salesforce-vs-hubspot

Salesforce vs. Hubspot

Business / By /

Salesforce generated roughly $232,380 in revenue per customer in 2023, compared to Hubspot’s over $11,384 per customer. Both companies operate in the CRM space, but Salesforce’s strategy is more skewed toward large enterprise deals than Hubspot’s, which focuses on smaller deals.

ElementsSalesforceHubSpotSimilaritiesDifferencesCompetitive Advantage
Customer SegmentsEnterprises, small to medium-sized businesses (SMBs)SMBs, mid-sized businesses, marketing and sales teamsBoth target SMBs, mid-sized businesses, and marketing/sales teams.Salesforce primarily focuses on enterprises but also serves SMBs. HubSpot has a broader customer base, including SMBs, mid-sized businesses, and specialized marketing and sales teams, with a strong emphasis on inbound marketing.Enterprise expertise and SMB outreach (Salesforce). Inbound marketing focus (HubSpot).
Value PropositionCustomer relationship management, cloud solutionsInbound marketing, CRM, sales, and marketing softwareBoth provide CRM solutions, though with different emphases.Salesforce offers CRM and cloud solutions with a focus on customer relationship management. HubSpot emphasizes inbound marketing and provides CRM, sales, and marketing software as part of its suite.Established CRM solutions (Salesforce). Inbound marketing and integrated suite (HubSpot).
ChannelsDirect sales, online platform, partnershipsOnline platform, content marketing, partnershipsBoth utilize online platforms and partnerships for distribution.Salesforce leverages direct sales, online platforms, and strategic partnerships for distribution. HubSpot relies heavily on its online platform, content marketing, and partnerships to reach and engage its target audience.Strong online platform and direct sales (Salesforce). Content marketing and inbound approach (HubSpot).
Customer RelationshipsSales teams, customer support, online resourcesCustomer support, online resources, communityBoth offer customer support and online resources.Salesforce maintains customer relationships through sales teams and extensive support. HubSpot focuses on customer support, online resources, and an active community.Comprehensive support and sales (Salesforce). Active community and customer resources (HubSpot).
Key ActivitiesCRM development, cloud infrastructure, supportInbound marketing, software development, supportBoth involve software development and support activities.Salesforce’s key activities revolve around CRM development, cloud infrastructure management, and customer support. HubSpot’s activities include inbound marketing, software development for its marketing and sales solutions, and providing support for its customers.CRM and cloud expertise (Salesforce). Inbound marketing and integrated solutions (HubSpot).
Key ResourcesCloud infrastructure, CRM expertise, sales teamsMarketing expertise, software development, supportBoth rely on their respective areas of expertise.Salesforce’s key resources include cloud infrastructure, CRM expertise, and a sales force. HubSpot’s resources encompass marketing expertise, software development capabilities, and support teams dedicated to its marketing and sales solutions.Established CRM and infrastructure (Salesforce). Marketing and software development expertise (HubSpot).
Key PartnershipsTechnology partners, consulting firms, ISVsAgency partners, marketing technology providersBoth collaborate with technology and service partners.Salesforce partners with technology providers, consulting firms, and independent software vendors (ISVs). HubSpot collaborates with agency partners and marketing technology providers to enhance its inbound marketing and sales solutions.Diverse technology and consulting partnerships (Salesforce). Agency partnerships and marketing technology (HubSpot).
Revenue StreamsSubscription-based models, professional servicesSubscription-based models, professional servicesBoth generate revenue through subscription-based models and professional services.Salesforce generates revenue primarily through subscription-based models and additional professional services. HubSpot’s revenue is driven by subscription-based models and complementary professional services, especially in inbound marketing and sales.Strong subscription-based revenue and professional services (both).
Cost StructureInfrastructure costs, development, sales and supportMarketing costs, software development, sales and supportBoth incur costs related to infrastructure, development, and sales/support.Salesforce’s cost structure includes expenses for maintaining infrastructure, software development, and sales/support teams. HubSpot’s cost structure encompasses marketing expenses, software development costs, and sales/support activities, with a strong focus on marketing investments for inbound growth.Infrastructure and development costs (Salesforce). Marketing-focused cost structure (HubSpot).

Financials

salesforce-financialshubspot-financials

Revenue Per Employees

salesforce-profitshubspot-revenue-per-employee

Revenue Breakdown

salesforce-revenue-breakdown-2023hubspot-revenue-breakdown-2022

Key Highlights

  • Revenue per Customer Comparison:
    • Salesforce generated approximately $176,000 in revenue per customer during 2022.
    • HubSpot, on the other hand, generated over $10,000 in revenue per customer during the same period.
  • Operational Focus in the CRM Space:
    • Both Salesforce and HubSpot operate within the Customer Relationship Management (CRM) space.
    • Salesforce and HubSpot offer tools and solutions to help businesses manage customer relationships, sales, and marketing.
  • Differing Customer Strategy:
    • Salesforce employs a strategy that leans toward larger enterprise deals.
    • HubSpot focuses on smaller deals with a different approach.
  • Salesforce’s Enterprise Emphasis:
    • Salesforce’s revenue per customer is significantly higher due to its focus on catering to larger enterprises.
    • The company specializes in offering extensive CRM solutions tailored to the complex needs of large organizations.
  • HubSpot’s Small and Medium Business (SMB) Focus:
    • HubSpot’s strategy targets small and medium-sized businesses (SMBs).
    • The company’s offerings are designed to be accessible and cost-effective for businesses of this scale.
  • Strategy Implications:
    • Salesforce’s strategy of pursuing larger deals allows for substantial revenue per customer but typically involves longer sales cycles and more intricate implementations.
    • HubSpot’s focus on smaller deals emphasizes a higher volume of customers, potentially leading to a broader customer base.
  • Diversification and Target Audience:
    • Salesforce’s approach allows it to work closely with large corporations and enterprises with complex needs.
    • HubSpot’s strategy positions it as a solution provider for smaller businesses looking for simplified CRM and marketing tools.
  • Market Positioning:
    • Salesforce is often associated with enterprise-grade solutions, offering a wide array of products beyond traditional CRM.
    • HubSpot positions itself as an inbound marketing and sales platform suitable for SMBs.

Related Visual Stories

Who Owns Salesforce

Who Owns Salesforce?
Marc Benioff, Co-CEO of Salesforce, is the primary individual shareholder, with nearly 3% of the company’s stock. Other main individual shareholders comprise Parker Harris, Co-Founder, and Chief Technology Officer, and Bret Taylor, former co-CEO. Major institutional shareholders include The Vanguard Group, Fidelity, and BlackRock.

Salesforce Business Model

Salesforce business model
Salesforce follows a SaaS business model, offering four main categories of cloud CRM (Customer Relationship Management) services spanning the sales cloud to the marketing cloud. Where subscriptions drive the primary revenue model. However, the company leverages professional assistance to push the adoption of the software and retention of paying subscribers. Indeed, by 2024, Salesforce generated over $32 billion from subscriptions and $2.32 billion from professional services.

Salesforce Revenue

Salesforce Revenue Breakdown
In 2024, Salesforce generated $32.54 billion from subscriptions and $2.32 billion in professional services, compared to $29 billion in subscriptions in 2023 and $2.33 billion in professional services.

Salesforce Employees

Salesforce Employees
Salesforce had 72,682 employees by 2024, compared to 79,390 employees in 2023, 73,541 employees in 2022, and 56,606 employees in 2021.

Salesforce Marketing Expenses

Salesforce Marketing And Sales Expenses As % of Total Revenue
By 2024, Salesforce spent 37% of its total revenues on marketing and sales expenses, compared to 43% of its total revenue in 2023, 45% in 2022, and 45% in 2021.

Salesforce Cost Structure

Salesforce Cost Structure
Professional services are run at negative gross margins. In short, by 2024, on $2.33 billion in revenue from professional services, Salesforce reported a $44 million gross loss. In short, Salesforce runs professional services at a loss to boost its subscription revenue over time since professional services are used to enhance the use and retention of the software. The subscription revenue cost structure is quite effective. By 2024, on over $32 billion in subscription revenue, the company reported $6.18 billion in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a $26.36 billion in gross profits, in 2024.

Salesforce Revenue Per Employee

Salesforce Revenue Per Employee
Salesforce revenue per employee in 2024 was almost $479,582, compared to over $394,911 in 2023, $360,234 in 2022 and $375,437 in 2021.

Salesforce Competitors

Salesforce Competitors
Salesforce is a cloud-based customer relationship management (CRM) provider, allowing businesses to build meaningful and sustained relationships with their customers. With robust, customizable software that integrates with social media, Gmail, and Microsoft Outlook, the Salesforce CRM platform is rated highly among businesses of all shapes and sizes. Recent data has shown that the company has captured 19.5% of the global CRM market.

Salesforce Mission Statement

Salesforce Mission Statement
Salesforce’s mission is to build bridges between companies and customers. Salesforce does that via a SaaS platform, which is enhanced via professional services offered on top of it.

Salesforce Acquisitions

Salesforce Acquisitions
Salesforce was founded in 1999 by Marc Benioff, Frank Dominguez, Dave Moellenhoff, and Parker Harris. In a relatively short time, the corporate powerhouse of enterprise software has made numerous acquisitions as part of its broader growth strategy to become a SaaS giant!

Who Owns Hubspot

who-owns-hubspot
Hubspot’s main individual shareholders are its founders, Brian Halligan (1.7% ownership) and Dharmesh Shah (3.5% ownership). At the same time, the majority stake is in the hands of institutional shareholders, who have a more passive role. These institutional investors comprise T.Rowe Price Associated (10.4% ownership), The Vanguard Group (8.64% ownership), BlackRock (7.2% ownership), and FMR-Fidelity Investments (5.49% ownership).

Hubspot Business Model

hubspot-business-model
HubSpot is a CRM (customer relationship management) solution providing various levels of its B2B and Enterprise subscription plans. Beyond subscriptions, the company monetizes via professional services. However, these carry a negative marginality as the company uses professional services (in onboarding and implementation) to increase its tools, which help companies leverage digital marketing channels to generate leads.

Hubspot Revenue

hubspot-revenue
Hubspot generated $2.17 billion in revenue in 2023, compared to 1.73 billion in 2022, $1.3 billion in 2021, and $883 million in 2020. In 2022, about 98% of Hubspot’s revenue came from subscriptions, which generated $1.69 billion in revenue.

Hubspot Net Losses

hubspot-net-losses
Hubspot reported $176 million in net losses for 2023, compared to a reported net loss of $112 million in 2022, a net loss of $77 million in 2021, and a net loss of $85 million in 2020.

Hubspot Revenue Breakdown

hubspot-revenue-breakdown
Hubspot generates most of its revenue from subscriptions. Indeed, in 2023, about 98% of its revenue came from subscriptions. In 2023, Hubspot generated $2.12 billion in revenue from subscriptions vs. $46.7 million from professional services.

Hubspot Subscription Business

hubspot-subscription-business
The subscription revenue cost structure is quite effective. In 2023, on a $1.83 billion in subscription revenue, the company reported $290 million in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a $1.83 billion in gross profits, compared to $1.43 billion in gross profits from the subscription business, in 2022.

Hubspot Professional Services

hubspot-professional-services-business
The professional service business is run to sustain the subscription business. Indeed, in 2023, on $47 million in professional services revenue, the company reported over $54 million in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a gross loss of over nearly $8 million.

Hubspot Employees

hubspot-employees
Hubspot had 7,663 in 2023, 7,433 employees in 2022, 5,895 in 2021, and 4,225 in 2020. The company has grown from 2,638 employees in 2018 to 7,433 in 2022.

Hubspot Revenue Per Employee

hubspot-revenue-per-employee
Hubspot generated $283,209 in revenue in 2023, compared to over $232K per employee in 2022, over $220K in 2021, and $209K in 2020. Hubspot’s revenue per employee grew from over $194K in 2018 to $283K by 2023.

Hubspot Customers

hubspot-customers
Hubspot had over 205K customers in 2023 and 167K in 2022, compared to over 135K in 2021 and nearly 104K in 2020. The company grew from over 56K customers in 2018 to over 205K customers by 2023.

Hubspot Revenue Per Customer

hubspot-average-revenue-per-subscription-yearly
Hubspot generated an average of over $11K of subscription revenue per customer in 2023 and 2022, compared to over $10K in 2021 and over $9.5K in 2020.

Hubspot Sales & Marketing vs. R&D

hubspot-sales-and-marketing-vs-r&d-costs
In 2023, Hubspot spent 49% of its revenues on sales and marketing efforts and 28% on R&D efforts, compared to 51% in sales and marketing efforts and 26% in R&D efforts in 2022.

Read Also: Salesforce Business Model, Slack Business Model, C3.ai Business Model, SaaS Business Models, IaaS-PaaS-SaaS, AIaaS Business Model, Cloud Business Models.

Read Next: Competitor Analysis, Amazon Competitors, Tesla Competitors, Zoom Competitors, YouTube Competitors, Netflix Competitors.

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