“The only way you can make money in the cloud is through scale.” He made the comments during this week’s 2011 earnings webcast. It’s tough to check this out as there are not many publicly held companies that are pure cloud vendors in which you can isolate all the cloud financials. NetSuite has not made money from a GAAP perspective, although the company is profitable on a non-GAAP basis. And how the SAP executive would characterize Salesforce in this arena is not clear. While that company lost $7.5 million for the nine months ending October 31, it made $65.5 million for the year ended January 31, 2011 and had five consecutive years of profits before fiscal 2012. The 2011 results were good despite the fact that 48 cents of every dollar of revenue went into sales and marketing, which was $187 million higher than in 2010. The lesson here appears to be that cloud sucks up promotional dollars. Salesforce has already spent $842.2 million on sales and marketing in fiscal 2012, or 51.2 cents of every dollar of revenue. That seemed like a lot until you consider that for every dollar of revenue NetSuite got for the nine months ended September 30, it spent 51.1 cents for sales and marketing. By contrast, Microsoft’s spending in that area was 17.4 cents for the six months ended December 31 and SAP spent 20.1 cents for 2011. The name of the game is definitely buying market share.