- Salesforce says its partnership with AWS is helping accelerate its growth in overseas markets.
- Salesforce still gets the bulk of its revenue from the North America market, with European and Asian markets accounting for less than 30% of its total sales.
- It continues to make significant investments in international markets, as more than 40% of new hires have been outside the US.
Salesforce has struck a number of partnership deals with Amazon Web Services over the past year, suddenly becoming a close ally of Amazon’s cloud arm.
That relationship is starting to bear fruit, Salesforce says, as it’s helping solve one glaring weakness in the cloud software maker’s business: overseas sales.
Salesforce said during its earnings call on Tuesday that its partnership with AWS has helped open up new opportunities in countries like Canada and Australia. Salesforce started running its software in AWS data centers in Canada last month, and is planning to do so in Australia later this year.
The offering is aimed at targeting companies that may feel uncomfortable storing their data in data centers outside their region. For example, a lot of government agencies and financial services firms are still sensitive about using data centers that are not located in their own country.
Salesforce has previously run its software in data centers it owns. But last year, it announced it would use AWS to run some of its software after committing to spend $400 million over four years on Amazon’s cloud platform, which has a wider footprint in more geographic regions.
Salesforce said it signed up companies like Nomura, Queensland Urban Utilities, and Australia Post last quarter.
“With AWS, that relationship is strong and that just gives us a lot of flexibility as we continue to focus and expand internationally,” Salesforce president and COO Keith Block said during the call.
Growing international sales is important for Salesforce. The company still gets over 70% of its sales from the North American region — with the US market accounting for over 90% of the share — and the growth rates of overseas sales have been stagnant, hovering at around 30% annually.
In the 2nd quarter, Europe accounted for 18 percent of total revenue, while the Asia Pacific market accounted for 10 percent of the total. That’s a small share compared to Microsoft or Oracle who drive almost half of their revenue from overseas markets, according to FactSet.
Block said Salesforce will continue to make “significant investments” in overseas markets as it presents a lot of new upside. In fact, more than 40 percent of all new hires have come from outside of the US, he said.
“Our international growth continues to represent a huge opportunity for Salesforce,” Block said.
Article written by Eugene Kim