How Salesforce’s Subscription Segment Performed in 2Q17

Salesforce’s subscription and support revenue grew 24%

Previously in this series, we discussed Salesforce’s (CRM) fiscal 2Q17 earnings. As expected, the company’s results continued to exceed analysts’ expectations. Salesforce generates the majority of its revenues from the subscription and support segment, which saw revenues of $1.9 billion in 2Q17. Let’s take a look at the offerings that contributed the most towards the 24% YoY (year-over-year) growth in subscription and support revenues.
How Salesforce’s Subscription Segment Performed in 2Q17

App Cloud grew the most among Salesforce cloud offerings

Sales Cloud, the top contributor in the segment, earned 40% of Salesforce’s subscription and support revenue in fiscal 2Q17. Sales Cloud is an offering that enables companies to store sales data, monitor sales progress, gain sales insights, and predict sales opportunities. The product grew by 13% to $754.9 million.

Service Cloud enables companies to deliver customized customer service and support. It grew by 29% to $540.1 million. App Cloud enables companies and developers to create apps. It grew by 43% to $353.4 million. Among Salesforce’s cloud offerings, App Cloud continued to grow the most in fiscal 2Q17.

Salesforce’s Marketing Cloud grew by 28% to $202.4 million in fiscal 2Q17. Though Adobe (ADBE) leads the marketing cloud space, competition has increased in this space due to the huge growth expected in the marketing cloud space. Apart from Salesforce, Oracle (ORCL) and IBM (IBM) are active in this space. Later in the series, we’ll discuss the company’s initiatives to increase its competitiveness in the marketing cloud space.