Salesforce (CRM) 10-K 11 Mar 10 2010 FY Annual report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	12 Months Ended Jan. 31, 2010	12 Months Ended Jan. 31, 2009
Current assets:
Cash and cash equivalents	$1,011,306	$483,834
Short-term marketable securities	230,659	213,769
Accounts receivable, net of allowance for doubtful accounts of $1,050 and $1,527 at January 31, 2010 and 2009, respectively	320,956	266,555
Deferred commissions	47,388	39,384
Deferred income taxes	40,116	31,900
Prepaid expenses and other current assets	55,734	33,115
Total current assets	1,706,159	1,068,557
Marketable securities, noncurrent	485,083	184,962
Fixed assets, net	89,711	77,027
Deferred commissions, noncurrent	28,140	17,699
Deferred income taxes, noncurrent	27,579	26,589
Capitalized software, net	34,809	29,989
Goodwill	48,955	44,872
Other assets, net	39,765	30,127
Total assets	2,460,201	1,479,822
Current liabilities:
Accounts payable	14,791	16,379
Accrued expenses and other current liabilities	194,738	163,205
Income taxes payable	8,424	3,619
Deferred revenue	690,177	583,763
Total current liabilities	908,130	766,966
0.75% Convertible senior notes due 2015, net	450,198	0
Income taxes payable, noncurrent	17,551	12,490
Long-term lease liabilities and other	13,485	7,616
Deferred revenue, noncurrent	14,171	10,263
Total liabilities	1,403,535	797,335
Commitments and contingencies (Notes 8 and 9)
Salesforce.com stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized and none issued and outstanding	0	0
Common stock, $0.001 par value; 400,000,000 shares authorized, 127,152,449 and 122,850,062 issued and outstanding at January 31, 2010 and 2009, respectively	127	123
Additional paid-in capital	938,544	648,724
Accumulated other comprehensive loss	(1,430)	(2,905)
Retained earnings	106,561	25,842
Total stockholders' equity controlling interest	1,043,802	671,784
Total stockholders' equity noncontrolling interest	12,864	10,703
Total stockholders' equity	1,056,666	682,487
Total liabilities and stockholders' equity	$2,460,201	$1,479,822

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Thousands, except Share data	Jan. 31, 2010	Jan. 31, 2009
Accounts receivable, allowance for doubtful accounts	$1,050	$1,527
Preferred stock, par value	0.001	0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	0.001	0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, issued	127,152,449	122,850,062
Common stock, outstanding	127,152,449	122,850,062

Statement Of Operations

Statement Of Operations (USD $)
In Thousands, except Per Share data	12 Months Ended Jan. 31, 2010		12 Months Ended Jan. 31, 2009		12 Months Ended Jan. 31, 2008
Revenues:
Subscription and support	$1,209,472		$984,574		$680,581
Professional services and other	96,111		92,195		68,119
Total revenues	1,305,583		1,076,769		748,700
Cost of revenues:
Subscription and support	159,172		127,082		91,268
Professional services and other	98,753		93,389		80,323
Total cost of revenues	257,925	[1]	220,471	[1]	171,591	[1]
Gross profit	1,047,658		856,298		577,109
Operating expenses:
Research and development	131,897		99,530		63,812
Marketing and sales	605,199		534,413		376,480
General and administrative	195,290		158,613		116,508
Total operating expenses	932,386	[1]	792,556	[1]	556,800	[1]
Income from operations	115,272		63,742		20,309
Investment income	30,408		22,774		24,539
Interest expense	(2,000)		(107)		(46)
Gain on sale of investment	0		0		1,272
Other income (expense)	(1,299)		(817)		139
Income before provision for income taxes and noncontrolling interest	142,381		85,592		46,213
Provision for income taxes	(57,689)		(37,557)		(23,385)
Consolidated net income	84,692		48,035		22,828
Less: Net income attributable to noncontrolling interest	(3,973)		(4,607)		(4,472)
Net income attributable to salesforce.com	$80,719		$43,428		$18,356
Earnings per share-basic and diluted:
Basic net income per share attributable to salesforce.com common shareholders	0.65		0.36		0.16
Diluted net income per share attributable to salesforce.com common shareholders	0.63		0.35		0.15
Shares used in computing basic net income per share	124,462		121,183		116,840
Shares used in computing diluted net income per share	128,114		125,228		122,422
[1]Amounts include stock-based expenses, as follows (see Note 1): Fiscal Year EndedJanuary 31, 2010 2009 2008 Cost of revenues $ 12,570 $ 11,051 $ 7,926 Research and development 13,129 9,852 6,336 Marketing and sales 39,722 36,028 25,423 General and administrative 23,471 20,435 15,522

Statement Of Operations (Parent

Statement Of Operations (Parenthetical) (USD $)
In Thousands	12 Months Ended Jan. 31, 2010	12 Months Ended Jan. 31, 2009	12 Months Ended Jan. 31, 2008
Stock-based expenses, Cost of revenues	$12,570	$11,051	$7,926
Stock-based expenses, Research and development	13,129	9,852	6,336
Stock-based expenses, Marketing and sales	39,722	36,028	25,423
Stock-based expenses, General and administrative	$23,471	$20,435	$15,522

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Thousands, except Share data	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings (Deficit)	Total Stockholders' Equity Controlling Interest	Total Stockholders' Equity Noncontrolling Interest	Total
Beginning Balance at Jan. 31, 2007	$115	$319,496	($2,187)	($35,633)	$281,791	$4,634	$286,425
Beginning Balance (in shares) at Jan. 31, 2007	114,537,560
Exercise of stock options, warrants and stock grants to board members for board services (in shares)	4,533,418
Exercise of stock options, warrants and stock grants to board members for board services	4	63,192			63,196		63,196
Vested restricted stock units converted to shares (in shares)	234,035
Tax benefits from employee stock plans		34,847			34,847		34,847
Stock-based expenses		54,267			54,267		54,267
Noncontrolling interest						4,309	4,309
Components of comprehensive income, net of tax:
Foreign currency translation adjustment			(2,753)		(2,753)		(2,753)
Unrealized gain/loss on marketable securities and cash equivalents			2,664		2,664		2,664
Net income attributable to salesforce.com				18,356	18,356		18,356
Total comprehensive income							18,267
Adjustment to retained earnings for new tax guidance related to uncertain tax positions				(309)	(309)		(309)
Ending Balance (in shares) at Jan. 31, 2008	119,305,013
Ending Balance at Jan. 31, 2008	119	471,802	(2,276)	(17,586)	452,059	8,943	461,002
Exercise of stock options, warrants and stock grants to board members for board services (in shares)	3,009,276
Exercise of stock options, warrants and stock grants to board members for board services	4	45,903			45,907		45,907
Vested restricted stock units converted to shares (in shares)	535,773
Tax benefits from employee stock plans		55,421			55,421		55,421
Stock-based expenses		75,598			75,598		75,598
Noncontrolling interest						1,760	1,760
Components of comprehensive income, net of tax:
Foreign currency translation adjustment and other			260		260		260
Unrealized gain/loss on marketable securities and cash equivalents			(889)		(889)		(889)
Net income attributable to salesforce.com				43,428	43,428		43,428
Total comprehensive income							42,799
Ending Balance (in shares) at Jan. 31, 2009	122,850,062
Ending Balance at Jan. 31, 2009	123	648,724	(2,905)	25,842	671,784	10,703	682,487
Exercise of stock options, warrants and stock grants to board members for board services (in shares)	3,472,826
Exercise of stock options, warrants and stock grants to board members for board services	4	96,153			96,157		96,157
Vested restricted stock units converted to shares (in shares)	829,561
Tax benefits from employee stock plans		49,478			49,478		49,478
Stock-based expenses		86,570			86,570		86,570
Equity component of the convertible notes issuance, net.		124,836			124,836		124,836
Purchase of convertible note hedges		(126,500)			(126,500)		(126,500)
Sale of warrants		59,283			59,283		59,283
Noncontrolling interest						2,161	2,161
Components of comprehensive income, net of tax:
Foreign currency translation adjustment and other			(2,820)		(2,820)		(2,820)
Unrealized gain/loss on marketable securities and cash equivalents			4,295		4,295		4,295
Net income attributable to salesforce.com				80,719	80,719		80,719
Total comprehensive income							82,194
Ending Balance (in shares) at Jan. 31, 2010	127,152,449
Ending Balance at Jan. 31, 2010	$127	$938,544	($1,430)	$106,561	$1,043,802	$12,864	$1,056,666

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	12 Months Ended Jan. 31, 2010	12 Months Ended Jan. 31, 2009	12 Months Ended Jan. 31, 2008
Operating activities
Consolidated net income	$84,692	$48,035	$22,828
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	53,177	35,971	24,219
Amortization of debt discount	728	0	0
Amortization of deferred commissions	63,891	58,732	42,195
Change in the deferred income tax valuation allowance	0	0	(970)
Expense related to stock-based awards	88,892	77,366	55,207
Excess tax benefits from employee stock plans	(51,539)	(54,597)	(31,978)
Loss on securities	0	1,783	0
Gain on sale of investment	0	0	(1,272)
Changes in assets and liabilities:
Accounts receivable, net	(54,522)	(44,798)	(91,368)
Deferred commissions	(82,336)	(63,701)	(62,759)
Prepaid expenses and other current assets	(3,899)	(4,746)	(11,376)
Other assets	(1,405)	(1,292)	(7,669)
Accounts payable	(1,588)	8,512	(1,392)
Accrued expenses and other current liabilities	64,498	55,440	71,779
Deferred revenue	110,322	112,852	196,831
Net cash provided by operating activities	270,911	229,557	204,275
Investing activities
Purchase of subsidiary stock	0	(21,622)	0
Business combinations, net of cash acquired	(11,999)	(27,907)	0
Purchases of marketable securities	(1,317,952)	(449,035)	(447,296)
Sales of marketable securities	874,573	154,287	19,608
Maturities of marketable securities	130,663	284,339	366,872
Capital expenditures	(53,901)	(61,059)	(43,552)
Proceeds from sale of investment	0	0	1,659
Net cash used in investing activities	(378,616)	(120,997)	(102,709)
Financing activities
Proceeds from borrowings on convertible debt	567,094	0	0
Proceeds from issuance of warrants	59,283	0	0
Purchase of convertible note hedge	(126,500)	0	0
Proceeds from the exercise of stock options	93,856	43,311	60,910
Excess tax benefits from employee stock plans	51,539	54,597	31,978
Principal payments on capital lease obligations	(8,119)	(997)	(175)
Net cash provided by financing activities	637,153	96,911	92,713
Effect of exchange rate changes	(1,976)	(732)	(1,792)
Net increase in cash and cash equivalents	527,472	204,739	192,487
Cash and cash equivalents at beginning of year	483,834	279,095	86,608
Cash and cash equivalents at end of year	1,011,306	483,834	279,095
Cash paid during the period for:
Interest	1,069	107	46
Income taxes, net of tax refunds	28,479	9,600	1,564
Noncash financing and investing activities
Fixed assets acquired under capital lease	$17,000	$6,406	$0

Summary of Business and Signifi

Summary of Business and Significant Accounting Policies
	12 Months Ended Jan. 31, 2010
Summary of Business and Significant Accounting Policies	1. Summary of Business and Significant Accounting Policies Description of Business salesforce.com, inc. (the Company) is a leading provider of enterprise cloud computing applications. The Company provides a comprehensive customer and collaboration relationship management (CRM) service to businesses of all sizes and industries worldwide and provides a technology platform for customers and developers to build and run applications. The Company offers its services on a subscription basis. Fiscal Year The Companys fiscal year ends on January31. References to fiscal 2010, for example, refer to the fiscal year ending January31, 2010. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Companys consolidated financial statements and notes thereto. Significant estimates and assumptions made by management include the determination of the provision for income taxes, whether an other-than-temporary decline has occurred in the fair value of certain investments in marketable securities, the fair value of stock awards issued, the non-convertible borrowing rate used to calculate the fair value of the liability component of the convertible senior notes and the allocation of the purchase price paid for acquisitions. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company holds a controlling interest in Kabushiki Kaisha salesforce.com (Salesforce Japan), a Japanese joint venture. As of January31, 2010, the Company owned a 72 percent interest in the joint venture. Given the Companys controlling interest in the joint venture, the accounts of the joint venture have been consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for the noncontrolling investors interests in the net assets and operations of the joint venture to the extent of the noncontrolling investors individual investments. Noncontrolling interest of $12.9 million and $10.7 million as of January31, 2010 and January31, 2009, respectively, have been reflected in stockholders equity. The Company now reports the noncontrolling interest in a subsidiary as a component of equity in the consolidated balance sheets and discloses on the face of the consolidated statements of operations the amounts of the consolidated net income attributable to the parent and to the noncontrolling interests. Prior period amounts have been reclassified to reflect the effect of the retrospective adoption in fiscal 2010 of new accounting and presentation guidance for noncontrolling interest, the effect of which is not material to any period presented. Segments The Company operates in one segment. Foreign Currency Translation The functional currency of the Companys major foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial stateme

Balance Sheet Accounts

Balance Sheet Accounts
	12 Months Ended Jan. 31, 2010
Balance Sheet Accounts	2. Balance Sheet Accounts Marketable Securities At January31, 2010, marketable securities consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 329,750 $ 7,889 $ (65 ) $ 337,574 U.S. treasury securities 136,606 170 (116 ) 136,660 Mortgage backed securities 40,187 719 (41 ) 40,865 Collateralized mortgage obligations 36,785 436 (33 ) 37,188 U.S. agency obligations 162,896 571 (12 ) 163,455 $ 706,224 $ 9,785 $ (267 ) $ 715,742 At January31, 2009, marketable securities consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 215,297 $ 1,173 $ (1,330 ) $ 215,140 Money market mutual fund 18,294 18,294 U.S. agency obligations 163,584 1,721 (8 ) 165,297 $ 397,175 $ 2,894 $ (1,338 ) $ 398,731 As of January31, 2010 2009 Recorded as follows (in thousands): Short-term (due in one year or less) $ 230,659 $ 213,769 Long-term (due between one and 3 years) 485,083 184,962 $ 715,742 $ 398,731 As of January31, 2010, the following marketable securities were in an unrealized loss position (in thousands): Less than 12Months 12MonthsorGreater Total FairValue Unrealized Losses FairValue Unrealized Losses FairValue Unrealized Losses Corporate notes and obligations $ 18,980 $ (65 ) $ $ $ 18,980 $ (65 ) Mortgage backed securities 6,328 (41 ) 6,328 (41 ) U.S. treasury securities 71,419 (116 ) 71,419 (116 ) Commercial mortgage obligations 7,319 (33 ) 7,319 (33 ) U.S. agency obligations 10,250 (12 ) 10,250 (12 ) $ 114,296 $ (267 ) $ $ $ 114,296 $ (267 ) The unrealized loss for each of these fixed rate marketable securities ranged from less than $1,000 to $103,000. The Company does not believe any of the unrealized losses represent an other-than-temporary impairment based on its evaluation of available evidence as of January31, 2010. The Company expects to receive the full principal and interest on all of these marketable securities. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): As of January31, 2010 2009 Deferred professional services costs $ 13,420 $ 13,069 Prepaid expenses and other current assets 42,314 20,046 $ 55,734 $ 33,115 Fixed Assets

Stockholders' Equity

Stockholders' Equity
	12 Months Ended Jan. 31, 2010
Stockholders' Equity	3. Stockholders Equity Stock Options Issued to Employees The 1999 Stock Option Plan (the 1999 Plan) provides for the issuance of incentive and non-statutory options to employees and nonemployees of the Company. On April30, 2009, the 1999 Plan expired. Therefore, all remaining shares available expired. The expiration of the 1999 Plan did not affect awards outstanding under the 1999 Plan, which continue to be governed by the terms and conditions of the 1999 Plan. The Company also maintains the 2004 Equity Incentive Plan, 2004 Employee Stock Purchase Plan and the 2004 Outside Directors Stock Plan. These plans, other than the 1999 Plan and the 2004 Outside Directors Stock Plan, provide for annual automatic increases on February1 to the shares reserved for issuance based on the lesser of (i)a specific percentage of the total number of shares outstanding at year end; (ii)a fixed number of shares; or (iii)a lesser number of shares set by the Companys Board of Directors, all as specified in the respective plans. On February1, 2010, 3.5million additional shares were reserved under the 2004 Equity Incentive Plan pursuant to the automatic increase. The 2004 Employee Stock Purchase Plan will not be implemented unless and until the Companys Board of Directors authorizes the commencement of one or more offerings under the plan. No offering periods have been authorized to date. In April 2006, the Companys Board of Directors approved the 2006 Inducement Equity Incentive Plan (the Inducement Plan) that allows for stock option and other equity incentive grants to employees in connection with merger or acquisition activity. In March 2009, the Board of Directors amended the Inducement Plan to increase the share reserve by 300,000 shares to 700,000 shares in total. As of January31, 2010, there were 436,504 shares of common stock available for grant under the Inducement Plan. Prior to February1, 2006, options issued under the Companys stock option plans were generally for periods not to exceed 10 years and were issued at fair value of the shares of common stock on the date of grant as determined by the trading price of such stock on the New York Stock Exchange. After February1, 2006, options issued to employees are for periods not to exceed 5 years. Grants made pursuant to the 2004 Equity Incentive Plan and the Inducement Plan do not provide for the immediate exercise of options. Stock activity is as follows: Shares Available for Grant Options Outstanding Outstanding Stock Options Weighted- Average ExercisePrice Aggregate IntrinsicValue (inthousands) Balance as of January31, 2009 4,191,642 14,917,520 $ 32.51 Increase in shares authorized: 2004 Equity Incentive Plan 3,500,000 Inducement Plan 300,000 Options granted under all plans (3,477,039 ) 3,477,039 61.78 Restricted stock unit activity (623,227 ) Stock grants to board members for board services and advisory board members (50,200 ) Exercised (3,422,626 ) 27.42 1999 Plan shares expired (

Preferred Stock

Preferred Stock
	12 Months Ended Jan. 31, 2010
Preferred Stock	4. Preferred Stock The Companys board of directors has the authority, without further action by stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series. The Companys board of directors may designate the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the Companys common stock, diluting the voting power of its common stock, impairing the liquidation rights of its common stock, or delaying or preventing a change in control. The ability to issue preferred stock could delay or impede a change in control. At January31, 2010 and 2009, no shares of preferred stock were outstanding.

Joint Venture

Joint Venture
	12 Months Ended Jan. 31, 2010
Joint Venture	5. Joint Venture On December7, 2000, the Company entered into a joint venture agreement with SunBridge, Inc., a Japanese corporation, to establish Salesforce Japan. During fiscal 2009, the Company increased its ownership interest in the joint venture, from 65 to 72 percent in exchange for a cash payment of $21.6million. The Company accounted for this investment as a step acquisition. The allocation of the purchase price was completed during fiscal 2009 with $19.2 million recorded as goodwill and the remainder to intangible assets. Provided that the Company owns at least 30 percent of the outstanding voting shares of the joint venture, the Company has the right to appoint three of the six board members of the joint venture, and together with SunBridge, may appoint a fourth director. Based on this and majority ownership the Company consolidates the results of Salesforce Japan. The Board of Directors of the joint venture has authorized option plans to purchase shares in Salesforce Japan. One of the option plans includes antidilution provisions such that the option holders are allowed additional options if the joint venture issues additional stock and the exercise price of their options is reduced if the additional stock is issued for an amount less than such exercise price. Given the Companys controlling interest in the joint venture, the accounts of the joint venture have been consolidated with the accounts of the Company, and a controlling interest has been recorded for the third partys interest in the net assets and operations of the joint venture to the extent of the controlling partners individual investments. Under the terms of the joint venture agreement, the joint venture agreement will terminate if the joint venture becomes a public company or is sold to a third party, or upon the mutual agreement of the parties. In addition, if the Company commits a breach of, or if the Company fails to perform, its material obligations under the joint venture agreement, which are not cured in a timely manner, SunBridge can require the Company to purchase all of its shares in the joint venture. The purchase price for SunBridges shares would be the then fair market value plus a specified premium. In the event that SunBridge commits a breach of, or if it fails to perform, its material obligations under the joint venture agreement, which it does not cure in a timely manner, or if SunBridge enters into bankruptcy proceedings, the Company can require SunBridge to sell to it all of its shares in the joint venture to the Company. The purchase price for SunBridges shares would be the then fair market value less a specified discount. Additionally, if the Company and SunBridge are unable to agree on certain operational matters, either party can require the other to purchase all of its shares of the joint venture at a price equal to the then fair value market value. Fair market value is to be determined by mutual agreement of the parties, or if the parties are unable to agree, by an independent appraiser.

Acquisitions in fiscal year 200

Acquisitions in fiscal year 2009
	12 Months Ended Jan. 31, 2010
Acquisitions in fiscal year 2009	6. Acquisitions in fiscal year 2009 InStranet, Inc. In August 2008, the Company acquired 100 percent of the outstanding stock of InStranet, Inc. (InStranet), a privately-held company with operations in Paris, France, and Chicago, Illinois for $32.3 million in cash including $0.7 million in transaction costs. InStranet offers a knowledge management application for business to consumer call centers. The Company acquired InStranet for its developed technology in order to expand its CRM customer service and support offerings in the customer service and support market. The Company accounted for this as a business combination. The valuation of acquired assets and liabilities is as follows (in thousands): Net tangible assets $ 3,863 Developed technology 8,610 Customer relationships 5,950 Goodwill 19,976 Deferred income taxes (6,122 ) Total purchase price consideration $ 32,277 Customer relationships and developed technologies have a useful life of 3 years. The goodwill balance is not deductible for tax purposes. This asset is attributed to the premium paid for an established knowledge management application. In performing the purchase price allocation, the Company considered, among other factors, its intention for future use of the acquired assets, analysis of historical financial performance and estimates of future performance of InStranets knowledge management application. The fair value of intangible assets was primarily based on the income approach. Salesforce Japan In the third quarter of fiscal 2009, the Company acquired shares held by minority shareholders of its joint venture salesforce Japan and increased its ownership to 72 percent for $21.6 million in cash. The Company accounted for this purchase as a step-acquisition. The valuation of acquired assets and liabilities is as follows (in thousands): Customer relationships $ 1,919 Territory rights 2,196 Goodwill 16,340 Deferred income taxes (1,679 ) Noncontrolling interest adjustment 2,848 Total purchase price consideration $ 21,624 Customer relationships have a useful life of 3 years and territory rights have a useful life of 7 years. The goodwill balance is not deductible for tax purposes. This asset is attributed to the premium paid for the territory rights and customer relationships. Intangible assets acquired resulting from the acquisitions described above as of January31, 2010 are as follows (in thousands): Gross FairValue Accumulated Amortization Net BookValue Weighted AverageRemaining UsefulLife Developed technology $ 8,610 $ (4,185 ) $ 4,425 1.5years Territory rights 2,196 (444 ) 1,752 5.5 years Customer relationships 7,869 (3,881 ) 3,988 1.4 years $ 18,675 $ (8,510 ) $ 10,165 The expected future amortization expense for these intangible assets for each of the fiscal years ended thereafter is as follows (in thousands): Fi

Income Taxes

Income Taxes
	12 Months Ended Jan. 31, 2010
Income Taxes	7. Income Taxes The domestic and foreign components of income before provision (benefit) for income taxes and noncontrolling interest consisted of the following (in thousands): Fiscal Year Ended January31, 2010 2009 2008 Domestic $ 125,095 $ 83,590 $ 51,911 Foreign 17,286 2,002 (5,698 ) $ 142,381 $ 85,592 $ 46,213 The provision for income taxes consisted of the following (in thousands): Fiscal Year Ended January31, 2010 2009 2008 Current: Federal $ 43,313 $ 55,228 $ 31,245 State 8,788 7,701 4,515 Foreign 12,179 7,699 6,502 Total 64,280 70,628 42,262 Deferred: Federal (4,506 ) (26,979 ) (13,800 ) State (979 ) (5,372 ) (3,192 ) Foreign (1,106 ) (720 ) (1,885 ) Total (6,591 ) (33,071 ) (18,877 ) Provision for income taxes $ 57,689 $ 37,557 $ 23,385 A reconciliation of income taxes at the statutory federal income tax rate to the provision for income taxes included in the accompanying consolidated statements of operations is as follows (in thousands): Fiscal Year Ended January31, 2010 2009 2008 U.S. federal taxes at statutory rate $ 49,833 $ 29,957 $ 16,175 State, net of the federal benefit 8,645 4,685 2,916 Foreign losses providing no benefit 3,091 4,547 Foreign taxes in excess of the U.S. statutory rate 6,748 3,537 2,326 Tax credits (9,845 ) (5,222 ) (3,817 ) Non-deductible expenses 755 901 1,346 Impact of California tax law change 2,747 Taxnoncontrolling interest (1,390 ) Other, net 196 608 (108 ) $ 57,689 $ 37,557 $ 23,385 Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Companys deferred tax assets and liabilities were as follows (in thousands): As of January31, 2010 2009 Deferred tax assets: Net operating loss carryforwards $ 5,284 $ 6,212 Deferred stock compensation 30,451 26,288 Tax credits 20,836 14,004 Deferred rent expense 7,360 6,244 Accrued liabilities 22,006 19,304 Deferred revenue 10,802 11,372 Other 6,816 8,208 Total deferred tax assets 103,555 91,632 Less valuation allowance (1,540 ) (2,344 ) Net deferred tax assets 102,015 89,288 Deferred tax liabilities: Def

Commitments

Commitments
	12 Months Ended Jan. 31, 2010
Commitments	8. Commitments Letters of Credit As of January31, 2010, the Company had a total of $10.6 million in letters of credit outstanding substantially in favor of its landlords for office space in San Francisco, California, New York City, Singapore, Sweden and Switzerland. These letters of credit renew annually and mature at various dates through October 2018. Leases The Company leases office space and equipment under noncancelable operating and capital leases with various expiration dates. As of January31, 2010, the future minimum lease payments under noncancelable operating and capital leases are as follows (in thousands): Capital Leases Operating Leases Fiscal Period: Fiscal 2011 $ 7,901 $ 81,941 Fiscal 2012 7,550 58,299 Fiscal 2013 1,074 44,103 Fiscal 2014 31,820 Fiscal 2015 13,360 Thereafter 50,686 Total minimum lease payments $ 16,525 $ 280,209 Less: amount representing interest (942 ) Present value of capital lease obligation $ 15,583 The terms of the lease agreements provide for rental payments on a graduated basis. The Company recognizes rent expense on the straight-line basis over the lease period and has accrued for rent expense incurred but not paid. Of the total operating lease commitment balance of $280.2 million, $229.2 million is related to facilities space. The remaining $51.0 million commitment is related to computer equipment and other leases. The Companys agreements for the facilities and certain services provide the Company with the option to renew. The Companys future contractual obligations would change if the Company exercised these options. Rent expense for fiscal 2010, 2009 and 2008 was $47.3million, $36.0million and $23.0million, respectively.

Legal Proceedings

Legal Proceedings
	12 Months Ended Jan. 31, 2010
Legal Proceedings	9. Legal Proceedings The Company is involved in various legal proceedings and receives claims from time to time, arising from the normal course of business activities. In the Companys opinion, resolution of these matters is not expected to have a material adverse impact on its consolidated results of operations, cash flows or its financial position. During fiscal 2009, the Company received a communication from a large technology company alleging that the Company infringed some of its patents. The Company continues to analyze the potential merits of these claims, the potential defenses to such claims and potential counter claims, and the possibility of a license agreement as an alternative to litigation. The Company is currently in discussions with this company and no litigation has been filed to date. However, there can be no assurance that this claim will not lead to litigation in the future. The resolution of this claim is not expected to have a material adverse effect on the Companys financial condition, but it could be material to the net income or cash flows or both of a particular quarter. The Company has been, and may in the future be, sued by third parties for alleged infringement of their proprietary rights. The Companys technologies may be subject to injunction if they are held to infringe the rights of a third party. The outcome of any litigation is inherently uncertain. Any intellectual property claims, including the one referenced above, with or without merit, could be time-consuming and expensive to resolve, could divert management attention from executing the Companys business plan and could require the Company to change the Companys technology, change the Companys business practices and/or pay monetary damages or enter into short- or long-term royalty or licensing agreements which may not be available in the future at the same terms or at all. In addition, many of the Companys subscription agreements require the Company to indemnify the Companys customers for third-party intellectual property infringement claims, which could increase the cost to the Company of an adverse ruling on such a claim. Any adverse determination related to intellectual property claims or litigation could prevent the Company from offering its service to others, could be material to the Companys net income or cash flows or both of a particular quarter or could otherwise adversely affect the Companys operating results.

Employee Benefit Plan

Employee Benefit Plan
	12 Months Ended Jan. 31, 2010
Employee Benefit Plan	10. Employee Benefit Plan The Company has a 401(k) plan covering all eligible employees in the United States. Since January1, 2006, the Company has been contributing to the plan. Total Company contributions during fiscal 2010, 2009 and 2008, were $8.5 million, $6.7 million and $3.9 million, respectively.

Related-Party Transactions

Related-Party Transactions
	12 Months Ended Jan. 31, 2010
Related-Party Transactions	11. Related-Party Transactions In January 1999, the salesforce.com/foundation, also referred to as the Foundation, a non-profit public charity, was chartered to build philanthropic programs that are focused on youth and technology. The Companys chairman is the chairman of the Foundation. He, one of the Companys employees and one of the Companys board members hold three of the Foundations seven board seats. The Company is not the primary beneficiary of the Foundations activities, and accordingly, the Company does not consolidate the Foundations statement of activities with its financial results. Since the Foundations inception, the Company has provided at no charge certain resources to Foundation employees such as office space. The value of these items totals approximately $35,000 per quarter during fiscal year 2010. In addition to the resource sharing with the Foundation, the Company issued the Foundation warrants in August 2002 to purchase 500,000 shares of common stock which were all exercised in prior years. As of January31, 2010, the Foundation held 142,500 shares of salesforce.com common stock. Additionally, the Company has donated subscriptions to the Companys service to other qualified non-profit organizations. The fair value of these donated subscriptions were in excess of $3.7 million per month during fiscal 2010. The Company currently plans to continue providing free subscriptions to qualified non-profit organizations through its relationship with the Foundation.

Selected Quarterly Financial Da

Selected Quarterly Financial Data (Unaudited)
	12 Months Ended Jan. 31, 2010
Selected Quarterly Financial Data (Unaudited)	12. Selected Quarterly Financial Data (Unaudited) Selected summarized quarterly financial information for fiscal 2010 and 2009 is as follows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Fiscal Year (in thousands, except per share data) Fiscal 2010 Revenues $ 304,924 $ 316,061 $ 330,549 $ 354,049 $ 1,305,583 Gross profit 243,124 253,565 264,979 285,990 1,047,658 Income from operations 30,123 29,489 30,141 25,519 115,272 Net income attributable to salesforce.com 18,436 21,198 20,691 20,394 80,719 Basic net income per share attributable to salesforce.com common shareholders $ 0.15 $ 0.17 $ 0.17 $ 0.16 $ 0.65 Diluted net income per share attributable to salesforce.com common shareholders $ 0.15 $ 0.17 $ 0.16 $ 0.16 $ 0.63 Fiscal 2009 Revenues $ 247,622 $ 263,077 $ 276,487 $ 289,583 $ 1,076,769 Gross profit 196,324 208,986 220,139 230,849 856,298 Income from operations 15,421 16,098 16,133 16,090 63,742 Net income attributable to salesforce.com 9,555 9,996 10,124 13,753 43,428 Basic net income per share attributable to salesforce.com common shareholders $ 0.08 $ 0.08 $ 0.08 $ 0.11 $ 0.36 Diluted net income per share attributable to salesforce.com common shareholders $ 0.08 $ 0.08 $ 0.08 $ 0.11 $ 0.35

Schedule II Valuation and Quali

Schedule II Valuation and Qualifying Accounts
	12 Months Ended Jan. 31, 2010
Schedule II Valuation and Qualifying Accounts	salesforce.com, inc. Schedule II Valuation and Qualifying Accounts Description Balance at Beginning of Year Additions Deductions Write-offs Balance at End of Year Fiscal year ended January31, 2010 Allowance for doubtful accounts $ 1,527,000 $ 2,787,000 $ 3,264,000 $ 1,050,000 Fiscal year ended January31, 2009 Allowance for doubtful accounts $ 906,000 $ 4,390,000 $ 3,769,000 $ 1,527,000 Fiscal year ended January31, 2008 Allowance for doubtful accounts $ 1,223,000 $ 2,299,000 $ 2,616,000 $ 906,000

Document Information

Document Information
	12 Months Ended Jan. 31, 2010
Document Type	10-K
Amendment Flag	false
Document Period End Date	2010-01-31

Entity Information

Entity Information (USD $)
	12 Months Ended Jan. 31, 2010	Jul. 31, 2009
Trading Symbol	CRM
Entity Registrant Name	SALESFORCE COM INC
Entity Central Index Key	0001108524
Current Fiscal Year End Date	--01-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	127,200,000
Entity Public Float		$6,000,000,000