This may be news for some newbies in Silicon Valley, but San Francisco has not always been a hotbed for technology companies. Salesforce helped to change that, while ushering cloud software into a prominent and growing position in the SV150, the annual Mercury News ranking of the largest Silicon Valley technology companies by revenue.
This year s SV150 is the 30th produced by the Mercury News business staff, but it wasn t until the 27th edition, in 2012, that companies from San Francisco began to be included in the list. As former Merc columnist Chris O Brien – miss you, buddy – pointed out at that time, we expected there to be some pushback from regional experts: Silicon Valley had long been mapped out as just the South Bay, with some Peninsula coverage, while San Francisco was home to traditional non-tech powers such as Wells Fargo, Gap and Levi s.
However, the growth of Salesforce and a gaggle of hot, venture-backed startups had changed that, and the decision has been backed up by the performance of S.F. companies since. Salesforce debuted on the 2012 list at No. 31 and has steadily risen through its debut in the top 20 this year, as staff writer Queenie Wong tracked in her SV150 feature on the company.
Five other S.F. tech firms joined Salesforce on that 2012 list, with a fresh whiff of youth from most, like Yelp and Zynga. Since, that number has grown every year: In 2015, 13 companies made the list from San Francisco, including debuts from LendingClub and Glu Mobile. That gives San Francisco the fourth largest total of SV150 companies in the Bay Area, behind 34 from San Jose, 22 from Sunnyvale and 17 from Santa Clara.
Salesforce was also early to cloud software, also known as software-as-a-service, but has likewise been joined by a growing force of similar companies on the SV150. While Oracle s Larry Ellison loudly doubted the idea of housing software on remote servers and feeding it to companies on a subscription basis in Salesforce s early years, he has now changed his tune and is chasing cloud customers in an attempt to catch up to his former lieutenant, Salesforce CEO Marc Benioff.
The reasons are clear: Oracle and fellow cloud-adoptees Adobe and Intuit have found more investor support as they transition to SaaS options, and rivals who launched as cloud natives have been storming Wall Street and the SV150. When Salesforce made its 2012 debut on the SV150, NetSuite was the only other prominent software company with a pure cloud focus; in the past three years, prominent young public companies like Workday, Veeva Systems and Marketo have joined the list while the traditional powers scramble to follow a similar path.
With Salesforce adding more than $1 billion to its revenues each of the last two years, and a new generation of workers flowing into the Bay Area with dreams of hanging in the Mission and Marina instead of San Jose and San Mateo, the move toward cloud software and San Francisco is unlikely to slow down.
Photo: Salesforce.com CEO Marc Benioff at Dreamforce, the company s annual developers conference, at the Moscone Center in San Francisco on Nov. 19, 2013. (Josie Lepe/Bay Area News Group)