channels.We provide standard customersupport during regular business hours at no charge to customers who purchase any of our paying subscriptioneditions.We also offer premier customer suppor
138、t for an additional fee,which can include services such aspriority access to technical resources,developer support,and system administration.In addition,we offer amission critical support add-on that is designed to provide customers with responses for incidents from adedicated team knowledgeable abo
139、ut the customers specific enterprise architecture,and which offers instructionto optimize their usage of our products.9SeasonalityOur fourth quarter has historically been our strongest quarter for new business and renewals,and our firstquarter is historically our largest collections and operating ca
140、sh flow quarter.For a more detailed discussion,seethe“Seasonal Nature of Deferred Revenue and Accounts Receivable”discussion in Managements Discussionand Analysis.CompetitionThe market for our offerings is highly competitive,rapidly evolving and fragmented,and subject tochanging technology and frequ
141、ent introductions of new products and services.Many prospective customers haveinvested substantial personnel and financial resources to implement and integrate their current enterprisesoftware into their businesses and therefore may be reluctant or unwilling to migrate away from their currentsolutio
142、n to an enterprise cloud computing application service.Additionally,third-party developers may bereluctant to build application services on our platform since they have invested in other competing technologyplatforms.We compete primarily with vendors of packaged business software and companies offer
143、ing CRM apps.Wealso compete with internally developed apps.We may encounter competition from enterprise software vendorswho may develop toolsets and products that allow customers to build new apps that run on the customerscurrentinfrastructure or as hosted services.Our current principal competitors
144、include:On premise offerings from enterprise software application vendors;Cloud computing application service providers;Software companies that provide their product or service free of charge,and only charge a premium foradvanced features and functionality;Social media companies;Traditional platform
145、 development environment companies,Cloud computing development platform companies;andInternally developed applications(by our potential customersinformation technology(“IT”)departments).We believe that as traditional enterprise software application and platform vendors shift more of their focusto cl
146、oud computing,they may become a greater competitive threat.Intellectual PropertyWe rely on a combination of trademark,copyright,trade secret and patent laws in the United States andother jurisdictions as well as confidentiality procedures and contractual provisions to protect our proprietarytechnolo
147、gy and our brands and maintain programs to protect and grow our rights.We also enter intoconfidentiality and proprietary rights agreements with our employees,consultants and other third parties andcontrol access to software,services,documentation and other proprietary information.We believe the dura
148、tion ofour patents is adequate relative to the expected lives of our service offerings.EmployeesAs of January 31,2015,we had more than 16,000 employees.None of our employees in the United States isrepresented by a labor union,however,for certain foreign subsidiaries,workerscouncils represent ourempl
149、oyees.10Available InformationYou can obtain copies of our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,CurrentReports on Form 8-K,and other filings with the SEC,and all amendments to these filings,free of charge fromour website at http:/ soon as reasonably practicablefollowing our filin
150、g of any of these reports with the SEC.You can also obtain copies free of charge by contactingour Investor Relations department at our office address listed above.The public may read and copy any materialsfiled by the Company with the SEC at the SECs Public Reference Room at 100 F Street,NE,Room 158
151、0,Washington,DC 20549.The public may obtain information on the operation of the Public Reference Room bycalling the SEC at 1-800-SEC-0330.The SEC maintains an Internet site that contains reports,proxy andinformation statements and other information regarding issuers that file electronically with the
152、 SEC atwww.sec.gov.The contents of these websites are not incorporated into this filing.Further,the Companysreferences to the URLs for these websites are intended to be inactive textual references only.ITEM 1A.RISK FACTORSThe risks and uncertainties described below are not the only ones facing us.Ot
153、her events that we do notcurrently anticipate or that we currently deem immaterial also may affect our results of operations,cash flowsand financial condition.Risks Related to Our Business and IndustryDefects or disruptions in our services could diminish demand for our services and subject us tosubs
154、tantial liability.Because our services are complex and incorporate a variety of hardware and proprietary and third-partysoftware,our services may have errors or defects that could result in unanticipated downtime for our subscribersand harm to our reputation and our business.Cloud services frequentl
155、y contain undetected errors when firstintroduced or when new versions or enhancements are released.We have from time to time found defects in ourservices and new errors in our services may be detected in the future.In addition,our customers may use ourservices in unanticipated ways that may cause a
156、disruption in services for other customers attempting to accesstheir data.As we acquire companies,we may encounter difficulty in incorporating the acquired technologies intoour services and maintaining the quality standards that are consistent with our brand and reputation.Since ourcustomers use our
157、 services for important aspects of their business,any errors,defects,disruptions in service orother performance problems could hurt our reputation and may damage our customersbusinesses.As a result,customers could elect to not renew our services or delay or withhold payment to us.We could also lose
158、futuresales or customers may make warranty or other claims against us,which could result in an increase in ourprovision for doubtful accounts,an increase in collection cycles for accounts receivable or the expense and riskof litigation.Interruptions or delays in services from our third-party data ce
159、nter hosting facilities or cloud computingplatform providers could impair the delivery of our services and harm our business.We currently serve our customers from third-party data center hosting facilities and cloud computingplatform providers located in the United States and other countries.Any dam
160、age to,or failure of,our systemsgenerally could result in interruptions in our services.Interruptions in our services may reduce our revenue,causeus to issue credits or pay penalties,cause customers to terminate their subscriptions and adversely affect ourattrition rates and our ability to attract n
161、ew customers,all of which would reduce our revenue.Our businesswould also be harmed if our customers and potential customers believe our services are unreliable.As part of our current disaster recovery arrangements,our production environment and all of our customersdata is currently replicated in ne
162、ar real-time in a facility located in the United States.Companies and productsadded through acquisition may be served through alternate facilities.We do not control the operation of any ofthese facilities,and they may be vulnerable to damage or interruption from earthquakes,floods,fires,power loss,1
163、1telecommunications failures and similar events.They may also be subject to break-ins,sabotage,intentional actsof vandalism and similar misconduct.Despite precautions taken at these facilities,the occurrence of a naturaldisaster or an act of terrorism,a decision to close the facilities without adequ
164、ate notice or other unanticipatedproblems at these facilities could result in lengthy interruptions in our services.Even with disaster recoveryarrangements,our services could be interrupted.As we continue to add data centers and add capacity in our existing data centers,we may move or transferour da
165、ta and our customersdata.Despite precautions taken during this process,any unsuccessful data transfersmay impair the delivery of our services,which may damage our business.If our security measures or those of our third-party data center hosting facilities,cloud computingplatform providers,or third-p
166、arty service partners,are breached,and unauthorized access is obtained to acustomers data,our data or our IT systems,our services may be perceived as not being secure,customers maycurtail or stop using our services,and we may incur significant legal and financial exposure and liabilities.Our service
167、s involve the storage and transmission of customersproprietary information,and securitybreaches could expose us to a risk of loss of this information,litigation and possible liability.While we havesecurity measures in place,they may be breached as a result of third-party action,including intentional
168、misconduct by computer hackers,employee error,malfeasance or otherwise and result in someone obtainingunauthorized access to our IT data,our customersdata or our data,including our intellectual property and otherconfidential business information.Additionally,third parties may attempt to fraudulently
169、 induce employees orcustomers into disclosing sensitive information such as user names,passwords or other information in order togain access to our customersdata,our data or our IT systems.Because the techniques used to obtainunauthorized access,or to sabotage systems,change frequently and generally
170、 are not recognized until launchedagainst a target,we may be unable to anticipate these techniques or to implement adequate preventativemeasures.In addition,our customers may authorize third-party technology providers to access their customerdata,and some of our customers may not have adequate secur
171、ity measures in place to protect their data that isstored on our services.Because we do not control our customers or third-party technology providers,or theprocessing of such data by third-party technology providers,we cannot ensure the integrity or security of suchtransmissions or processing.Malici
172、ous third parties may also conduct attacks designed to temporarily denycustomers access to our services.Any security breach could result in a loss of confidence in the security of ourservices,damage our reputation,negatively impact our future sales,disrupt our business and lead to legalliability.As
173、we acquire and invest in companies or technologies,we may not realize the expected business orfinancial benefits and the acquisitions could prove difficult to integrate,disrupt our business,dilutestockholder value and adversely affect our operating results and the market value of our common stock.As
174、 part of our business strategy,we periodically make investments in,or acquisitions of,complementarybusinesses,joint ventures,services and technologies and intellectual property rights,and we expect that we willcontinue to make such investments and acquisitions in the future.Acquisitions and investme
175、nts involvenumerous risks,including:potential failure to achieve the expected benefits of the combination or acquisition;difficulties in,and the cost of,integrating operations,technologies,services and personnel;diversion of financial and managerial resources from existing operations;the potential e
176、ntry into new markets in which we have little or no experience or where competitors mayhave stronger market positions;potential write-offs of acquired assets or investments,and potential financial and credit risks associatedwith acquired customers;potential loss of key employees of the acquired comp
177、any;12inability to generate sufficient revenue to offset acquisition or investment costs;inability to maintain relationships with customers and partners of the acquired business;difficulty of transitioning the acquired technology onto our existing platforms and maintaining thesecurity standards for
178、such technology consistent with our other services;potential unknown liabilities associated with the acquired businesses;unanticipated expenses related to acquired technology and its integration into our existing technology;negative impact to our results of operations because of the depreciation and
179、 amortization of amountsrelated to acquired intangible assets,fixed assets and deferred compensation,and the loss of acquireddeferred revenue and unbilled deferred revenue;delays in customer purchases due to uncertainty related to any acquisition;the need to implement controls,procedures and policie
180、s at the acquired company;challenges caused by distance,language and cultural differences;in the case of foreign acquisitions,the challenges associated with integrating operations across differentcultures and languages and any currency and regulatory risks associated with specific countries;andthe t
181、ax effects of any such acquisitions.Any of these risks could harm our business.In addition,if we finance acquisitions by issuing equity orconvertible or other debt securities or loans,our existing stockholders may be diluted,or we could faceconstraints related to the terms of and repayment obligatio
182、n related to the incurrence of indebtedness that couldaffect the market price of our common stock.Also,valuations of privately-held companies are inherentlycomplex due to the lack of readily available market data.If we determine that any of our investments in suchcompanies have experienced a decline
183、 in fair value,we may be required to record an impairment,which couldnegatively impact our financial results.Privacy concerns and laws,evolving regulation of cloud computing,cross-border data transferrestrictions and other domestic or foreign regulations may limit the use and adoption of our service
184、s andadversely affect our business.Regulation related to the provision of services on the Internet is increasing,as federal,state and foreigngovernments continue to adopt new laws and regulations addressing data privacy and the collection,processing,storage and use of personal information.In some ca
185、ses,foreign data privacy laws and regulations,such as theEuropean Unions Data Protection Directive,and the country-specific regulations that implement that directive,also govern the processing of personal information.Further,laws are increasingly aimed at the use of personalinformation for marketing
186、 purposes,such as the European Unions e-Privacy Directive,and the country-specificregulations that implement that directive.Such laws and regulations are subject to differing interpretations andmay be inconsistent among jurisdictions.These and other requirements could reduce demand for our services
187、orrestrict our ability to store and process data or,in some cases,impact our ability to offer our services in certainlocations or our customersability to deploy our solutions globally.In addition to government activity,privacy advocacy and other industry groups have established or mayestablish new s
188、elf-regulatory standards that may place additional burdens on us.Our customers expect us to meetvoluntary certification or other standards established by third parties,such as TRUSTe.If we are unable tomaintain these certifications or meet these standards,it could adversely affect our ability to pro
189、vide our solutionsto certain customers and could harm our business.The costs of compliance with and other burdens imposed by laws,regulations and standards may limit theuse and adoption of our services and reduce overall demand for it,or lead to significant fines,penalties orliabilities for any nonc
190、ompliance.13Furthermore,concerns regarding data privacy may cause our customerscustomers to resist providing thedata necessary to allow our customers to use our services effectively.Even the perception that the privacy ofpersonal information is not satisfactorily protected or does not meet regulator
191、y requirements could inhibit salesof our products or services,and could limit adoption of our cloud-based solutions.Industry-specific regulation and other requirements and standards are evolving and unfavorableindustry-specific laws,regulations,interpretive positions or standards could harm our busi
192、ness.Our customers and potential customers conduct business in a variety of industries,including financialservices,the public sector,healthcare and telecommunications.Regulators in certain industries have adopted andmay in the future adopt regulations or interpretive positions regarding the use of c
193、loud computing and otheroutsourced services.The costs of compliance with,and other burdens imposed by,industry-specific laws,regulations and interpretive positions may limit our customersuse and adoption of our services and reduceoverall demand for our services.Compliance with these regulations may
194、also require us to devote greaterresources to support certain customers,which may increase costs and lengthen sales cycles.For example,somefinancial services regulators have imposed guidelines for use of cloud computing services that mandate specificcontrols or require financial services enterprises
195、 to obtain regulatory approval prior to outsourcing certainfunctions.If we are unable to comply with these guidelines or controls,or if our customers are unable to obtainregulatory approval to use our services where required,our business may be harmed.In addition,an inability tosatisfy the standards
196、 of certain voluntary third-party certification bodies that our customers may expect,such asan attestation of compliance with the Payment Card Industry(PCI)Data Security Standards,may have an adverseimpact on our business.Further,there are various statutes and regulations relevant to the direct emai
197、l marketingand text-messaging industries,including the Telephone Consumer Protection Act(TCPA).The interpretation ofmany of these statutes and regulations is evolving in the courts and administrative agencies and an inability tocomply with them may have an adverse impact on our business.If in the fu
198、ture we are unable to achieve ormaintain these industry-specific certifications or other requirements or standards relevant to our customers,itmay harm our business.In some cases,industry-specific laws,regulations or interpretive positions may also apply directly to us as aservice provider.Any failu
199、re or perceived failure by us to comply with such requirements could have an adverseimpact on our business.If we experience significant fluctuations in our rate of anticipated growth and fail to balance ourexpenses with our revenue forecasts,our results could be harmed.Due to the pace of change and
200、innovation in enterprise cloud computing services and the unpredictability offuture general economic and financial market conditions and the impact of foreign currency exchange ratefluctuations,we may not be able to accurately forecast our rate of growth.We plan our expense levels andinvestment on e
201、stimates of future revenue and future anticipated rate of growth.We may not be able to adjust ourspending appropriately if the addition of new subscriptions or the renewals of existing subscriptions fall short ofour expectations.A portion of our expenses may also be fixed in nature for some minimum
202、amount of time,suchas with a data center contract or office lease,so it may not be possible to reduce costs in a timely manner orwithout the payment of fees to exit certain obligations early.As a result,we expect that our revenues,operatingresults and cash flows may fluctuate significantly on a quar
203、terly basis.Our recent revenue growth rates may notbe sustainable and may decline in the future.We believe that historical period-to-period comparisons of ourrevenues,operating results and cash flows may not be meaningful and should not be relied upon as an indicationof future performance.We rely on
204、 third-party computer hardware,software and cloud computing platforms that could causeerrors in,or failures of,our services and may be difficult to replace.We rely on computer hardware purchased or leased from,software licensed from,and cloud computingplatforms provided by,third parties in order to
205、offer our services,including database software and hardware froma variety of vendors.Any errors or defects in third-party hardware,software or cloud computing platforms could14result in errors in,or a failure of,our services,which could harm our business.These hardware,software andcloud computing pl
206、atforms may not continue to be available at reasonable prices,on commercially reasonableterms or at all.Any loss of the right to use any of these hardware,software or cloud computing platforms couldsignificantly increase our expenses and otherwise result in delays in the provisioning of our services
207、 untilequivalent technology is either developed by us,or,if available,is identified,obtained through purchase orlicense and integrated into our services.The market in which we participate is intensely competitive,and if we do not compete effectively,ouroperating results could be harmed.The market fo
208、r enterprise applications and platform services is highly competitive,rapidly evolving andfragmented,and subject to changing technology,shifting customer needs and frequent introductions of newproducts and services.We compete primarily with vendors of packaged CRM software and companies offeringon-d
209、emand CRM applications.We also compete with internally developed applications and face competitionfrom enterprise software vendors and online service providers who may develop toolsets and products that allowcustomers to build new applications that run on the customerscurrent infrastructure or as ho
210、sted services.Ourcurrent competitors include:on premise offerings from enterprise software application vendors;cloud computing application service providers;software companies that provide their product or service free of charge,and only charge a premium foradvanced features and functionality;social
211、 media companies;traditional platform development environment companies;cloud computing development platform companies;andinternally developed applications(by our potential customersIT departments).Many of our current and potential competitors enjoy substantial competitive advantages,such as greater
212、name recognition,longer operating histories and larger marketing budgets,as well as substantially greaterfinancial,technical and other resources.In addition,many of our current and potential competitors haveestablished marketing relationships and access to larger customer bases,and have major distri
213、bution agreementswith consultants,system integrators and resellers.As a result,our competitors may be able to respond morequickly and effectively than we can to new or changing opportunities,technologies,standards or customerrequirements.Furthermore,because of these advantages,even if our services a
214、re more effective than the productsand services that our competitors offer,potential customers might select competitive products and services in lieuof purchasing our services.For all of these reasons,we may not be able to compete successfully against ourcurrent and future competitors.Our quarterly
215、results are likely to fluctuate and our stock price and the value of our common stock coulddecline substantially.Our quarterly results are likely to fluctuate.For example,our fiscal fourth quarter has historically been ourstrongest quarter for new business and renewals.The year-over-year compounding
216、 effect of this seasonality inbilling patterns and overall new business and renewal activity causes the value of invoices that we generate in thefourth quarter to continually increase in proportion to our billings in the other three quarters of our fiscal year.Asa result,our fiscal first quarter has
217、 become our largest collections and operating cash flow quarter.Additionally,some of the important factors that may cause our revenues,operating results and cash flows tofluctuate from quarter to quarter include:our ability to retain and increase sales to existing customers,attract new customers and
218、 satisfy ourcustomersrequirements;15the attrition rates for our services;the amount and timing of operating costs and capital expenditures related to the operations andexpansion of our business;changes in deferred revenue and unbilled deferred revenue balances,which are not reflected in thebalance s
219、heet,due to seasonality,the compounding effects of renewals,invoice duration,size,invoicetiming and new business linearity between quarters and within a quarter;changes in foreign currency exchange rates;the number of new employees;changes in our pricing policies and terms of contracts,whether initi
220、ated by us or as a result ofcompetition;the cost,timing and management effort for the introduction of new features to our services;the costs associated with acquiring new businesses and technologies and the follow-on costs ofintegration and consolidating the results of acquired businesses;the rate o
221、f expansion and productivity of our sales force;the length of the sales cycle for our services;new product and service introductions by our competitors;our success in selling our services to large enterprises;variations in the revenue mix of editions of our services;technical difficulties or interru
222、ptions in our services;expenses related to our real estate,our office leases and our data center capacity and expansion;changes in interest rates and our mix of investments,which would impact the return on our investmentsin cash and marketable securities;conditions,particularly sudden changes,in the
223、 financial markets,which have impacted and maycontinue to impact the value of and liquidity of our investment portfolio;income tax effects;our ability to realize benefits from strategic partnerships,acquisition or investments;expenses related to significant,unusual or discrete events,which are recor
224、ded in the period in whichthe events occur;general economic conditions,which may adversely affect either our customersability or willingness topurchase additional subscriptions or upgrade their services,or delay a prospective customerspurchasing decision,reduce the value of new subscription contract
225、s,or affect attrition rates;timing of additional investments in our enterprise cloud computing application and platform servicesand in our consulting services;regulatory compliance costs;the timing of customer payments and payment defaults by customers;extraordinary expenses such as litigation or ot
226、her dispute-related settlement payments;the impact of new accounting pronouncements;equity issuances,including as consideration in acquisitions or due to the conversion of our outstandingconvertible notes at the election of the note holders;16the timing of stock awards to employees and the related a
227、dverse financial statement impact of having toexpense those stock awards on a straight-line basis over their vesting schedules;the timing of commission,bonus,and other compensation payments to employees;andthe timing of payroll and other withholding tax expenses,which are triggered by the payment of
228、bonuses and when employees exercise their vested stock awards.Many of these factors are outside of our control,and the occurrence of one or more of them might cause ouroperating results to vary widely.As such,we believe that historical quarter-to-quarter comparisons of ourrevenues,operating results,
229、changes in our deferred revenue and unbilled deferred revenue balances and cashflows may not be meaningful and should not be relied upon as an indication of future performance.Additionally,if we fail to meet or exceed the expectations of securities analysts and investors,or if one ormore of the secu
230、rities analysts who cover us adversely change their recommendation regarding our stock,themarket price of our common stock could decline.Moreover,our stock price may be based on expectations,estimates and forecasts of our future performance that may be unrealistic or that may not be met.Further,ours
231、tock price may fluctuate based on reporting by the financial media,including television,radio and press reportsand blogs.Our efforts to expand our services beyond the CRM market and to develop our existing services in orderto keep pace with technological developments may not succeed and may reduce o
232、ur revenue growth rate andharm our business.We derive substantially all of our revenue from subscriptions to our CRM enterprise cloud computingapplication services,and we expect this will continue for the foreseeable future.The markets for our AnalyticsCloud and Community Cloud remain relatively new
233、 and it is uncertain whether our efforts will ever result insignificant revenue for us.Further,the introduction of new services beyond the CRM market may not besuccessful,and early stage interest and adoption of such new services may not result in long term success orsignificant revenue for us.Our e
234、fforts to expand our services beyond the CRM market may not succeed and mayreduce our revenue growth rate.Additionally,if we are unable to develop enhancements to and new features for our existing or new servicesthat keep pace with rapid technological developments,our business will be harmed.The suc
235、cess ofenhancements,new features and services depends on several factors,including the timely completion,introduction and market acceptance of the feature,service or enhancement.Failure in this regard maysignificantly impair our revenue growth.In addition,because our services are designed to operate
236、 on a variety ofnetwork hardware and software platforms using a standard browser,we will need to continuously modify andenhance our services to keep pace with changes in Internet-related hardware,software,communication,browserand database technologies.We may not be successful in either developing th
237、ese modifications and enhancementsor in bringing them to market timely.Furthermore,uncertainties about the timing and nature of new networkplatforms or technologies,or modifications to existing platforms or technologies,could increase our research anddevelopment or service delivery expenses.Any fail
238、ure of our services to operate effectively with future networkplatforms and technologies could reduce the demand for our services,result in customer dissatisfaction and harmour business.Sales to customers outside the United States expose us to risks inherent in international sales.We sell our servic
239、es throughout the world and are subject to risks and challenges associated withinternational business.Historically,sales in Europe and Asia Pacific together have represented approximately30 percent of our total revenues,and we intend to continue to expand our international sales efforts.The risks an
240、dchallenges associated with sales to customers outside the United States include:localization of our services,including translation into foreign languages and associated expenses;laws and business practices favoring local competitors;17pressure on the creditworthiness of sovereign nations,particular
241、ly in Europe,where we have customersand a balance of our cash,cash equivalents and marketable securities;liquidity issues or political actions by sovereign nations,which could result in decreased values ofthese balances;foreign currency fluctuations and controls;compliance with multiple,conflicting
242、and changing governmental laws and regulations,includingemployment,tax,privacy,anti-corruption,import/export,antitrust,data protection and industry-specific laws and regulations,including rules related to compliance by our third-party resellers;regional data privacy laws and other regulatory require
243、ments that apply to outsourced service providersand to the transmission of our customersdata across international borders;treatment of revenue from international sources and changes to tax codes,including being subject toforeign tax laws and being liable for paying withholding income or other taxes
244、in foreign jurisdictions;different pricing environments;difficulties in staffing and managing foreign operations;different or lesser protection of our intellectual property;longer accounts receivable payment cycles and other collection difficulties;natural disasters,acts of war,terrorism,pandemics o
245、r security breaches;andregional economic and political conditions.Any of these factors could negatively impact our business and results of operations.Additionally,our international subscription fees are paid either in U.S.dollars or local currency.As a result,fluctuations in the value of the U.S.dol
246、lar and foreign currencies may make our services more expensive forinternational customers,which could harm our business.Because we recognize revenue from subscriptions for our services over the term of the subscription,downturns or upturns in new business may not be immediately reflected in our ope
247、rating results.We generally recognize revenue from customers ratably over the terms of their subscription agreements,which are typically 12 to 36 months.As a result,most of the revenue we report in each quarter is the result ofsubscription agreements entered into during previous quarters.Consequentl
248、y,a decline in new or renewedsubscriptions in any one quarter may not be reflected in our revenue results for that quarter.Any such decline,however,will negatively affect our revenue in future quarters.Accordingly,the effect of significant downturns insales and market acceptance of our services,and
249、potential changes in our attrition rate,may not be fully reflectedin our results of operations until future periods.Our subscription model also makes it difficult for us to rapidlyincrease our revenue through additional sales in any period,as revenue from new customers must be recognizedover the app
250、licable subscription term.If our customers do not renew their subscriptions for our services or reduce the number of payingsubscriptions at the time of renewal,our revenue will decline and our business will suffer.If we cannotaccurately predict subscription renewals or upgrade rates,we may not meet
251、our revenue targets which mayadversely affect the market price of our common stock.Our customers have no obligation to renew their subscriptions for our services after the expiration of theirinitial subscription period,which is typically 12 to 36 months,and in the normal course of business,somecusto
252、mers have elected not to renew.In addition,our customers may renew for fewer subscriptions,renew forshorter contract lengths,or switch to lower cost offerings of our services.We cannot accurately predict attritionrates given our varied customer base of enterprise and small and medium size business c
253、ustomers and the number18of multi-year subscription contracts.Our attrition rates may increase or fluctuate as a result of a number offactors,including customer dissatisfaction with our services,customersspending levels,decreases in the numberof users at our customers,pricing changes and deteriorati
254、ng general economic conditions.Our future success also depends in part on our ability to sell additional features and services,moresubscriptions or enhanced editions of our services to our current customers.This may also require increasinglysophisticated and costly sales efforts that are targeted at
255、 senior management.Similarly,the rate at which ourcustomers purchase new or enhanced services depends on a number of factors,including general economicconditions and that our customers do not react negatively to any price changes related to these additional featuresand services.If our efforts to ups
256、ell to our customers are not successful our business may suffer.If the market for our technology delivery model and enterprise cloud computing services develops moreslowly than we expect,our business could be harmed.Our success depends on the willingness of third-party developers to build applicatio
257、ns that arecomplementary to our services.Without the development of these applications,both current and potentialcustomers may not find our services sufficiently attractive.In addition,for those customers who authorize athird-party technology partner access to their data,we do not provide any warran
258、ty related to the functionality,security and integrity of the data transmission or processing.Despite contract provisions to protect us,customersmay look to us to support and provide warranties for the third-party applications,which may expose us topotential claims,liabilities and obligations for ap
259、plications we did not develop or sell,all of which could harmour business.Supporting our existing and growing customer base could strain our personnel resources andinfrastructure,and if we are unable to scale our operations and increase productivity,we may not be able tosuccessfully implement our bu
260、siness plan.We continue to experience significant growth in our customer base and personnel,which has placed a strainon our management,administrative,operational and financial infrastructure.We anticipate that additionalinvestments in our internal infrastructure,data center capacity,research,custome
261、r support and development,andreal estate spending will be required to scale our operations and increase productivity,to address the needs of ourcustomers,to further develop and enhance our services,to expand into new geographic areas,and to scale withour overall growth.If we fail to successfully sca
262、le our operations and increase productivity,we will be unable toexecute our business plan.We regularly upgrade or replace our various software systems.If the implementations of these newapplications are delayed,or if we encounter unforeseen problems with our new systems or in migrating awayfrom our
263、existing applications and systems,our operations and our ability to manage our business could benegatively impacted.Our success will depend in part upon the ability of our senior management to manage our projected growtheffectively.To do so,we must continue to increase the productivity of our existi
264、ng employees and to hire,trainand manage new employees as needed.To manage the expected domestic and international growth of ouroperations and personnel,we will need to continue to improve our operational,financial and managementcontrols,our reporting systems and procedures,and our utilization of re
265、al estate.The additional investments weare making will increase our cost base,which will make it more difficult for us to offset any future revenueshortfalls by reducing expenses in the short term.As more of our sales efforts are targeted at larger enterprise customers,our sales cycle may become mor
266、etime-consuming and expensive,we may encounter pricing pressure and implementation and customizationchallenges,and we may have to delay revenue recognition for some complex transactions,all of which couldharm our business and operating results.As we target more of our sales efforts at larger enterpr
267、ise customers,we may face greater costs,longer salescycles,greater competition and less predictability in completing some of our sales.In this market segment,the19customers decision to use our services may be an enterprise-wide decision and,if so,these types of sales wouldrequire us to provide great
268、er levels of education regarding the use and benefits of our services,as well aseducation regarding privacy and data protection laws and regulations to prospective customers with internationaloperations.In addition,larger customers may demand more customization,integration services and features.As a
269、result of these factors,these sales opportunities may require us to devote greater sales support and professionalservices resources to individual customers,driving up costs and time required to complete sales and diverting ourown sales and professional services resources to a smaller number of large
270、r transactions,while potentiallyrequiring us to delay revenue recognition on some of these transactions until the technical or implementationrequirements have been met.Pricing and packaging strategies for enterprise and other customers for subscriptions to our existing andfuture service offerings ma
271、y not be widely accepted by other new or existing customers.Our adoption of suchnew pricing and packaging strategies may harm our business.For large enterprise customers,professional services may also be performed by a third party or acombination of our own staff and a third party.Our strategy is to
272、 work with third parties to increase the breadthof capability and depth of capacity for delivery of these services to our customers.If a customer is not satisfiedwith the quality of work performed by us or a third party or with the type of services or solutions delivered,thenwe could incur additiona
273、l costs to address the situation,the profitability of that work might be impaired,and thecustomers dissatisfaction with our services could damage our ability to obtain additional work from thatcustomer.In addition,negative publicity related to our customer relationships,regardless of its accuracy,ma
274、yfurther damage our business by affecting our ability to compete for new business with current and prospectivecustomers.We have been and may in the future be sued by third parties for various claims including allegedinfringement of proprietary rights.We are involved in various legal matters arising
275、from the normal course of business activities.These mayinclude claims,suits,government investigations and other proceedings involving alleged infringement of third-party patents and other intellectual property rights,and commercial,corporate and securities,labor andemployment,wage and hour,and other
276、 matters.The software and Internet industries are characterized by the existence of a large number of patents,trademarks and copyrights and by frequent litigation based on allegations of infringement or other violations ofintellectual property rights.We have received in the past and may receive in t
277、he future communications fromthird parties,including practicing entities and non-practicing entities,claiming that we have infringed theirintellectual property rights.In addition,we have been,and may in the future be,sued by third parties for alleged infringement of theirclaimed proprietary rights.F
278、or example,during fiscal 2015,we received a communication from a largetechnology company alleging that we infringed certain of its patents.While we continue to analyze this claim andno litigation has been filed to date,there can be no assurance that this claim will not lead to litigation in thefutur
279、e.Our technologies may be subject to injunction if they are found to infringe the rights of a third party or wemay be required to pay damages,or both.Further,many of our subscription agreements require us to indemnifyour customers for third-party intellectual property infringement claims,which would
280、 increase the cost to us of anadverse ruling on such a claim.The outcome of any claims or litigation,regardless of the merits,is inherently uncertain.Any claims andlawsuits,and the disposition of such claims and lawsuits,whether through settlement or licensing discussions,orlitigation,could be time-
281、consuming and expensive to resolve,divert management attention from executing ourbusiness plan,result in efforts to enjoin our activities,lead to attempts on the part of other parties to pursuesimilar claims and,in the case of intellectual property claims,require us to change our technology,change o
282、urbusiness practices,pay monetary damages or enter into short-or long-term royalty or licensing agreements.20Any adverse determination related to intellectual property claims or other litigation could prevent us fromoffering our services to others,could be material to our financial condition or cash
283、 flows,or both,or couldotherwise adversely affect our operating results.In addition,depending on the nature and timing of any suchdispute,an unfavorable resolution of a legal matter could materially affect our future results of operations or cashflows or both of a particular quarter.In addition,our
284、exposure to risks associated with various claims,including the use of intellectual property,may be increased as a result of acquisitions of other companies.For example,we may have a lower level ofvisibility into the development process with respect to intellectual property or the care taken to safeg
285、uard againstinfringement risks with respect to the acquired company or technology.In addition,third parties may makeinfringement and similar or related claims after we have acquired technology that had not been asserted prior toour acquisition.Any failure to protect our intellectual property rights
286、could impair our ability to protect our proprietarytechnology and our brand.If we fail to protect our intellectual property rights adequately,our competitors may gain access to ourtechnology,and our business may be harmed.In addition,defending our intellectual property rights may entailsignificant e
287、xpense.Any of our patents,trademarks or other intellectual property rights may be challenged byothers or invalidated through administrative process or litigation.While we have some U.S.patents and manyU.S.and international patent applications pending,we may be unable to obtain patent protection for
288、thetechnology covered in our patent applications or the patent protection may not be obtained quickly enough tomeet our business needs.In addition,our existing patents and any patents issued in the future may not provide uswith competitive advantages,or may be successfully challenged by third partie
289、s.Furthermore,legal standardsrelating to the validity,enforceability and scope of protection of intellectual property rights are uncertain,and wealso may face proposals to change the scope of protection for some intellectual property rights in the U.S.Effective patent,trademark,copyright and trade s
290、ecret protection may not be available to us in every country inwhich our services are available.The laws of some foreign countries may not be as protective of intellectualproperty rights as those in the U.S.,and mechanisms for enforcement of intellectual property rights may beinadequate.Also,our inv
291、olvement in standard setting activity or the need to obtain licenses from others mayrequire us to license our intellectual property.Accordingly,despite our efforts,we may be unable to prevent thirdparties from using our intellectual property.We may be required to spend significant resources to monit
292、or and protect our intellectual property rightsand we may conclude that in at least some instances the benefits of protecting our intellectual property rights maybe outweighed by the expense.We may initiate claims or litigation against third parties for infringement of ourproprietary rights or to es
293、tablish the validity of our proprietary rights.Any litigation,whether or not it is resolvedin our favor,could result in significant expense to us and divert the efforts of our technical and managementpersonnel.Our continued success depends on our ability to maintain and enhance our brands.We believe
294、 that the brand identities we have developed have significantly contributed to the success of ourbusiness.Maintaining and enhancing the Salesforce brand and our other brands are critical to expanding our baseof customers,partners and employees.Our brand strength will depend largely on our ability to
295、 remain atechnology leader and continue to provide high-quality innovative products,services,and features.In order tomaintain and enhance our brands,we may be required to make substantial investments that may later prove to beunsuccessful.If we fail to maintain and enhance our brands,or if we incur
296、excessive expenses in our efforts to doso,our business,operating results and financial condition may be materially and adversely affected.We may lose key members of our management team or development and operations personnel,and maybe unable to attract and retain employees we need to support our ope
297、rations and growth.Our success depends substantially upon the continued services of our executive officers and other keymembers of management,particularly our Chief Executive Officer.From time to time,there may be changes in21our executive management team resulting from the hiring or departure of ex
298、ecutives.Such changes in ourexecutive management team may be disruptive to our business.We are also substantially dependent on thecontinued service of our existing development and operations personnel because of the complexity of ourservices and technologies.We do not have employment agreements with
299、 any of our executive officers,keymanagement,development or operations personnel and they could terminate their employment with us at anytime.The loss of one or more of our key employees or groups could seriously harm our business.In the technology industry,there is substantial and continuous compet
300、ition for engineers with high levels ofexperience in designing,developing and managing software and Internet-related services,as well as competitionfor sales executives and operations personnel.We may not be successful in attracting and retaining qualifiedpersonnel.We have from time to time experien
301、ced,and we expect to continue to experience,difficulty in hiringand retaining highly skilled employees with appropriate qualifications.If we fail to attract new personnel or failto retain and motivate our current personnel,our business and future growth prospects could be severely harmed.Any failure
302、 in our delivery of high-quality technical support services may adversely affect ourrelationships with our customers and our financial results.Our customers depend on our support organization to resolve technical issues relating to our applications.We may be unable to respond quickly enough to accom
303、modate short-term increases in customer demand forsupport services.Increased customer demand for these services,without corresponding revenues,could increasecosts and adversely affect our operating results.In addition,our sales process is highly dependent on ourapplications and business reputation a
304、nd on positive recommendations from our existing customers.Any failureto maintain high-quality technical support,or a market perception that we do not maintain high-quality support,could adversely affect our reputation,our ability to sell our enterprise cloud computing solutions to existing andprosp
305、ective customers,and our business,operating results and financial position.Periodic changes to our sales organization can be disruptive and may reduce our rate of growth.We periodically change and make adjustments to our sales organization in response to market opportunities,competitive threats,mana
306、gement changes,product introductions or enhancements,acquisitions,salesperformance,increases in sales headcount,cost levels and other internal and external considerations.Any suchfuture sales organization changes may result in a temporary reduction of productivity,which could negativelyaffect our ra
307、te of growth.In addition,any significant change to the way we structure our compensation of oursales organization may be disruptive and may affect our revenue growth.Unanticipated changes in our effective tax rate and additional tax liabilities may impact our operatingresultsWe are subject to income
308、 taxes in the United States and various jurisdictions outside of the United States.Our effective tax rate could fluctuate due to changes in the mix of earnings and losses in countries with differingstatutory tax rates.Our tax expense could also be impacted by changes in non-deductible expenses,chang
309、es inexcess tax benefits related to exercises and vesting of stock-based expense,changes in the valuation of deferredtax assets and liabilities and our ability to utilize them and the applicability of withholding taxes.We are subject to tax examinations in multiple jurisdictions.While we regularly e
310、valuate new informationthat may change our judgment resulting in recognition,derecognition or change in measurement of a tax positiontaken,there can be no assurance that the final determination of any examinations will not have an adverse effecton our operating results and financial position.Our tax
311、 provision could also be impacted by changes in federal,state or international tax laws includingfundamental tax law changes applicable to corporate multinationals currently being considered by manycountries including the United States as well as several European countries.22Additionally,we may be s
312、ubject to additional tax liabilities due to changes in non-income taxes resultingfrom changes in federal,state or international tax laws,changes in taxing jurisdictionsadministrativeinterpretations,decisions,policies,and positions,results of tax examinations,settlements or judicial decisions,changes
313、 in accounting principles,changes to the business operations,including acquisitions,as well as theevaluation of new information that results in a change to a tax position taken in a prior period.Our debt service obligations and operating lease commitments may adversely affect our financialcondition
314、and cash flows from operations.We have a high level of debt,including our 0.25%Senior Notes due April 1,2018,borrowings under ourrevolving credit facility and capital lease arrangements.Additionally,we have significant contractualcommitments in operating lease arrangements,which are not reflected on
315、 our consolidated balance sheet.Inaddition,we have a financing obligation for a leased facility of which we are deemed the owner for accountingpurposes.Our maintenance of this indebtedness could:impair our ability to obtain additional financing in the future for working capital,capital expenditures,
316、acquisitions,general corporate or other purposes;cause us to dedicate a substantial portion of our cash flows from operations towards debt serviceobligations and principal repayments;make us more vulnerable to downturns in our business,our industry or the economy in general;anddue to limitations wit
317、hin the revolving credit facility covenants,restrict our ability to incur additionalindebtedness,grant liens,merge or consolidate,dispose of assets,make investments,makeacquisitions,enter into transactions with affiliates,pay dividends or make distributions,repurchasestock and enter into restrictive
318、 agreements,as defined in the credit agreement.Our ability to meet our expenses and debt obligations will depend on our future performance,which will beaffected by financial,business,economic,regulatory and other factors.We will not be able to control many ofthese factors,such as economic conditions
319、 and governmental regulations.Further,our operations may notgenerate sufficient cash to enable us to service our debt.If we fail to make a payment on our debt,we could be indefault on such debt.If we are at any time unable to generate sufficient cash flows from operations to service ourindebtedness
320、when payment is due,we may be required to attempt to renegotiate the terms of the instrumentsrelating to the indebtedness,seek to refinance all or a portion of the indebtedness or obtain additional financing.There can be no assurance that we would be able to successfully renegotiate such terms,that
321、any suchrefinancing would be possible or that any additional financing could be obtained on terms that are favorable oracceptable to us.A failure to comply with the covenants and other provisions of our outstanding debt could result in events ofdefault under such instruments,which could permit accel
322、eration of all of our notes and borrowings under ourrevolving credit facility.Any required repayment of our notes or revolving credit facility as a result of afundamental change or other acceleration would lower our current cash on hand such that we would not havethose funds available for use in our
323、 business.Weakened global economic conditions may adversely affect our industry,business and results ofoperations.Our overall performance depends in part on worldwide economic conditions.The United States and otherkey international economies have experienced cyclical downturns from time to time in w
324、hich economic activitywas impacted by falling demand for a variety of goods and services,restricted credit,poor liquidity,reducedcorporate profitability,volatility in credit,equity and foreign exchange markets,bankruptcies and overalluncertainty with respect to the economy.These conditions affect th
325、e rate of information technology spending andcould adversely affect our customersability or willingness to purchase our enterprise cloud computing services,delay prospective customerspurchasing decisions,reduce the value or duration of their subscription contracts,oraffect attrition rates,all of whi
326、ch could adversely affect our operating results.23Natural disasters and other events beyond our control could materially adversely affect us.Natural disasters or other catastrophic events may cause damage or disruption to our operations,international commerce and the global economy,and thus could ha
327、ve a strong negative effect on us.Our businessoperations are subject to interruption by natural disasters,fire,power shortages,pandemics and other eventsbeyond our control.Although we maintain crisis management and disaster response plans,such events couldmake it difficult or impossible for us to de
328、liver our services to our customers,and could decrease demand for ourservices.The majority of our research and development activities,corporate headquarters,informationtechnology systems,and other critical business operations,are located near major seismic faults in the SanFrancisco Bay Area.Because
329、 we do not carry earthquake insurance for direct quake-related losses,with theexception of the building that we own in San Francisco,and significant recovery time could be required toresume operations,our financial condition and operating results could be materially adversely affected in theevent of
330、 a major earthquake or catastrophic event.Risks Relating to Our Convertible Senior Notes and Our Common StockThe market price of our common stock is likely to be volatile and could subject us to litigation.The trading prices of the securities of technology companies have been highly volatile.Accordi
331、ngly,themarket price of our notes and common stock has been and is likely to continue to be subject to wide fluctuations.Factors affecting the market price of our notes and common stock include:variations in our operating results,earnings per share,cash flows from operating activities,deferredrevenu
332、e and other financial metrics and non-financial metrics,and how those results compare toanalyst expectations;forward-looking guidance to industry and financial analysts related to future revenue and earnings pershare;changes in the estimates of our operating results or changes in recommendations by
333、securities analyststhat elect to follow our common stock;announcements of technological innovations,new services or service enhancements,strategic alliancesor significant agreements by us or by our competitors;announcements by us or by our competitors of mergers or other strategic acquisitions,or rumors ofsuch transactions involving us or our competitors;announcements of customer additions and cus
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