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10/29/2009
09:05 PM
Charles Babcock
Charles Babcock
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Benioff Discloses All In 'Behind the Cloud' Except...

Five copies of "Behind the Cloud" have arrived at my desk, two intended for fellow IW staffers and three for me, an embarrassment of riches. It's Marc Benioff's book on how Salesforce.com was created and built into a successful company. I am reading it avidly… but some disclosures will apparently have to wait for the sequel.

Five copies of "Behind the Cloud" have arrived at my desk, two intended for fellow IW staffers and three for me, an embarrassment of riches. It's Marc Benioff's book on how Salesforce.com was created and built into a successful company. I am reading it avidly… but some disclosures will apparently have to wait for the sequel.First of all, I am interested in how Benioff came up with the idea of the Death of Software or End of Software, as he more frequently refers to it. He launched it at a time when it was inescapable for most companies to adopt a big database system and an ERP system, a massive supply chain integration package that would cost a fortune to buy, a fortune to install, a fortune to maintain and yet another fortune to replace. There were few alternatives back when Salesforce.com was launched. There are still precious few today, 10 years later. The End of Software and its replacement by online services doesn't appear as far off now as it once did, but at the same time it's still not a sure thing. How are we going to get there? You'll not learn much about that. You will learn instead how Salesforce.com got to its first billion. In the long run, I think it will only be through the advent of a richer form of cloud computing -- a form that is not yet on the horizon -- that we'll escape the mire represented by minutely configured, frequently customized, packaged applications that become legacy systems almost as soon as they come out of the box. Once installed, it's nearly impossible to replace them.

Even Salesforce.com's CRM software as a service has its limitations. You're pretty much dependent on the architecture that Salesforce.com conceived, regardless of what you might want to do. Software as a service is recognized as one aspect of cloud computing, hence the title to his book, but I have read much of the book without the satisfaction of finding out what Benioff thinks is going to happen next. I expected to find something on that score, given the title.

Some things I did find out: Benioff is a sincere admirer of Steve Jobs, stemming from the days he worked as an intern at Apple and observed Jobs walking around the company, inspiring by example. Far from believing that integrated applications are the next big thing, Larry Ellison, Benioff's mentor, "believed that Salesforce.com was the next big idea and invested $2 million" in it, Benioff writes. I knew Ellison was an investor, never knew how much. He's made an even bigger investment, let's say, in integrated apps. The $2 million looks like a hedge, to me.

Benioff got the idea for Salesforce.com while swimming amidst dolphins in Hawaii. So the first offices he chose for it in 2001 were in the Rincon Center in San Francisco, a building with dolphins on its exterior. As the small Salesforce staff moved in, Jim Gray, the respected computer scientist lost at sea in 2007, worked nearby at Microsoft's research lab. He sent Benioff a message: "There goes the neighborhood." The Salesforce.com launch party at San Francisco's Regency Theater in early 2001, occurring at the height of the dot.com excess, cost $600,000 to stage. The band, the B-52s, represented a $250,000 expense. I don't know why they don't have parties like that anymore.

"A few months later, almost all of them (dot.coms) came crashing down. As the dot-com rush panned mostly fool's gold, many critics and colleagues wondered aloud about the future of salesforce.com," Benioff writes.

They shouldn't have. With a gift for promotion and an idea whose time had come, Benioff would build Salesforce.com into the powerhouse of online applications. His book is a business playbook of how he went about this, the confrontations he chose, the stunts he staged, the message he resorted to to get the idea of on-demand applications across.

It's a text book case of how to do it, but I don't quite believe the guidance. Only a few could pull it off, not anyone, as Benioff generously suggests. As more and more entrepreneurs resort to these tactics, they will get swallowed up in the noise. My wish is that, in addition to its promotional insights, the book was more in front of the cloud in its predictions of where things are headed.

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