sfsf corporate presentation public 080111

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Corporate Presentation

Q2 2011



Safe Harbor Statement“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 andSection 21E of the Securities Exchange Act of 1934. These forward-looking statements are SuccessFactors’ current expectationsand beliefs.

These forward-looking statements include statements about anticipated revenue and deferred revenue and expected revenue for

the fourth fiscal quarter of 2010 and the full fiscal year 2010. Factors that could cause actual results to differ materially with

respect to our anticipated results for the fourth quarter include the fact that our fourth quarter financial statement review process is

ongoing, and accordingly, actual results are preliminary and are subject to further review as part of our quarterly financial

statement review process, and accordingly, we cannot assure you that the final amounts will not change materially as a result of

our quarterly review process. Factors that could cause actual results to differ materially from those contemplated by the other forward-looking statements include: our ability to continue to experience high customer renewal rates; whether customers renewtheir agreements for additional modules or users; levels of new customers; pricing pressures; the uncertain impact of the overall

global economic slowdown, including on our customers, prospective customers and partners, renewal rates and length of sales

cycles; the fact that our market is at an early stage of development, and it may not develop as rapidly as we anticipate; competitive

factors; outages or security breaches; our ability to develop, and market acceptance of, new services; our ability to continue to sell

our services outside the HR area; our ability to manage our growth; our ability to successfully expand our sales force and its

effectiveness; whether our resellers and other partners will be successful in marketing our products; our ability to continue to

manage expenses; the impact of unforeseen expenses; and general economic conditions worldwide. If any such risks or

uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed

or implied by the forward-looking statements we make.

Further information on these and other factors that could affect our financial results is included in the section entitled “R isk

Factors” in our Annual Report on Form 10 -K for 2010 and in our recent reports on Form 10-Qs and in other filings we make with

the Securities and Exchange Commission from time to time.

These documents are or will be available in the SEC Filings section of the Investor Relations section of our website atwww.successfactors.com/investor . SuccessFactors, Inc. assumes no obligation and does not intend to update these forward-

looking statements, except as required by law.

http://www.successfactors.com/investor

http://www.successfactors.com/investor



Investment Highlights Leader in large ($36 billion), fragmented,

under-penetrated, fast growing market

BizX suite gives us unique competitiveadvantage

We have a product that has the capability to

touch every employee in a STRATEGIC way Strong execution and action oriented culture,

posting market leading growth rates andhitting key metrics

Highly profitable, sticky recurring revenue

model

Large underpenetrated user base (Over 15million users and growing)

Platform provider to world’s largestenterprises (more than a suite)

3



Users

Customers

Countries

Industries

Languages

Largest Deployment

At IPO

2.0M+

1,400+

156+

60+

18

85K

Today

15M+

3,500+

185+

60+

34+

2M+

June 20083.7M+

1,950+

180+

60+

22

300K

Accelerating Leadership

4



Business

Execution



95% of employees don’t

understand their company’s strategy

What Are We Solving?

6

50% of the average employee’s time isspent on non-productive work

84% of large

companies say they arenot using their

workforce to its full

potentialSource – Norton/Kaplan, Bersin & Associates, 2008



BizX Impact Across the Board

2.8%

PerformanceChange

AVG

HIGH

5.4%

13.8%

IncreasedProjectCompletion

AVG

HIGH

67%

5.5%

Increased TimeSpent on StrategicPriorities

AVG

HIGH

40%

FasterCommunication ofStrategy Change

1wk AVG

HIGH

8wk

Bridge the gap between Strategy and ExecutionExecute top and bottom line

Source: Independent consultant research findings, June 2009. Study sampled 527 customers . 7



SF ROX – Building Decisive,Lasting Business Outperformance

SF ROX Comprises the North American Publically listed companies who when the investment was made had been usingmore then three modules for more than three quarters, with more than 50% of employees using the solution. N = 37.

20%-point gap to NASDAQ, 40%-point gap to S&P500



StrategyBusiness

Results

Social Sourcing

Succession

Recruiting

Attract

and Retain

Learn and

Develop

Formal learning

Social learning

Compliance

Career planning

Calibration

Performance

Goals

Business Alignment

and Performance

Social Collaboration

SuccessFactors Cloud Platform

Analytics and Workforce Planning

What we do:Close the Execution Gap

Compensation

Employee Central 2.0 - Next Generation HRIS



Recognized Industry Leadership

10



3,500+ Blue-Chip Customers Around the World

11

EMEA APAC

Top Retailer TopFinancialServicesCompany

Major USAutomak

er

Americas



Addressable

Market



Business Impact

# of Users

EPM

Business ExecutionSoftware

Business

Analytics

Workforce

PlanningHR/Back-

Office

Systems

Accelerating Adoption within $36BMarket

13

SocialLearning



Business Alignment

$20.0Billion Market

People Performance

$15.9Billion Market

Potential Market Opportunity

14Source

–Company estimates based on Dunn & Bradstreet, USCensus Bureau , Bersin & Associates , Forrester Research and

internal analysis, June 2009



Business Alignment

$20.0Billion Market

People Performance

$15.9Billion Market

Web 2.0 Analytics

Projects Collaboration

Bigger Market,

Bigger Impact

Business Execution

$35.9Billion Market

Potential Market Opportunity

15

Source – Company estimates based on Dunn & Bradstreet, US CensusBureau , Bersin & Associates , Forrester Research and internal

analysis, June 2009



In our time,we’ve seen a

lot of change



The workforce has changed

- US Census Bureau Data

By 2013, 47% of employees will be those born after 1977



Technology has changed

Sales of cloud-based

applications are growing five times faster than those

of traditional applications



Have Workforce systems changed?

Core HR

Recruiting

Talent

Learning

Customers want an integrated platform that allows them to use the fewest

possible vendors

Talent Management Systems Customer Satisfaction 2011



Redefining Core HR and Learning

Employee Central 2.0 SuccessFactors Learning



Core HR systems not made fortoday’s world

Siloed from talent Primitive and difficultanalytics

File cabinets forrecord-keeping



On-premise HRIS = stagnant,costly, unusable

2000

PeopleSoft 8.0

2010

PeopleSoft 9.0

HRMS Upgrades Slowing While Replacement Increasing



Employee Central 2.0 -Next Generation Core HR

The user interface is phenomenal ….thanks for making my job as a front line

manager much easier!

Radically different –

Built for BizX

Talent integration

Actionable analytics

CollaborationBuilt for all employees

Comprehensive Core HR

True Cloud



From forms to consumer apps



Designed for non-experts

Designed for our 8M+ users and today ’ s workforce... without training



Analytics that provides insights anddrives critical decisions

We can prioritize our activities, study specific workforce segments, conduct

root cause analyses, and identify high-priority issues.

- Peter Church, VP Human Resources

Correlate workforce and business data –

Support for financial data from external systems;all data in one place

30 years of expertise, rich content,

designed for everyone

Reporting in a box: Know what to measure with2000+ metrics; pre-configured custom reports

Identify problem areas – Compare with richbenchmarks and uncover gaps



28

But, only $1billion is spend

on traditional

learning

management

systems

$125 billion is

spent annually

in the United

States onlearning

$124 billion

Learning Market Dynamics



Social Learning On the Rise

• If you’re like most people, youlearn:• 70% on the job

• 20% from bosses and mentors

• 10% through formal

education and training

• But informal learning is rarelycaptured and shared beyondimmediate associates

70% of learning is informal The Teaching Firm: Where Productive Work and Learning Converge. 1998



Social Learning for the enterprise

This is the future of corporate learning and we're ahead of the curve with

SuccessFactors Social Learning

SuccessFactors Social Learning

Built For Business Execution

Community Learning

True Cloud

Joe Campbell, Director of talent development



Formal learning goes BizX



Customer

Federal Opportunity

Potential Spending on Cloud Computing by Agency

=



“This is a merger of true leaders.SuccessFactors and Plateau are boththought leaders, product leaders andservice leaders. A big part ofPlateau's ascension is the satisfactionof the Plateau client base.

“SuccessFactors’ acquisition ofPlateau brings together the marketshare leader in talent managementwith one of the market leaders inlearning management to create aglobal powerhouse in end-to-end

talent management software.”

“SuccessFactors just acquired another bigpiece of the periodic table of elements. WithPlateau, they now have the opportunity to mix

things together that haven’t been mixed

together before. More companies than everdesire a single, unified suite that they can tie totheir overall business strategy.”

Positive analyst feedback



Financial

Review

All Ti Hi h i Q t l N



All-Time High in Quarterly Non-GAAP Revenue

35

48% y/y Revenue Growth($MM)

$23.5 $25.7

$29.7$33.0

$35.2$36.9 $38.7

$42.2 $44.7

$49.5 $53.4

$61.7

$68.3

$73.2

$0

$10

$20

$30

$40

$50

$60

$70

$80

Q1’08Q2’08Q3’08 Q4’08Q1’09Q2’09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11

72% GrossMargin



Delivered 42% Y/Y Billings Growth

$35 $37$42

$47

$33$39

$50

$63

$48 $53

$66

$89

$63

$75

109%

68%

52%

2%

-6%

7%

18%

34%

45%

35% 32%

41%

31%

42%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Billings YoY Growth

36

In US$M

C ti t A l t B ki



Continue to Accelerate Bookings

Outside of Core Performance and Goal

37

As a % o f New/Upsel l Bi l l ings 2003 Q2 2011

North America100%

North America74%

International26%

NA Enterprise95%

Mid-Market5%

NA Enterprise40%SMB, Channels,Int’l

60%

Performance &Goal Mgmt

20%Other Modules80%

Other Modules7%

Performance &

Goal Mgmt93%

New Customers

91%

Upsell9%

New Customers39%

Upsell61%

Geographies

Markets

Products

Upsell

Source: Internal SFSF data

C ti d



ContinuedStrong Operating Cash Flows

($25.0)

($12.0)

($5.3)

$2.0

$7.9

$15.4

$25.8

$31.7

$37.7

$43.4

$38.4$42.0

3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Trailing 12-Month CFFO

38

In US$M



2011 Growth Drivers

New Customers• EMEA• North America• APAC

New Products• Learning• Employee Central• Social• Analytics• Recruiting• Calibration

Expand Distribution• Direct• Channels

39



40

IPOQ4’07 Follow-OnQ2’08

Last

reportedQ2’11

LT TargetModel

Revenue 100% 100% 100% 100%

Gross Margin 53% 65% 72% 86%

R&D 27% 23% 18% 15%

S&M 108% 87% 43% 38%

G&A 29% 24% 12% 8%Operating Margin (109)% (70)% 3% 25%

FCF % of Revenue(function of billing margin)

10% 35%

Operating Model Progress



The Future of Business Software

41

“SuccessFactors' annual revenue is only about 1/100th of

SAP's, i t has on ly abou t 700 employees, and it has on ly on e

CEO. Bu t SuccessFactors shou ld be SAP's wo rst

nightmare.”

SuccessFactors IsThe Future Of

Business SoftwareBob EvansGlobal CIO: InformationWeek

“

”



Corporate Presentation

Q2 2011

sfsf corporate presentation public 080111

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