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9/21/2012
08:34 AM
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Salesforce.com's Benioff Preaches To New Flock: CMOs

Marc Benioff wants marketing to be Salesforce's next $1 billion business. To get there, he's jumping right into the growing tension between IT and marketing execs.

Oracle vs. Salesforce: Social Acquisition Face-off
Oracle vs. Salesforce: Social Acquisition Face-off
(click image for larger view and for slideshow)
In his keynote, Benioff brought up George Zimmer, CEO of Men's Wearhouse, who says Saleforce.com tools are helping his company find out what millennials like and don't like about his stores, which succeeded originally with baby boomers.

"You're gonna like the way Salesforce works, I guarantee it," Zimmer quipped.

Benioff's special conference guests during the week, from Richard Branson to Tony Robbins, pack plenty of star power. But the subtext of the week is definitely IT's star: Is it rising or falling?

CMO Power: Fact Vs. Fiction

Is the CMO truly becoming the No. 2 officer in the company, right behind the CEO, as Benioff proclaims?

InformationWeek columnist Larry Tieman stirred debate in a column earlier this year that outlined why he believes CMOs and CFOs will rule above CIOs. Disruptive market forces are diminishing the business need for a CIO, and increasing marketing's importance and ability to go around IT, he said. "Those who argue that there will always be a need for a CIO don't understand how many CEOs are asking why this position needs to be part of the executive team," Tieman wrote.

Of course, the smartest CIOs are already plugged into the need to be business partners of a new kind. Among our recent InformationWeek 500 award winners, just look at the innovative social media work being done by Robert Urwiler, Vail Resorts' CIO and by Filippo Passerini, Procter & Gamble's business services group president and CIO. Passerini's team is presenting real-time data in decision cockpits to speed business decisions.

As for the Gartner CMO data that Benioff keeps touting, look closely--many people fail to supply the context, says analyst Frank Scavo, president of Computer Economics, who was on hand at Dreamforce to hear Benioff's plans. His research firm focuses on metrics for IT management.

"I am skeptical about this prediction," Scavo said. First, Gartner provides, as evidence, that the typical CMO budget is 10% of revenue, whereas the typical IT budget is 3.6% of revenue, he said, adding that both sets of numbers vary widely by industry. But, 100% of the IT budget is for IT products, services, and salaries, whereas only a fraction of the CMO budget is for IT, he said.

"What we have here is mostly a matter of definitions. If you count everything that the CMO does that somehow involves a computer, perhaps you could get close to the CIO's budget. But if you really compare apples to apples, I doubt that the CMO budget for technology would come anywhere close the CIO's budget for IT throughout the organization," Scavo said.

However, the general trend Benioff is pointing out is correct, Scavo said. Many products, such as automobiles and medical devices, now have huge amounts of embedded IT. So in some companies, you could argue that the product development organization spends more on IT than the CIO does. This shows how pervasive IT has become and why CIOs must continue to broaden their business focus, he said.

Step back and look at what Tieman and Scavo are saying. Now, consider whether your businesses are buying into Benioff's marketing-focused vision. One point of interest: Look at his collection plate.

Salesforce will be the first $3 billion enterprise cloud company, Benioff said, and Salesforce.com will also soon hit its first one billion transaction day.

Benioff sells his vision much more passionately than other tech CEOs and he speaks in a language your business colleagues understand. Benioff hasn't said CIOs are not in the room anymore. But know this: he will sell to your company, whether you're in the room or not. He will sell to the disciples who are buying. It's up to IT leaders to decide whether to keep feeding the CIO/CMO tension, or run smarter and faster alongside business partners.

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