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SAP has a new tormentor: Salesforce.com CEO Marc Benioff, who's taken over from Oracle's Larry Ellison as chief abuser while announcing financial results.

Chief executive Mark Benioff hitched SAP to the crossbeam and began punching while announcing a quarter that saw record customer numbers and revenue.

Benioff accused SAP of delivering rhetoric rather than service with its planned A1S offering and of being unable to rival Salesforce.com.

It was spirited talk. And no wonder. With the competitive clouds gathering, Salesforce.com's latest second-quarter revenues grew below those of the company's previous quarters.

Salesforce.com reported $176m revenue for the three months to 31 July, an increase of 49 per cent over last year's second quarter. While revenue was Salesforce.com's best ever number, the growth rate was lower than last year's second quarter - 64 per cent. Revenue also grew less than in any of the quarters in between, leading to a flattening of the company's revenue growth curve.

It was significant that one of Salesforce.com's largest deals was not in its core customer relationship management (CRM) business but in Platform Edition rolling out to 35,000 users at one customer.

Launched in April, Platform Edition lets users install and customize downloaded applications from Salesforce.com's AppExchange while dispensing with the familiar hosted CRM elements of its service. Platform Edition is part of a new suite of services Salesforce.com needs to ensure continued revenue growth.

On the plus side for the past quarter, Salesforce.com reversed its year-ago loss of $145,000, with a profit of $3.7m. Earnings per diluted share improved three cents to $0.03.

Salesforce.com also announced 800,000 subscribers, an increase of 3,000, with customer numbers now at 35,300, an addition of 10,500 in the last 12 months.

On the back of this, the firm raised its guidance for the year - now expected between $727m and $737m, with EPS coming in between $0.08 and $0.10.

Anticipating questions from analysts on the potential threat posed to his business by SAP, Benioff listed win after customer win while lamenting the inability of companies like SAP to deliver the kind of on-demand service he provides.

DuPont, IMS Health, Mercedes-Benz, and Corning had joined "a long list of SAP accounts that are now using Salesforce.com." Others include Motorola, Symbol Technologies, Air Products, Ashland, Shell Energy, and Chevron.

SAP has been both worrying and tantalizing analysts over the potential for its planed A1S service to hurt Salesforce.com in the mid market. Despite much talk, though, A1S still lives in a slideware world with no prospect of immediate launch.

Also on analysts' minds was Microsoft, which plans to enter the on-demand arena with Dynamics Live CRM later this year - two years after it initially talked of the service.

"Microsoft [this year]... returned to its summer pastime, announcing its intention to one day deliver a centralized multi-tenant, on-demand service. But after a flurry of announcements and PR hype, there are no customers of this mythical service and no URL where you can try out the service for free," Benioff said.

Claiming Microsoft customers had picked Salesforce.com rather than Microsoft CRM during the quarter, Benioff finished: "Microsoft's strategy of an inferior product at an inferior price promises to do for on-demand what Zune has done for music players." ®

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