Salesforce passed $1 Billion in Cloud-derived revenues two years ago, almost entirely based on ‘subscription and support revenues’ from their Software as a Service (SaaS) CRM offering. At the other end of the stack, down in Infrastructure, Amazon is believed to be doing pretty well, but the company still refuses to break out results for their Cloud offerings.
Rackspace (by most measures number 2 in the Cloud Infrastructure game) yesterday reported results that show Cloud-based revenue of just over $100 Million for 2010. As Derrick Harris notes, Cloud revenues make up an increasing proportion of the hosting company’s profits. It’s not Salesforce though, and neither is Amazon. Margins remain far higher for those at the top of the stack, forcing infrastructure providers to continually balance low-margin commodity reach with adding differentiating features to move them up-stack toward the money and lasting customer relationships.