David Havlek - Investor Relations Marc Benioff - Chairman of the Board, Chief Executive Officer Steve Cakebread - Principal Financial Officer, Executive Vice President

Laura Lederman - William Blair Thomas Ernst - Deutsche Bank Jason Maynard - Credit Suisse Kash Rangan - Merrill Lynch Charlie di Bona - Sanford Bernstein Heather Bellini - UBS Sasa Zorovic - Goldman Sachs Peter Goldmacher - Cowen & Company Brent Thill - Citigroup Nathan Schneiderman - Roth Capital Partners Brendan Barnicle - Pacific Crest Securities Peter Cooper - Morgan Stanley Dan Cummins - Banc of America Robert Schwartz - Jefferies & Company Michael Huang - ThinkEquity Trip Chowdhry - Global Equity Research Philip Rowe - Prudential

Good afternoon. My name is Marvin and I will be your conference operator today. At this time, I would like to welcome everyone to the Q108 financial results conference call. (Operator Instructions) I would now like to turn the call over to Mr. David Havlek, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Marvin and good afternoon, everybody. I would like to welcome you to salesforce.com's first quarter fiscal year 2008 financial results conference call. Joining me as always today are Chairman and CEO, Marc Benioff and CFO, Steve Cakebread. Before we begin, I’d like to emphasize that all of our financial commentary today will once again be in GAAP terms. Please consider this as you evaluate our results, particularly against First Call consensus estimates, which currently exclude certain recurring items such as stock-based compensation and purchased intangibles. To eliminate confusion and given that we report only in GAAP terms, we will be asking the sell-side community to submit their primary estimates to Thompson in GAAP terms going forward. Steve will address this topic in more detail at the end of his remarks today. Full disclosure of our Q1 financial performance can be found in our Q1 results press release issued earlier today and also in our Form 8-K filed with the SEC. Additional financial information beyond what is provided in the press release may also be found on our website. Today’s call is being webcast and a replay will be available shortly following the conclusion of the call through May 25th. To access the press release, the financial detail or the webcast replay, please consult our investor relations website at www.salesforce.com/investor. The primary purpose of today’s call is to provide you with information regarding our first quarter fiscal year 2008 performance. However, some of our discussion responses to your questions will contain forward-looking statements. These statements may include projected financial milestones, anticipated growth goals and results, subscriber, financial and operating metrics, future operating leverage, profitability and cash generation, business strategy, the timing and functionality of future services, product or platform releases and their capabilities, demand for on-demand services generally or the Apex platform or language, the AppExchange directory or other products specifically, market opportunities, expected implementation of our services by certain customers, data center hardware or software initiatives, future system and service availability, the decline of the enterprise application market or other business-related topics. These statements are subject to risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize or should our assumptions prove incorrect, actual company results could differ materially from these forward-looking statements. These risks, uncertainties and assumptions, as well as other information on potential factors that could affect our financial results, are included in our reports filed with the SEC, including our Form 10-K for the fiscal year ended January 31, 2007. The 10-K is also available on our investor relations website. Also, please be reminded that any unreleased services or features referenced in today’s discussion or other public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decision based on features that are currently available. Finally, because the volume of questions in our Q&A following our prepared remarks tends to be quite high, we ask that you limit your questions today to one. We want to address as many analysts as possible, so we ask that if you have any additional questions, you get back in the queue in respect for other analysts. Thank you in advance for your cooperation. With that, let me turn the call over to Marc.

Thanks, David. I am glad to have the opportunity today to talk about our incredible start to our fiscal 2008. In fiscal 2007, we redefined the size and scope of our deployments and as we begin the new fiscal year, we are seeing large deployments become more common across the globe. Customers around the world are benefiting from our unique combination of on-demand killer apps, breakthrough on-demand platform and intensely passionate community. The results that we are delighted to detail for you today are proof that the marketplace is eager for on-demand solutions and we believe they will share our enthusiasm for the new ones that are going to be introduced in the months to come. Revenue for the first quarter topped $162 million, up 55% year over year and roughly $5 million higher than the high-end of the outlook we provided on last quarter’s call. That translates into a nearly $650 million annual revenue run-rate and another strong indication of our market momentum. It took us six years to achieve our first $175 million revenue year in fiscal 2005 and two years later, our Q1 approached that amount in a single quarter. Our goal of achieving $1 billion in annual revenue run-rate is now clearly in sight, a milestone we expect to achieve some time next calendar year. This is something that we have been focused on now to become the first $1 billion on-demand company. Our dream is coming to us. At these levels, we believe we are the fastest growing software company of our size. Earnings per share for the quarter was $0.01, at the high-end of the range of our guidance and operating cash flow was an outstanding $37 million, more than double any other Q1 in our history. Our ability to generate cash is an inherent strength of our model and the long-term trend of our cash creation is a key measure of our success. We ended the quarter with approximately 32,300 customers, a sequential increase of 2,500, up 42% from a year ago. The clear centerpiece of the quarter was our largest deal outside of the United States to date, the Japan Post. The Japan Post is both one of the largest banks and Japan’s traditional mail carrier, with over 25,000 locations and 400,000 employees. Currently a part of the government, it is scheduled to be privatized later this year. 5,000 subscribers at Japan Post will use Salesforce applications and Salesforce platform edition to help sell financial products to its vast customer base. We look forward to being an integral part of Japan Post’s success as it makes this closely followed transition. Our relationship with the Japan Post is a unique opportunity to make a strategic customer wildly successful. It is also a clear signal to the entire Japanese IT market, the second-largest outside of the United States, that Salesforce is the right choice to help corporations manage and share business information on-demand. Adding to our momentum in Japan was a new win with Canon Marketing and a large add-on with insurance leader, Sonpo. In fact, the worldwide wave of success was a major theme for our quarter. In Europe, global financial leader, Zurich Financial Services and [Placenis] Medical Care subscribed to our services, and KONE added to their already large implementation. In Latin America, Sabre Travel came on board as our largest customer south of the border. Our U.S. business showed great momentum. Publishing giant Houghton Mifflin joined as a new customer with over 1,000 subscribers, and our leader in the technology sector gained steam with new wins at software giant Computer Associates for 4,000 new subscribers, and the U.S.-based [Areco] for more than 2,000. Other major companies joining our customer rolls including Health Net and Flagstar Bank, online travel technology leader Get There. In online travel, we now have almost every major player, including Sabre, Expedia, Carlson, Get There and Galileo, who was formerly Seybold’s largest on-demand CRM customer and now ours. Add-on business was a significant contributor to Q1 as well with ADT, Ford, Motor Credit, Morgan Stanley, Citizen’s Bank, and Cymbal Technologies, now a part of Motorola, all adding to their accounts. And our strong portfolio of products is inspiring our customers to extend their CRM success to service and support as well. QualComm, KBC Autolease, Relay Health all added our service and support application to their existing implementations, and Business Objects and Bell Canada chose us to help manage their partner networks with PRM. We innovated at a blistering pace in the first quarter, introducing both new products for our teams to start selling now, as well as new applications that will redefine the scope and shape of our company. And the driving forces behind it all, the flexibility of our platform and creativity of our dedicated community, the experts clearly agree -- Salesforce service and support received the coveted visionary designation from Gartner in their magic quadrant report on customer service and support, and Forester’s SFA wave report call our solution a leader. Here’s a run-down of the new products we announced in just the first quarter: Salesforce platform edition is allowing customers to enjoy the benefits of our platform independent of CRM applications. We plan to boost our success in financial services with Salesforce Wealth Management edition, the first of what we expect to be many customized editions of our applications for that industry. We built on the strength of our most popular new products by introducing Salesforce PRM 2.0, one of the centerpieces of our spring ’07 release. Salesforce customer portal, which will allow our customers to manage and share information with their customers. Salesforce Content, our new document and content management application based on our acquisition of Koral. Finally, we think that Campaign Force, Salesforce's political campaign edition, will end the debate about how political organizations can customize and deploy technology quickly for strategic advantage. Spring ’07 is also a great example of our community-driven innovation model at work. Our Idea Exchange is our new site where customers can suggest and vote on ideas for new features and products. The community now can work directly and openly with our product managers to work out the specifics of new features. To date, the community has almost 6,000 registered members who have voted more 58,000 times on 3,300 ideas. Some of the best ideas for spring ’07 were born on the Idea Exchange, such as customized search and time-based workflow, and as we prepare our next release for this summer, Idea Exchange continues to be a source of inspiration. This conversation and collaboration with our community assures that all of our new features and products are as relevant and easy to use as they are innovative. And let this be your invitation to see that community in action. On Monday, this Monday, we will hold a special Salesforce Developer Conference at the Santa Clara Marriott in Silicon Valley. We will make some key announcements about our new platform technologies and more important, provide in-depth seminars on achieving success with our Salesforce Apex code. For those of you in the investment community who are looking for the next Salesforce.com, chances are good you will run into them Monday at one of our workshops. We are also about to kick off our drive towards our on-demand community event of the year, Dream Force, so please mark your calendars now for our largest conference ever from September 16th to 19th in San Francisco. The third pillar of our company, our Salesforce Apex platform, gained momentum on every technology front: technological sophistication, community momentum, partner success and third-party validation. It’s clear that in technology these days, there’s no hotter story than software service or on-demand, and our platform is leading the industry. The buzz is clearly building around our Salesforce Apex code, which we plan to release later this year and we will review in detail at Monday’s conference. In the first quarter, we had our biggest quarter ever for new developer registrations and we are now closing in on 40,000 members in the most innovative community of coders and software service. With Apex, our customers and developers will be able to run their code on our servers. Our partners are seizing this amazing opportunity that our platform represents. Our Apex, our AppExchange incubators sold out in the first quarter and our initial group of 32 innovative companies is now building the next generation of on-demand success stories in our new San Mateo headquarters. Many in the news media have wondered whether we performed an exorcism at the former Siebel headquarters building, but the truth is that nothing banishes the spirit of a dead technology like the spirit of innovation, and more is on the way, not only in San Mateo but in new locations around the world. The community is responding to our innovation of innovation, not infrastructure and it is our intention to give global community developers the technology platform, expertise and business services that they need to succeed. I am also proud that our internal development team has been energized by the opportunity to create any application with Salesforce Apex code. Our Salesforce Labs Project, in which developers build apps on their own time, has already yielded some amazing results. Our team has created 35 new apps in Q1 that are providing very popular with our customers. These new apps have been installed over 6,000 times in the first quarter and include everything from a case detachifier to mash-ups with YouTube. This level of creativity is an early indicator to us of the flood of innovation we can expect when Salesforce Apex code is widely available later this year. The AppExchange is where our customers and partners both experience the benefits of our platform and we are pleased with the continued strong momentum there. Customers have not test driven applications more than 225,000 times and installed more than 26,000 applications. Keeping with our global theme, AppExchange is a worldwide hit. More than 10,000 customers in 68 countries have installed at least one application from the AppExchange, and we are on the verge of posting our 600th application on the AppExchange just 16 months after it went live. The VC community is taking notice of this momentum and they are financing new start-ups based on this model. To date, $225 million of venture funding has been raised by AppExchange companies. In Q1, the community really took notice of all this innovation. Forbes named AppExchange as one of the top 10 disruptors of 2006 and in the Wired 40, we are ranked number seven on that magazine’s ranking of masters in innovation and technology. And just last month we won another Codie, our industry’s equivalent of the Oscars -- this time, best new platform. Finally, E-Week has ranked us number seven in influence in the IT community on their list of the top 100 innovators -- pretty incredible for Salesforce.com. Even our customers are winning awards for their innovation on our platform. The maker to the world’s favorite interactive entertainment, Electronic Arts, was recognized for its use of Salesforce.com’s recruiting application at the ERE Excellent Awards. Electronic Arts prides itself on hiring the best to continue this tradition of leadership and we are proud they used Salesforce.com’s recruiting application to help fuel their success. We emphasize these awards not only because we are grateful for the third-party validation but also because we feel they raise a critical point about competition. We are delivering today to more customers every day through a robust, on-demand applications it takes to make businesses of all sizes succeed. The large legacy vendors like Microsoft, SAP and Oracle continue to poke around the edges of software service, grudgingly acknowledging the appeal of this powerful new model for delivering innovational success. Steve Ballmer said last week that Salesforce.com has a high value and Hasso Plattner said we got it right at the Software 2000 conference a couple of days ago. We are changing the game in the software industry and no one is better trained, ready and prepared to succeed than our 2200 plus employees in the new software service market. Turning now to performance, our world-class data centers continue to run at very impressive levels. In the first quarter, we served a record 5.4 billion transactions, more than double the level of a year ago. Just last week, we logged our first 90 million transaction day and our speeds are just over a quarter of a second each. Our platform is setting the standard for our on-demand integration with calls to our API accounting for approximately 53% of transactions in the first quarter. Simply put, we are delivering more transactions to more users at speeds and deeper levels of integration, as evidenced by these API transactions. And our high levels of reliability and availability are on view around the clock at trust.salesforce.com. I am proud that our thousands of employees have been able to deliver these profound levels of customer and partner success and technology innovation, while remaining dedicated to our unique model of integrated corporate philanthropy. These accomplishments were recognized in the first quarter by the Committee to Encourage Corporate Philanthropy, which presented us with the Excellence Award for 2007. One of the great missions of our foundation is encouraging the non-profit community to put our platform and applications to work. We are proud to say that the United Nations Food Program has now totally standardized on Salesforce. It is one of more than 1,900 non-profits who are currently using our service and since we donate our services to nearly all these non-profits, only a few are counted among our roughly 32,300 net paying customers. In closing, I am pleased with the momentum that we are showing in existing applications like CRM, service and support, and PRM. I have never been more optimistic about the market potential for these core applications. Our community continues to prove that every time we give them another chance to connect with us and share ideas, from success tours to dream force idea exchange, our products get better and our shared mission of success gets stronger, and our platform is redefining on-demand development and partner success for more ISVs every day. Our applications, platform and community form the core of this company and are poised to deliver unprecedented innovation, and we hope exciting growth in the quarters to come. Now I would like to turn it over to Steve Cakebread for a detailed look at our financials.

Thanks, Marc and welcome, everyone. Q1 was a great start to our fiscal ’08. The strong customer success that Marc outlined translated into another outstanding financial quarter. Our first quarter revenue performance was $162.4 million, up 55% from the year-ago quarter and up 13% from Q4. This performance was well above the outlook we provided at the beginning of the quarter, primarily the result of strong, early quarter bookings that materialized into revenue a bit more quickly than we expected. Geographically, revenue of $124 million in the Americas grew 50% from last year and 12% from Q4. In Europe, revenues rose even more rapidly at 71% year on year and 13% from the prior quarter to finish the quarter at $26 million. As Marc noted, Asia-Pacific had an outstanding quarter, with revenue of roughly $12 million, an increase of 14% from Q4 and 85% from a year ago. As strong as our international growth has been, revenue growth in the Americas has essentially kept pace. Our international revenue mix increased two points year over year to finish the quarter at 23% of total revenues. With global adoption of on-demand services on the rise, international markets remain a huge opportunity and over time, we see no reason why our international mix would not approach the 50% level that is so common among major technology companies today. The upside in revenue was driven by another strong subscription support quarter. Subscription and support revenue of $147.7 million rose 12% sequentially and 57% year over year. This represents 91% of the total company revenue. In addition to strong new business bookings, our subscription business continues to benefit from remarkably low attrition. For the quarter, attrition remained below 1% of net paying subscribers per month and reflects our continued focus on customer success. Professional services business, primarily consulting and training, also delivered a strong quarter with revenues of $14.7 million, an increase of 21% from Q4 and 44% from last year. Company gross margin performance continues to be remarkably steady. In fact, if you look at the past eight quarters, our total company GAAP gross margins have consistently stayed in the range of 75% to 77%. In Q1, GAAP gross margin was in the middle of that range, finishing at 76%. That is down a bit from Q4 but unchanged from our full fiscal year ’07 performance. With subscription and support revenue at more than 90% of total, it is not surprising that gross margins in that business followed a similar pattern. Q1 subscription and support gross margins were 86%, down a bit from Q4 but flat from Q1 last year and flat from where they finished our full fiscal ’07. These results reflect the relative pricing power that comes from dedicating to creating greater levels of customer success every day. While we have announced a lot of big deals the past few quarters, we are adding customers in the small and medium segments just as fast. In fact, our mix of revenue has remained virtually unchanged for the past four quarters, with roughly one-third at small business, one-third in mid-size business and one-third in large corporations with more than $1 billion in revenue. Our monthly ASP was up a bit from Q4 and remains well within its historical range of high 60’s to low 70’s. Finally, while gross margins in our professional service business continue to be negative, we did get a good bounce back from Q1 from our seasonally weak Q4. The ongoing effects of EITF-0021 and continued hiring were the primary drivers of this result. Operating expenses were well managed during the quarter, finishing at 76% of revenue, down two points from Q4 and one point from the year-ago quarter. While we continue to add people in all key areas to fuel our growth, we are also being more efficient in the use of our resources and that is showing up as leverage in operating expenses. In Q1, the expenses as a percentage of revenue for R&D, sales and marketing and G&A were all flat to down from Q4 levels, and on a year-over-year basis, our 300 basis point improvement in G&A as a percent of sales allowed us to increase our investments in areas essential to growth, namely sales, marketing capacity and product engineering. Even as we increased those investments, we still managed a full one point reduction in operating expenses from a year ago. There’s no question that operating expenses represent the key leverage points in our model, but with more than 32,000 customers on an installed base and a business model that allows us to growth bigger and deeper into accounts as we create customer success, we could easily lever our model to date if we were willing to accept lower growth rates. However, we believe this would be short-sighted. We are fundamentally disrupting an industry at a time when market momentum is moving in our direction and the competition is struggling to evolve. The investments we are making to date are essential for us to emerge as the dominant on-demand application and platform company of the future, and thus levering too quickly creates risk in achieving that goal. That is why we believe that investing in growth while slowly levering the model is the best way to create long-term shareholder value. To close our my expense discussion, let me quickly give you an update on our headcount. We finished Q1 with 2,243 full-time employees, an increase of 173 from Q4 and an increase of more than 750 from Q1 of last year. We have done an outstanding job of hiring large numbers of quality people for critical roles, while still delivering the levels of innovation and delivery excellence that customers expect. GAAP operating margin for the first quarter was three-tenths of a percent, our highest level since we began to include FAS-123R stock-based compensation and amortization of purchased intangibles in our GAAP numbers last year. We achieved these results even while absorbing more than $12 million in stock-based compensation expense and roughly $1 million of expenses related to the amortization of purchased intangibles. Excluding the impact of stock-based compensation, operating margin was 7.5% in Q1, and that’s up from 6.3% in Q4 and 7.2% a year ago. These improving results are consistent with my prior remarks about slowly leveraging the model over time, even as we are making investments so critical to our industry-leading growth. Our effective GAAP tax rate for the first quarter was 73%, higher than in Q4 but down from last year’s 89%. As we continue to improve the profitability in some of our foreign tax jurisdictions, we expect this declining trend to continue throughout the year. GAAP net income for the fourth quarter was approximately $730,000, an increase of more than $1 million from Q1 of last year and an increase of more than $200,000 from Q4. On a GAAP basis, EPS we earned approximately $0.01. Given the investments we are able to make in people and infrastructure, I was pleased with our Q1 profit performance. Our strong revenue and growing margins translated into an excellent quarter of cash generation, with operating cash flows of $37 million. This result was roughly three times the operating cash flow Q1 last year and nearly the same as our seasonally strong Q4 result of $38 million. Capital spending jumped this quarter to $16 million and several factors contributed to this increase. First, our acquisition of Koral was accounted for as a technology asset purchase and not a business combination, and this added roughly $5 million to CapEx during the quarter. In addition, our need for additional office space to facilitate growth, together with the opening of our first ever on-demand business incubator in San Mateo, California, resulted in fixed asset additions of approximately $7 million. Finally, we had nearly $4 million of capitalized software development for the creation of internal systems and R&D activities related to products that are in beta. The balance sheet as well remains very strong, so starting with our assets, total cash, cash equivalents and marketable securities finished the first quarter at approximately $448 million, an increase of more than $35 million from Q4 and an increase of approximately $150 million year over year. As expected, receivables declined by roughly $24 million during the quarter on our typical seasonal increase in receivables from Q4. The items that drove our capital spending higher this quarter manifested themselves in the balance sheet in the form of sequentially higher cap software and increased fixed and other assets. On the liability side of the balance sheet, strong bookings during the quarter pushed deferred revenue to record levels in Q1. Deferred revenue on the balance sheet, which includes booked and invoiced but not yet recognized business, finished at $296 million, an increase of roughly 62% from last year. But that, as you know, is only part of the story. As in the past, the amount of off balance sheet booked not yet invoiced business is once again greater than the deferred revenue on the balance sheet. The only other material change on the balance sheet was a minor reclass of certain income taxes payable due to long-term resulting from adoption of FIN-48 at the start of the quarter. Together, net total income taxes payable showed a mild seasonal decline. So let me turn to our outlook. For Q2, we are now projecting revenue in the range of $171 million to $173 million, and GAAP EPS of approximately break-even to $0.01. This GAAP EPS projection is expected to include roughly $13 million to $15 million in stock-based compensation and roughly $1.5 million of amortized purchased intangibles. This projection assumes an average fully diluted share count for Q2 of 122 million shares and a projected Q2 GAAP tax rate of about 70%. For the full year, we are raising our outlook today. Because of our strong Q1 performance and the continued strong growth in software as a service adoption, we now expect revenue in the range of $722 million to $728 million. We continue to expect full-year ’08 GAAP EPS in the range of $0.07 to $0.09. This estimate includes an expected $60 million to $70 million in stock-based compensation expense and roughly $5 million in amortization of purchased intangibles. For purposes of calculating these full-year estimates, we project a fully diluted average share count of 124 million shares and a GAAP tax rate of 65%. Before closing, I would like to emphasize that we do report our results strictly in GAAP terms and yet Thomson consensus estimates continue to be in non-GAAP terms. This has created some confusion with the media and certain analysts but in order to avoid any confusion, we ask that the sell-side community present their GAAP estimates to Thomson as primary estimates so that those consensus estimates are made on a comparable basis with our reported results. We will be working with Thomson and the sell-side in the days ahead to facilitate this change. We thank them in advance for their cooperation. That concludes our prepared remarks for today’s call and next we will open up things for questions. Operator, please.

(Operator Instructions) Our first question comes from the line of Laura Lederman with William Blair. Laura Lederman - William Blair: Great quarter. Two real quick ones; there’s been much rhetoric in the quarter about SAP and Oracle and all their new products. Have any of your customers really asked much about that? Separately, can you talk about international in Asia? Adoption in those markets obviously is growing quickly, but do you feel they are as far along as the U.S.? What do you need to do to drive even better adoption? Thanks.

Thank you, Laura, for that question. In regard to competition, of course in the software industry, like in a lot of industries, like the automobile industry or the cell phone industry, you basically have many different types of competitors. Really the key is that you want to have a differentiated solution against those competitors. Fundamentally, you want to change the game away from where those competitors play and into a new game. That’s what Salesforce.com is all about. We are all about changing this game in the software industry with basically two things, a new technology model and a new business model. These two new models are very, very different than what Microsoft or Oracle or SAP do, or have done or even do today. When it gets right down to it, no sector of the software industry has more interest from customers than on-demand. Everybody wants to understand on-demand and go into on-demand, but really Salesforce.com and other pure play software service companies are able to bring those customers that vision of the future and innovation, which is why we ranked so high this quarter in some of these surveys you’ve seen, like the Wired 40 and E-Week’s top 100 innovators. People look to us for those answers. People look to us as innovators. People look to us as basically the visionaries in on-demand computing. The reality is they don’t look to those companies for that because they haven’t provide that. They’ve had rhetoric or they put their words there but they haven’t delivered the technology, the solutions and just think about it -- who are their top customers? Who are -- Oracle, SAP, and Microsoft, what are their top large customers in on-demand? When we say Dell, when we say Cisco, when we say Merrill Lynch, when we say Aon, when we say any of our customer names or even the one I’m about to get to to answer your second question, the reason we added 2,500 customers this quarter, Laura, is because those other software companies are still selling software. That’s what they know how to do, that’s what their incented to do, that’s how they are architected and yet we have over 2,200 employees who only do one thing very, very well, which is sell the on-demand world. In software, like a lot of industries, it’s never a zero some game. The reality is that I look at it personally much like the automobile industry. You are going to see a lot of different cars on the road and there’s going to be a lot of different brands, but ultimately you want to get to the position that Toyota is in -- the market leader, the revenue leader, the technology leader, and that’s how we see Salesforce. We see ourselves as the market technology leader in this area and certainly we are the market share and revenue leader. Today, with over 30,000 customers and the largest implementations in the world, the most transparency into our systems, and with frankly the most innovation. Just look at how many new technologies we were able to bring just in the last quarter -- no one does on-demand better than Salesforce.com. When you are buying products, when you are buying from companies you are going to buy the best because that is what customers want and that’s why we continue to do so well. In regard to your question about Asia, I think Asia and Europe are exciting markets for on-demand. I’m really excited about Japan. I have been excited about Japan for a long time, as you know. But with a swing transaction is what I would call the Japan Post, which we worked on very, very hard, a lot of big competitors in that transaction because the Japan Post is widely regarded by the Japan IT industry, which is the second-largest IT industry outside the United States, as a beacon of where the industry is going. For them to choose us was outstanding but it was a huge story in Japan the day we got announced. The Nikkei on page one had the deal that the Japan Post had selected Salesforce.com and our on-demand model. It was page one of the Nikkei. I could not be more delighted with winning that transaction and how our team is doing there. I see other big success stories in Asia and Europe as well, but for us, the Japan Post has just a tremendous upside opportunity for us. They have 400,000 employees. We only picked up the first 5,000 and we see just a tremendous upside in that one account. But now, the kind of contacts that we are able to make in the Japan industry because of the validation of that customer is unprecedented in our history in Japan. Thank you, Laura, for your questions.

Our next question comes from the line of Thomas Ernst with Deutsche Bank. Thomas Ernst - Deutsche Bank: Actually, this is Greg on behalf of Tom. A quick question; obviously the cash flow from operations is very strong quarter here, and the CapEx included some one-time charges due to the acquisition and the space build-out. How should we think about your cash flow margins going forward in terms of free cash flow?

We obviously have always had the management team focused on cash flow and I’ve often said it’s pretty lumpy. This quarter is a good example of that. We did an acquisition and added $5 million for Koral, as I mentioned. We put some new buildings in place and offices and we are going to continue to grow that. It is tough to forecast what that is and we don’t give a forecast going forward, but we are certainly on the move in growing as a company and you are going to see that lumpiness in our spending and our cash flows going forward. Thomas Ernst - Deutsche Bank: If you become the one-stop, do you see any reason why it shouldn’t trend drastically differently from what you did in 2007?

As we grow, we’ve got other opportunities. We are not giving cash flow forecasts, so we will leave that to your own devices.

Our next question comes from the line of Jason Maynard with Credit Suisse. Jason Maynard - Credit Suisse: Good afternoon, guys. As you introduce more and more products, can you talk a little bit about some of the success and maybe some of the challenge you are seeing in selling products like service and support, PRM in the platform? And maybe just quantify what some of those metrics were for Q1. I think you’ve given that number in the past. Thank you.

Jason, our strategy as you know is a Trojan horse strategy, which is we come in initially into an account with Salesforce.com and then once we are in that account, we use that success and the strength of that position to sell additional products. Those products are many of the ones that you mentioned, including our Salesforce service and support product, or our partner relationship management offering. Even more specifically, our platform and the ability to build your own on-demand applications as one of our customers. That’s been a very successful strategy for us. We believe that it is one of the reasons that our application has been so sticky inside our customers, why the adoption trends have been so positive, and we see good growth in all of those businesses. We think that those are all very exciting and competitive products. As I mentioned, the Salesforce service and support product specifically got a lot of attention this quarter, as did the platform edition. I think you will see some very exciting new products, kind of what we call these blades to our razor, if you will, coming out in the quarters to come.

Our next question comes from the line of Kash Rangan with Merrill Lynch. Kash Rangan - Merrill Lynch: Marc, I was going to ask a question similar to that of Jason’s but since you didn’t quite give us the detail there, I’m going to ask it a different way, or maybe just focus on Apex. I was under the impression that Apex was already available. I think you announced new pricing for Unlimited Edition, $250. I was under the impression that include Apex but it looks like it is going to be available later on in the year. Can you clarify that comment a little bit? What exactly is available today and if the customers that have bought the Unlimited Edition effective January 1st get Apex for free? That’s my only question. Thanks.

Well, as you know, at our Dream Force conference last year, we did announce our new Apex technology. We’re the first company in the industry that will let our customers run their code on our servers. We have a multi-tenant virtual machine that is able to execute this Apex code. You can embed this code at various levels in the application, at the page level, at the field level, at the application level, and it’s been a very exciting technology. It’s a breakthrough technology and customers and developers have been watching the blogs, are really entranced and excited about it. It is currently in what we call a developer preview, which you can consider to be a beta. That means developers have it as part of our Developer Edition. They are coding in it. You can see their reviews and comments on our Success Force boards if you go to successforce.com. You will see what people are saying about Apex. However, we have not yet announced pricing for Apex or packaging for Apex. We’ve only announced it as a feature and we have not discussed what editions it will be in or what the pricing is. We have been doing a lot of focus groups and discussions with customers and as we get ready to go into a production environment with Apex, we will be able to bring it to you. But up to this point, Apex is still just a developer preview mode and nothing more than that. So when we get to the next level, we will let you know. Kash Rangan - Merrill Lynch: Steve, maybe for you, when you report the sub number second quarter, are you going to give us the Q1 and Q2 separately or are you just going to go to reporting on a half yearly basis?

As we said before, we’ll give you updates periodically about the sub number but we are really excited and focused on the products that we’ve been introducing, the diversity of our customer base in small, medium and large and that’s how we’re driving our business going forward. So stay tuned.

I would just add we are also very excited about how not having to report the subscriber number this quarter puts the light on the strength of these aspects of the business which are so important to us, like the revenue and cash flow numbers. That’s what it’s all about at Salesforce -- building a strong business based on GAAP standards.

Our next question comes from the line of Charlie di Bona with Sanford Bernstein. Charlie di Bona - Sanford Bernstein: Marc, I was wondering if we could turn back to the Apex idea here for a little bit. As you are rolling this out, can you give us a sense of the kind of timetable you are on in terms of drawing ISVs on to the platform and having them start to deploy substantial products on it? Maybe give us an idea of the kind of metrics by which you are going to evaluate your success there and that we might be able to watch as well from the outside.

Well, what we are doing with our platform initiatives is extremely exciting. We have, as you know, a comprehensive on-demand platform, including the database, an on-demand database, an on-demand user interface as well as the on-demand logic environment to build the business logic into the technology which we call this Apex code. All of these things together really make up the ability to build these on-demand applications and customers can build these applications or ISVs can build this application and that’s really fantastic. Now, we are going to make some new announcements around Apex and around this idea at Monday’s conference, which is, as I mentioned, going to be our developer conference. I’d like to invite you to attend that. I think that a lot of the questions that you have and questions you don’t have yet but you will be excited to see answers will happen at this conference. We expect to have hundreds of developers attending and it will be at the Santa Clara Marriott in Silicon Valley. If you contact David Havlek in our IR, he will make sure that you get in. Then, as we get ready to roll towards Dream Force, you are going to see us release the next major edition of our platform. We have learned a lot about what customers and developers want from the platform and our levels of innovation at Salesforce, I know they are hard to keep up with, just the velocity of them and even on the platform innovation, but I have to tell you I’ve seen what’s going on in our labs and the stuff that we’ve come up with in just the last six months is just astonishing. I think that when we show our customers what we have in September at Moscone Center at the Dream Force conference they will be really excited about that. This is important to us because at Salesforce, we consider ourselves to be an applications company where we have a lot of mainstream applications like SFA and Salesforce Service and Support, as well as partner relationship management and other key apps that we are building and/or that we’ve released and also platform companies. Both of these pieces are our future.

Our next question comes from the line of Heather Bellini with UBS. Heather Bellini - UBS: Thank you. I was just wondering, most of my questions have been answered but I was just wondering, Steve, if you could give us an idea of what impact of foreign exchange was on the deferred revenue balance, on revenue and deferred from a sequential standpoint and year over year?

Year over year, it had a little bit of impact in Europe but not much in Asia, so it kind of offsets. There was -- I’ll have to get back to you on that because it was not that significant that it moves our number around. If you look at subscriptions and services, we had a great quarter and year over year, I don’t have that off the top of my head. Heather Bellini - UBS: Okay, so for deferred and for revenues, it wasn’t that significant?

On the revenues, it wasn’t. On deferreds, I don’t think it was either because keep in mind, the deferreds are pretty current in terms of it is all off balance sheet, or on balance sheet. Heather Bellini - UBS: Thank you.

Our next question comes from the line of Sasa Zorovic with Goldman Sachs. Sasa Zorovic - Goldman Sachs: Thank you. My question would be when you look at your competitive position, that was I believe one of the first questions that you were asked, but going a little bit more into that, if you compare your competitive position now versus where it was a year ago and where it might be potentially a year from now, how do you see it having changed or likely to change?

Well, we’re in a ride and that ride is called the technology adoption curve and for those of you who have read Jeffrey Moore’s book, Crossing the Chasm, he really details that as we go from early adopters into the mainstream of the market into laggards. This curve I have seen companies ride it, whether it was the mainframe companies before and then it moved to the client server companies and they went up that curve. The client server world, they are moving -- they have already moved through early adopters and mainstream and they are kind of picking up the laggards. Not too many people are buying mainframe software anymore. But with on-demand, we are still coming up the early adopter world and we are just starting to pop into the mainstream world. That’s why you see some -- with us doing mainstream transactions, whether it’s Merrill Lynch or whether it’s the Japan Post or even Cisco, these are large mainstream implementations. So we are just starting to pop in there, but the vast majority of the market at the top of the bell curve, we’re not yet entering yet in on-demand. We are just starting to come into that world. As we head towards that, the key from a competitive standpoint is of course you have to have an organization that is focused from a distribution and development standpoint. You have to have an organization that is differentiated and you have to have an organization that has a history of successful customers. Because at the end of the day, that’s how customers buy today. They don’t listen to analysts. They don’t listen to vendors. They talk to each other and then they make their purchasing decisions. For us, fortunately no one has more successful on-demand implementations than Salesforce.com, and that’s by a wide margin, and of every shape and size and every geography and every language and every industry, we today have the leading implementation, and that’s really where our mind is. Our mind is do we have the top implementation in Japan, in the small, medium and large market? Do we have the top implementation in the United States? At this point, we’re more mature in the U.S. so we’ll say like in the financial services industry, do we have the top implementation in small financial services companies, medium financial services company and the largest financial services companies in the United States? We have large grids in our company where we are constantly looking at all these different markets and do we own and do we have the top on-demand implementations by sector, by size, by geography, by currency, by language, on and on and on. That’s very much the game that we’ve been playing. It’s an incredible ride to watch it happen and go. So today, I believe that if you talk to pretty much anyone, Salesforce is the gold standard in on-demand and it’s because our customers are so successful and because other vendors honestly, especially the big vendors, kind of have looked at this market in a half-hearted way. You look at companies SAP, only last week Hasso Plattner did a whole presentation but then when he got right down to it, he said we’re not yet Google and we’re not yet Salesforce.com. We’re just not there -- those were his public comments. Even Steve Ballmer said the same thing. He’s like yeah, they have high -- Salesforce has rhetoric value but what you really want is Sharepoint from Microsoft to install your own server. That’s the way to go, and a SQL server and a Windows NT and a Vista on top of it -- they don’t have the product and they don’t have the passion and the energy and the innovation and the insight and the enlightenment to kind of get them there. Again, that’s recognized not just by the customer but by Wired Magazine and by E-Week and by -- even in the philanthropy world, we’re recognized. It doesn’t matter where you go, we get that recognition. They don’t like that, of course, because we are affecting their position and we are also accelerating other companies against them. In the world of Microsoft, we’re accelerating Google against Microsoft because we show customers that they can use Google apps like Google Spreadsheet and Google Word Processors instead of buying Microsoft Office. Microsoft doesn’t like that. From a competitive position, I would say that the state of our business is that we are strong and we’ve got the brand and we’ve got the customers that make the point. So I would say we are very, very good today.

Our next question comes from the line of Peter Goldmacher with Cowen and Company. Peter Goldmacher - Cowen & Company: Thanks for the opportunity to ask a question. Can you give us a little more detail on the components of CapEx in the quarter, please?

Sure, Peter, it was -- the CapEx spending was about $5 million on the Koral acquisition because we did that acquisition as an asset purchase. We had about $7 million in leasehold improvements due to new offices, fairly significantly obviously around the incubators in our San Mateo opportunity but there are also other offices in the world. And then, as you know, we have since inception continuously capitalized R&D from beta release to general availability, as well as internal software development that we have going on, and that was about $4 million. Peter Goldmacher - Cowen & Company: Steve, can you help me understand why you account for Koral that way?

The business itself was set up such that it had to be that way. It’s just a GAAP accounting issue. We were buying technology. We weren’t buying a company. Peter Goldmacher - Cowen & Company: Thank you.

Our next question comes from the line of Brent Thill with Citigroup. Brent Thill - Citigroup: Thanks. Marc, you put a considerable investment into the AppExchange over the last year. Can you just give us a sense, now that you turned it and monetized the application exchange, you are asking some of the partners now to share in some of the royalty arrangements and how those conversations are going and kind of how you see the next leg of the application exchange in terms of Salesforce's ability to monetize and derive more value to the shareholders?

I appreciate the question and I think it’s a very important one. As you mentioned, AppExchange is a strategic initiative of the company. We are really proud of being one of the first on-demand companies to have a fully integrated application distribution mechanism fully integrated with our platform. Today, our AppExchange applications have been installed now by more customers than ever before and are used by more customers than ever before. In terms of app store partners, we have over 100 companies who have now signed up to be part of the app store referral agreement. I guess we have about 250 ISVs and about half of them have signed up for the app store. We are very optimistic about that initiative. Of course, it is early days. I’m sure you know we just announced it a few months ago and those partners and our sales forces around the world are still aligning to go and close that business. I expect the first revenue from that to start to show up in the second quarter and then for it to start to grow over time, but I have to get back to the one thing that I’m most excited about, is a lot of our customers today, and I’m sure you know this because you talked to them, are using the AppExchange, are using applications from the AppExchange in their business. It wasn’t just some kind of technology that we introduced that wasn’t actually implemented by our customers. More and more we are finding that our customers are installing multiple AppExchange applications to enhance their Salesforce implementation, either ones that we’ve written like the ones I mentioned in the script, or ones from ISVs. For those ones from ISVs, we’re looking forward to participating in their revenue stream. I think we have the right strategy for that with app store, and as you know that’s part of a referral program, and we are working on app store checkout, which is our electronic version, which will come we believe towards the end of the fiscal year, and we are also extremely excited about that as well.

Just keep in mind the revenue streams are pretty immaterial at the moment because we are just getting that ramped up, so ’08 doesn’t have much impact.

Our next question comes from the line of Nathan Schneiderman with Roth Capital Partners. Nathan Schneiderman - Roth Capital Partners: Thanks very much. I was hoping you could give us, last quarter you gave us the number of customers with 1,000 or more subs, and the number was 500. I was hoping you could give us that number this quarter, as well as DSOs was a very good print. Your linearity was good. I was just curious -- do you feel that’s because you’ve changed the pricing on the unlimited versions that you accelerated some purchasing, or was it just the demand was there early?

We had a great set of Januarys and then February and March with the products that we were releasing got a lot of interest, so that was good. We also, as you guys know, have a lot of focus on cash and collections was one of those areas we hit really hard because we do have strong January receivables to collect in Q1. So it is just a combination of good business and good business early in the quarter. Nathan Schneiderman - Roth Capital Partners: Okay, and then on the subs, the number of customers with 1,000 or more, 500 or more?

I don’t have that information right now.

We can circle back with you on that, Nathan. Nathan Schneiderman - Roth Capital Partners: Thank you.

Our next question comes from the line of Brendan Barnicle with Pacific Crest Securities. Brendan Barnicle - Pacific Crest Securities: Thanks, guys. I was interested in the move into some of the vertical markets. You had a wealth management product that launched this past quarter. I would love any color you have on that. And then any other verticals you are looking into -- you mentioned some of that, Marc, in your earlier comments. Is that something you guys will continue to do or is that primarily going to be on AppExchange? I would love any additional color on the vertical strategy. Thanks.

Well, we are really looking to the AppExchange to help us dictate our vertical strategy. If you spend time in the AppExchange, you will really see where the action is by vertical, and we are also looking at building our own products by vertical, as well as aligning our distribution organization by vertical. Today of course our most ambitious effort and our most successful and we’ve had the most, deepest penetration into all of our competitors pipelines is in the financial services market. We are very excited about our progress in that market and we are also very strong in other industries that we’ve talked about previously in our calls, including high-tech and media, as well as others. But I think that it’s a strategy that you are going to see more of from us and not less, and it’s something that we do a lot of work on internally everyday.

Our next question comes from the line of Peter Cooper with Morgan Stanley. Peter Cooper - Morgan Stanley: Great, thanks. Steve, I wanted to jump back to the software discussion because it jumped up about 100% quarter over quarter to $22 million, so the $5 million in Koral is in there. Did the actual R&D costs also jump by roughly another $5 million? Is that the math there to get to that 22 number?

Yes, I think it’s up about four but keep in mind it’s a combination. We have consistently capitalized R&D from beta to general availability, like I said. As well as, we’re starting an internal systems renovation and you’ll see that go in there as well as we start to build those up. Also, on this purchase of Koral, there’s some tax growth up that goes in there, so there’s a couple of things. It still gets back to just the three fundamentals -- the technology acquisition of Koral, and then our investments in software as we are moving forward, both externally and internally. Peter Cooper - Morgan Stanley: I get that but what I’m trying to figure is how come it could basically -- we’re talking about a $5 million-ish number, and looking at the 10-K for all of ’07, the balance was $5.6 million for the internal software development center, so it basically doubles in three months. So is there a lot of --

Remember, we capitalized from beta to general release. We had a lot of releases in the last quarter, and we are doing a number of internal, like I said. Peter Cooper - Morgan Stanley: Okay, is this going to be a pattern going forward, do you think, of this capitalized level or is this something we are going to see flatten out?

Again, it depends on when we go from GA to beta, so it’s hard to predict that stuff and we don’t really talk about CapEx going forward.

You are going to see a huge wave of innovation from us. We have been building huge and awesome technology in our company. We of course bought some technology, as you know, like with Koral where we have our new content management technology. We are really looking to manage all of our company’s, all of our customer’s information and our servers. Content is a major piece of information that we do not manage in our servers today. Koral is very important. It was a very immature company. It was basically a start-up with only technology, but very exciting technology which is why we made the dip into that. And you are going to see now in going forward is we’ve got a lot of new products and a lot of new features and functions and of course, more releases coming and you are going to see a continued wave of innovation from us as we go forward.

Our next question comes from the line of Dan Cummins with Banc of America. Dan Cummins - Banc of America: Thank you. I wanted to ask about the Japan Post deal. Is that a result of any kind of breakthrough in terms of working with your JV partner, or is that the result of some other partnership in the region? I have another question about CapEx.

I’ll just say that Japan, you have to be there for a long time and you have to be patient. You have to be willing to tolerate a lot of the different changes and things that happen to you in the market, and Salesforce has done all of those things. We have a joint venture, as you know, where we aligned with the former president as well as the former chairman of Oracle Japan, Alan Minor as well as [Jakar Osano], and that joint venture has been in operation about seven years. I don’t have the exact time. We’ve been able to collect a lot of mainstream customers. In Japan, a lot of companies that you probably just generally know about as traditional Japanese companies, whether it’s Kikkoman Soy Sauce or whoever it is, manage their information surprisingly in Japan in Japanese on Salesforce.com, running on servers here and in our data centers. We’ve been very successful with those customers. They have a great experience. In Japan, they are used to being second-class citizens to U.S. software companies. When I was at Oracle, we built a product, delivered in the U.S., we fixed some bugs, eventually we port it to Japanese, we ship it over to Japan, sometimes it gets there about a year later, at the best case maybe six months later and Japanese customers are always waiting for bug fixes or new versions or things that U.S. customers already have. That’s not how our product works. When something gets fixed here in San Francisco, the second it’s release to U.S. customers, it’s release all over the world to all customers in all languages and really the folks that have really been the most grateful for that are the Japanese customers, because they’ve been really hurt the most by U.S. software development practices. We’ve really benefited from now a strong alliance of customers. As you know, it is wide-ranging in size from some of the smallest Japanese customers to I’m sure you know, we have Mizuho to now the Japan Post, which is the penultimate. In my last visit there, when we announced the Japan Post, it was a whole different game for us when people look at us like a real Japanese company that’s fully validated by the top company in Japan. So it’s been an exciting time for Salesforce because this has been one of my personal goals, to be successful in Japan.

Our next question comes from the line of Robert Schwartz with Jefferies and Company. Robert Schwartz - Jefferies & Company: Thank you so much for allowing me to ask a question. Steve, one for you and then one for you, Marc. Steve, it looks like if I look at G&A as a percentage of revenue, you did a great job with it this quarter. Maybe you could help us understand, is it going to continue and what was behind that? Marc, a couple of other companies, really not competitors of yours but were reporting tonight complained about a tough drop-off in business in April and I’m wondering if you saw any change in the buying environment in the last month?

On the G&A side, we are in the four or five cities that we want to be in and starting to build that out. We are doing more automation. Again, we are going to invest where the business is and keep pace with it but we are trying to look at improved G&A leverage there.

We don’t really report our business by bookings, we don’t report our bookings or our bookings by quarter or by month, but I’m sure you realize we just raised our annual guidance. We just had a very good quarter, so I guess I’ll let that speak for how we are doing as a company. Robert Schwartz - Jefferies & Company: If I could just get one clarification from Steve, you said that the average sales price was just up a tad. What were the components of the increase, some sense of why it was up?

We don’t discuss that. I just wanted to give a signal and an indicator that it is staying well within the range that we’ve talked to all of you about in the past.

Our next question comes from the line of Michael Huang with ThinkEquity. Michael Huang - ThinkEquity: Thanks very much. A couple of quick ones -- so can you talk about the percentage of your sales reps that are fully productive on your broadening portfolio of apps and platforms, including PRM and content? Along the same lines, can you speak to the type of training programs that you have in place to get reps up to speed and whether or not this is any different than what you’ve done in the past?

Well, as you know we don’t really talk about the number of reps and that’s partly because we keep adding across the board our resources. In terms of training and bringing people up to speed, yes we continue to train our reps. There’s a lot of exciting products. The good news is our products address the productivity of our sales reps, so they have great incentives to use it.

Our sales reps are our assassins, and in the on-demand market, we have more trained assassins we think than any other vendor out there. It is a very strategic aspect of our business and we do a lot to train them and make them productive but of course, the weapons we give them, they did not have in their previous organization so they require some retraining and tooling and drilling. But once we get them there, they tend to be very productive and successful.

Our next question comes from the line of Trip Chowdhry with Global Equity Research. Trip Chowdhry - Global Equity Research: Thank you and congratulations on a very good execution. Two very quick ones; at the very macro global scale, it seemed like Asia is warming up, Europe is still not warmed up to the portal. What is the reason for that? Also, do you have any plans to open a third data center to cater to your global, international customers? Thank you.

Well, we’ve seen good, solid growth as the numbers show in all markets. We are soon to have more than a quarter of our business outside of the United States, which is really exciting to us. I have mentioned strong and exciting activities in Japan and I can also tell you that is true in the rest of Asia. Finally, in Europe we’ve also had good, solid progression of our business. I think the growth rate in Europe was something on the order of 70% which is I think higher probably than most other software companies that you are following. So we are feeling pretty good about Europe and Asia and the United States of America, which is why we had such a good, strong growth rate for the quarter, which was 55% year over year. Honestly, I’m really excited about being a company that’s at a more than a $600 million run-rate, growing more than 50%. I don’t think there’s too many other software companies that you are following at that growth rate that are growing their European businesses at 70%. So we are delighted with those numbers.

Our next question comes from the line of Ajay Kasargod with Piper Jaffray.

Next question.

Our next question comes from the line of Philip Rowe with Prudential. Philip Rowe - Prudential: Thank you very much. Good afternoon. Could you talk a little bit about as you dig into the mainstream part of the market, clients that are still thinking about on-premise software as an option, what kind of pricing discounts, or what percentage of deals do those represent where they still need some discount on your side to be competitive with what they think on-premise software costs them? And then secondly, what is your run-rate and how is it changed for that percentage of your deals? Thank you.

The way we see it at our company is that on-demand is a much lower total cost of ownership for a customer than the traditional on-premise, not only because of the purchase price but also because we dramatically lower the risk of failure that so many of these customers have experienced by buying on-premise software. So many of the customers that we have today used to have things like Seibel. Like Merrill Lynch, my gosh, I think they had $35 million of Seibel software before we extracted it from their enterprise. When you are structuring a deal for them, and whether you are putting together a discount or a total package of success for the customer, really ultimately what you are trying to get to is a win-win between you and the customer, making sure that they have a rapid implementation, that they get adoption and they get the system that is highly customized and integrated for them. So I don’t think we really see it as a peer comparison or in terms of a discount at all. We see it as a full package to make that customer a success, where before they probably have already failed with on-premise software by the time we got there. Thank you for the question. Philip Rowe - Prudential: Just a quick follow-up though, do you find the percentage of clients that don’t understand the benefit as you described it going down?

No, I think that we are going up the technology adoption curve that I mentioned earlier in the call. We are moving up that curve with more technology, more features, more function, more success stories, more scalability. We are able to point to customers today who have signed up for 25,000 users or 15,000 users. A year ago, we were not at that level, so that just brings more customers and more prospects and more excitement and more energy to us, and there’s nothing like that. That’s where you want to be and that’s why Hasso Plattner and Steve Ballmer and Larry Ellison were all having to respond to us, because we are doing so well and we fully penetrated all of their pipelines. They are in a deal and it’s a CRM deal, odds are we’re in there.

There seem to be no further questions. Do you have any closing remarks?

Before we close off today, I just want to make everybody aware of a couple of upcoming events at which Salesforce.com executives will be appearing in the next week. First, tomorrow morning at 11:00 a.m. Pacific Standard time, Marc will be providing a closing keynote at the Deutsche Bank Technology Conference here in San Francisco. I encourage you all to either attend that event or listen in. We will have a webcast on our website. And then, as Marc mentioned in his comments today, Salesforce will be hosting its second annual developer conference on Monday the 21st in Santa Clara, California. Again, Marc will be keynoting that event and there will be a panel luncheon as well for analysts and media. If you would like to attend that event, please do contact me directly and I will make sure you get registered. With that, I would like to thank you very much for joining us today. Have a great day and we look forward to catching up with you next quarter. Thank you.

This concludes today’s conference call. You may now disconnect.