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By | Gavin Clarke 3rd February 2016 13:19

Former Oracle man Block fills Salesforce's COO slot

Ascending steadily into the fluffy white stuff

Oracle's former US sales chief Keith Block has been handed the keys to Salesforce by his boss Marc Benioff.

Block has been named chief operating officer but will continue to lead global sales in addition to alliances and channels, industry strategy, and consulting.

He was lifted from Oracle in 2013, where Block was executive vice president of North American sales and consulting.

Benioff said, in a statement earlier this week, that in his new post Block would bring “stronger alignment across our customer-facing and company operations.”

Block’s elevation will be employed by Benioff to deliver on his boast that Salesforce can become the fastest “software” company to hit $10bn in sales.

Yes, he said “software” company.

Block is both architect and execution man on the all-important-sales needed to hit that $10bn. All eyes will be on Salesforce’s next set of annual results, due later this month, as Benioff reckoned last year that the coming 12 months would be the period when his firm made its first $6bn in revenue. In November the firm said it expects to make $6.64bn to $6.65bn. For fiscal 2015, Salesforce had reported revenue of $5.3bn.

A part of Block’s strategy has been to get customers signed up early, up to nine months ahead of a contact’s end, with discounts of more than 50 per cent. The catch is customers using CRM-as-a-service must also sign up for additional Salesforce offerings – marketing cloud and services.

That not just ticks the box of revenue growth but builds in a double bubble, because once these contracts expire, then prices jump on renewal unless customers negotiate caps.

Also, it builds diversification into Salesforce: the Sales Cloud CRM-as-a-service, Salesforce's first service and the one that really cracks open organisations for this company, remains Salesforce's single largest earner by a long way – 48 per cent of revenue in its last full year.

Sources have told The Register the rate and pace of such discounting had increased in the last 12 months – covering that watershed, hoped-for $6bn year.

Block’s fast-growth strategy is coming at a price, though, as Salesforce continues to languish in the red.

Apart from a brief spot last year, when Salesforce made an operating profit – its first, after 18 quarters – the firm has only made losses despite huge growth.

Losses are here to stay, too: Salesforce said in November it expects a GAAP loss per share of between $0.12 and $0.11 for the current year.®

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