Notes from salesforce.com, inc. 2003 S-1 IPO Filing

The largest and most successful SaaS/cloud company, salesforce.com, inc. (yes, that’s the proper spelling of the company), filed their S-1 for an IPO on December 18, 2003. With the annual Dreamforce conference next week, and the fact that their market cap is now $21.5 billion (NASDAQ: CRM), a little trip down memory lane to see how things were nine years ago is on tap.

Here are notes from the salesforce.com, inc. 2003 S-1 IPO filing:

• Signed 8,000 paying subscribers from February 2000 to October 2003 and 110,000 seats (pg. 1) – SFDC now has over 110,000 paying subscribers and many millions of seats
• May 2003 IDC reports project SaaS/cloud-based apps to be $2.6 billion in 2007 (pg. 1) – SFDC alone is going to be larger than $2.6 billion in revenue in 2013
• Incorporated in Delaware in February 1999 and released first product in February 2000 (pg. 2)
• Revenues (pg. 4)
  2001 – $5.4 million
  2002 – $22.2 million
  2003 – $50.9 million
  Nine months ended Oct 31, 2003 – $65.9 million
• Losses (pg. 4)
  2001 – $33.6 million
  2002 – $30.1 million
  2003 – $9.3 million
• Accumulated deficit – $71 million (pg. 4)
• Small business customers have shorter contracts and higher rate of attrition (pg. 9)
• Fiscal 2003 sales to Europe and Asia accounted for 14 and 17 percent of revenue, respectively (pg. 11)
• Database software comes from Oracle Corporation (pg. 13)
• Research and development expenses (pg. 23)
  2001  – $3.3 million
  2002 – $5.3 million
  2003 – $4.6 million
• In December 2001 abandoned excess office space and took a $7.7 million charge (pg. 26)
• Owned 64% of a Japanese joint venture (pg. 27)
• Raised $61.1 million from investors in exchange for preferred stock (pg. 38)
• $3.5 million letter of credit for office rent in 2001 (pg. 39)
• 2004 office lease expense of $5.4 million (pg. 39)
• 10,000 free Personal Edition users activated (pg. 47)
• Application is written in Java and Oracle PL/SQL (pg. 48)
• A small number of customers have service level agreements (pg. 50)
• Field sales offices in more than 20 cities (pg. 51)
• 412 employees as of Oct 31, 2003 (pg. 53)
• Equity owned before IPO (pg. 72)
  Marc Benioff – 31.6%
  Halsey Minor – 10.2%
  Parker Harris – 2.7%
  Attractor Funds – 6.0%

Similar to the Workday IPO filing in the summer of 2012, this salesforce.com IPO filing from 2003 is highly unusual in that it’s a SaaS/cloud company that raised an impressive amount of capital and reached IPO-level recurring revenue in a short amount of time. Salesforce.com sets the standard for SaaS/cloud software companies and shows no signs of slowing down.

What else? What are some other thoughts on the salesforce.com 2003 S-1 IPO filing?