Cloud // Platform as a Service
Commentary
12/2/2011
08:02 AM
Doug Henschen
Doug Henschen
Commentary
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Benioff's Dream: Toppling Microsoft, Oracle, And SAP

Salesforce.com's CEO expounds on the social revolution, cloud computing and his goal of creating a $10-billion-a-year company.

Salesforce.com CEO Marc Benioff loves to map out the arc of enterprise IT history during his keynotes, narrating the evolution from mainframe to client-server to the rise of the Internet and on to today. He did it again this week at the company's packed, 10,000-attendee-strong Cloudforce event in New York. And as he's been doing all year, he presented social networking and cloud computing as inevitable next steps for IT.

Benioff has adroitly positioned Salesforce.com at the center of both of these trends, but the social part is actually a fairly recent development. The company spent 12 out of its 13 years in business leading the no-software, software-as-a-service movement. Subscriptions for SaaS-based CRM are still the core business, but between last year's launch of the Twitter-like Chatter service and this year's acquisition of social media monitoring company Radian6, Salesforce is trying to cast itself as the innovator to choose to transition to a socially connected business approach.

Following his two-and-half hour keynote this week, Benioff spent another hour answering questions in a room packed with analysts and journalists. He tells them the move to promote what he calls "the social enterprise" has transformed Salesforce.com into a strategic technology vendor.

"The social enterprise is a CEO solution because it means getting closer to customers and products and the market," he says. "We've elevated the conversation, and we're now talking to executives about how they can transform their companies."

[ Want more on Benioff's social enterprise mission? Read Salesforce.com's Social Enterprise Vision Will Cost You. ]

With success, Salesforce and its gregarious leader have been elevated to a higher media profile. In July, Forbes put Benioff on its cover, describing him as "Mister Disrupter" and Salesforce as "the most innovative company in the world." In an interview with Charlie Rose aired this week, Benioff was expansive yet self-deprecating, boiling down his success to copying the innovations of Facebook, Google, Amazon, Twitter and other consumer Web innovators and recreating them for the enterprise market.

On national television, Benioff is mostly polite about competitors and downright complimentary about his ex-boss and "mentor" Larry Ellison. But he also says one of his goals is to "topple the Microsofts, Oracles and SAPs and those old business models."

Salesforce is succeeding, he tells Rose, because the company constantly reinvents itself, applying the Zen Buddhist principle of approaching new things with "a beginner's mind." Steve Jobs succeeded with computers and iPods and iPhones and iPads, he says, because he treated each new device as a unique challenge. Microsoft failed, he asserts, because it tried to use Windows to run all those devices.

The gloves come off during the analyst briefing. On Oracle, Benioff cites Larry Ellison's 2004 book Softwars, in which Ellison wrote that "it's easier to write checks than to write software." The line was meant as a criticism of Computer Associates, which at that time was the scavenger of the industry, by Ellison's estimation. "I don't think Larry realized he was prophesizing the future of his own company," Benioff says. "Drawing straws to decide what company to buy next is not a strategy."

Asked about the threat of Microsoft's Azure cloud computing platform, Benioff quips that Microsoft has tablets and mobile phones, too. "They have a lot of them somewhere in a warehouse... but they've lost their relevancy," he says. "Windows 8 is coming and it's a big 'who cares?'"

When the topic is competition, you can see Benioff's dark side. The angel on his other shoulder habitually credits others for Salesforce.com's success.

During the analyst and press conference, Benioff introduces and heaps praise on one lieutenant after another. Alex Dayon was CEO of InStranet before it was acquired by Salesforce in 2008, but he stayed on to lead CRM and applications. Byron Sebastian was CEO at Heroku before it was acquired this year, and he now leads Salesforce development platforms. Marcel LeBrun was CEO of Radian6 before it was acquired, and now he leads all Social Marketing Cloud initiatives.

It's to Salesforce.com's credit that it retains talent where so many other vendors seem to lose the visionaries after acquisitions. Benioff also singles out George Hu, a 10-year company veteran recently promoted to chief operating officer. Hu is quick to point out that Salesforce has also innovated internally with developments including Chatter and the coming touch.salesforce.com HTML5-based, tablet-and-mobile-device-friendly interface.

Benioff winds up the press conference by explaining that his long-term goal is to grow Salesforce.com into a $10 billion annual-revenue business. The company will surpass $2 billion in revenue this year and it recently told equity analysts that it forecasts a $3 billion run rate in 2012.

Questioned about the company's stock price, economic headwinds and the wisdom of raising Salesforce.com's revenue forecast, Benioff flushes a bit and the dark side is showing again. He launches into a long, plaintiff history of the stock price swinging up and down with, he says, no apparent connection to actual performance.

"Stock prices move around, and I don't think I should be worrying about that," he says. "All I'm doing is focusing on the customers and the market share. If my customers are happy, the company will keep growing."

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Guest
50%
50%
Guest,
User Rank: Apprentice
12/5/2011 | 4:05:10 AM
re: Benioff's Dream: Toppling Microsoft, Oracle, And SAP
I agree that it doesn't make sense to lock yourself into a vendor. Benioff isn't rebelling against the model of any of the companies mentioned. He wants to become one of them. Salesforce.com/Force.com is as proprietary as any of the companies mentioned, with the exception of Microsoft. Their APEX development platform is far from open standards. It doesn't make any sense for a company to have a "cloud" platform in which users can easily migrate away if someone undercuts their pricing. From a business perspective, open standards = commoditized products. Take it with a grain of salt.
dchasselshp5
50%
50%
dchasselshp5,
User Rank: Apprentice
12/4/2011 | 10:50:39 AM
re: Benioff's Dream: Toppling Microsoft, Oracle, And SAP
I wonder will Benioff achieve his dream. As long as the big vendors behave as indicated here http://linkd.in/uqiXVE What Microsoft, Oracle, IBM, And SAP Don't Tell Customers then maybe but what if they realise the games up and bite the bullet? When Gartner write such a revealing piece then it must be just a question of time?

On top of that the SaaS model is in my view an interim step. As business software becomes commoditised where the spread of tools such as built by UK based Procession that handle build of any business application without custom coding, code generation or compiling the model of payment will change. Conventional lease deals just like any other asset will emerge with the option to not just get back your data but get the software you have paid for? Maintenance contracts may only apply to core technology but as it becomes more stable being an optional extra becomes a risk worth taking. On going contracts will be for mentoring business to support change that this new breed of "agile software" can readily deliver.

Benioff has done great job to shake the market but the next step could be more exciting for users but a challenge for all vendors. This is just a natural journey towards maturity in business software - long over due and that article explains whyGǪGǪ?
Google in the Enterprise Survey
Google in the Enterprise Survey
There's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity products, and 69 percent cite Google Apps' good or excellent mobility. But progress could still stall: 59 percent of nonusers distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest Septermber 14, 2014
It doesn't matter whether your e-commerce D-Day is Black Friday, tax day, or some random Thursday when a post goes viral. Your websites need to be ready.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.