Later today, Salesforce.com will release its fiscal year 2016 financial results.  That's a big deal in the business worlds because Salesforce.com is the market leader in a $36 billion software market.

Since that's a heck of a lot of money, maybe this is a good time to ask whether all that money spent on CRM is actually money that's being well spent.  

Now, while I've written a fair amount about CRM, I'm no expert. However, I'm pretty sure that the net effect of installing and using a CRM system is to make your sales and marketing teams more efficient.

Therefore it seems to me (and I could be getting this all wrong), that companies who successfully use CRM over a period of years should be spending less on sales and marketing as a percentage of revenue.

The analogy here is factory automation or supply chain automation, both of which reduce your cost of goods, which is then reflected either in lower prices to your customers or more profit for your investors, right?

Again, I'm no expert, but it seems logical me that the companies that should benefit the most from CRM would be the CRM vendors themselves, since they always get the "latest and greatest" software.

Imagine my surprise, then, when I checked the SEC files for Salesforce.com.  Rather than the gradual reduction of sales and marketing expense that I expected to find, I discovered they spend same percentage of revenue as they did ten years ago.

Here are the actual figures, right out of the SEC reports:

2006: 48%

2007: 51%

2008: 50%

2009: 50%

2010: 46%

2011: 48%

2012: 52%

2013: 53%

2014: 53%

2015: 51%

So, unless I'm not thinking this through clearly, Salesforce.com has spent billions developing CRM software that it presumably uses itself but has nevertheless never managed to significant reduce its sales and marketing costs.

Maybe I'm missing something here.  Maybe Salesforce's fiscal 2016 results will show the sharp drop in sales and marketing expense that you'd expect from an industry leader in sales and marketing automation.

Like I said, I'm probably confused in my thought process here.  Anyone care to explain why the cost savings doesn't seem to show up?