May
14
Written by:
Cornerstone Administrator
5/14/2008 8:41 AM
salesforce.com has decided to play dirty by publishing factual but incomplete information about Microsoft’s CRM R&D budgets. They state that Microsoft’s total R&D budget for Xbox is greater than that of CRM. And their findings are true. What they forgot to state in the numbers is the total market share of each respective product and salesforce.com’s own R&D budget.
The video game console business is a $30 billion dollar a year business. CRM market in 2006 was $12.6 Billion, of which approximately 37% will be from licenses. So the entire CRM software market will split about 4.5B in revenue. 30 billion is a much bigger market than 4.6 billion. It makes sense to spend more money on a larger market than a smaller one.
What does salesforce.com spend on their R&D? saleforce.com spent about 9.8 million in 2005, 7.0 million in 2004 and 4.6 million in 2003 (saleforce.com Annual Report).
What does Microsoft spend? Years 2003, 2004, and 2005, research and development expense was $6.60 billion, $7.78 billion, and $6.18 billion respectively. Those amounts represented 20.5%, 21.1%, and 15.5%, respectively, of revenue in each of those years (Microsoft 10K).