Salesforce is not ‘just an SFA company anymore’
For a company that made its bones selling customer relationship management software, Salesforce.com has done pretty well for itself.
The company claimed its “best quarter ever” Thursday with revenue rising 24% to $1.63 billion. Profits from operations for the quarter, ending July 31, were $19.8 million versus a $33.4 million loss during the same period a year earlier.
But the company, built on CRM otherwise known as sales force automation (SFA) software, is working like mad to broaden its appeal with plans to launch its first industry-specific vertical “clouds” in the next month, probably at Dreamforce, the company’s massive annual customer event in September.
Salesforce’s SFA software is typically used by sales people to enter leads and track deals. It handles the types of functions that are useful across many industries. But outside vendors see demand for more customized applications to suit say, the automotive or healthcare industries, as well.
In response to a question about the company’s Service Cloud, Keith Block, Salesforce.com’s president, cited the traction that product is getting as “proof positive that we’re not just an SFA company and we’re very diversified.”
Salesforce CEO Marc Benioff, who seemed even more energetic than normal on Thursday’s call (“This is just our best quarter ever!”), noted that the support site for Sony PlayStation and for Home Depot’s customer service run on Salesforce’s Service Cloud.
This push into specific verticals and into other broad-based applications like service and marketing, represents a big change for a company that after all, picked “CRM” as its stock ticker (CRM). In the past few years, Salesforce has spent huge money, $2.5 billion on ExactTarget, for example, to build out its marketing automation software service.
But Salesforce is not alone in trying to expand its toehold in existing customer accounts. Rivals Oracle (ORCL), SAP (SAP), and Microsoft (MSFT) are all chasing many of the same opportunities. Providing more specialized “industry vertical” software is yet another staple of the client-server era of computing that is spilling over into the cloud epoch.
The idea is that a software company can charge more for very specific features tailored to a given type of business than it can for a more generic version. The flip side is that gaining all that industry know-how can be expensive and time-consuming.
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