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On-Demand Is in Demand's (NYSE: CRM  ) hyperkinetic CEO, Marc Benioff, said on his company's conference call that the fourth quarter was "remarkable" and on-demand computing was going "into the next phase." While the enterprise software industry has been lethargic, that certainly hasn't been the case for on-demand players, such as, RightNow (Nasdaq: RNOW  ) , and others.

Companies are moving toward on-demand computing because it tends to be cheaper and easier to use. Instead of paying a lump-sum payment, a company can pay based on a subscription. And, since the software is delivered via the Web, updates are seamless.

On the news of's latest earnings report, investors pushed up the stock 13% to $15.95. In the fourth quarter, revenues surged 82% to $54.6 million. The sequential increase was 18%. Net income was $3.6 million in the fourth quarter, which was up from a loss of $765,000 in the same period in 2003. The fourth quarter also brought $21.1 million in operating cash flow, which was a 244% increase from the same period in 2003. certainly knows how to sell; in the fourth quarter, the company added 1,400 new customers and 32,000 new paying subscribers. In all, there are 13,900 customers and 227,000 paying subscribers.

The customer acquisitions are not small time; rather, has made serious inroads in major enterprise accounts. Recent customer wins include Business Objects (Nasdaq: BOBJ  ) and Sybase (NYSE: SY  ) . What's more, existing customers, such as ADP (NYSE: ADP  ) , have increased subscriptions.

Moreover, provides customers the ability to customize their CRM (customer relationship management) applications with its sforce product. For example, Time Warner (NYSE: TWX  ) has used it for its unique requirements. upped its guidance for 2005, with earnings per share at $0.11 to $0.13 and revenue from $282 million to $287 million.

Many enterprise software companies want a piece of the on-demand computing space, which is expected to be a big growth area. Despite investments and marketing -- such as from IBM (NYSE: IBM  ) -- only a few companies seem to be delivering, and according to Benioff, is becoming a standard. For the big companies to stop, perhaps the only solution is to just buy the company.

Fool contributor Tom Taulli does not own shares in the companies mentioned in this article.

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