Behind his competitive zeal and his company's explosive growth trajectory and his high-stakes strategy to position Salesforce.com as an unmistakably full-fledged and mainstream enterprise software provider, Marc Benioff has a surprisingly gentle and sympathetic view of customer-side companies that are still resisting the cloud.
"People are riding the curve at their own pace, and that's just the way it is," Benioff said during an interview in his San Francisco office. "That's reality, and it's not necessarily a shortcoming that everybody's not seeing it the same way or jumping on board aggressively. Everybody gets there eventually."
But for traditional enterprise software companies and other IT vendors, Benioff's observations are far from gentle—and we'll get to those in a moment. What struck me most about Benioff's comments relative to the enterprise players was that he based his analyses not on some arcane technical issues or price battles or slogans, but rather on the ability to deliver innovation and change. And how the delivery of those essential qualities cannot be achieved with outdated approaches, no matter how much spin or glitzy makeup is applied.
Benioff's view is that while it's perfectly okay for customer-side CEOs and CIOs and LOB heads to take their sweet time in coming to grips with the cloud and its essence, once they're there, they're not going to be fooled by close imitations or simulations or knock-offs. Once they commit, he says, they will never go back. Which means that uncommitted software companies are spreading themselves perilously thin across the essential triangle of credibility, capability, and opportunity.
(For more analysis on Salesforce.com and CEO Benioff, please check out our "Recommended Reading" list at the end of this column.)
He sees Microsoft and SAP as stuck, inextricably, in that tar pit, while kinda/sorta-partner Oracle still has one leg squarely out on terra firma.
"Microsoft is a great company in the perspective of operating systems for PCs, and for servers, and for Office, and for Back Office—that's what it used to be called; I don't know what it's called now," Benioff said. "And Microsoft succeeded greatly because they offered a lower-cost alternative to Data General or Digital Equipment—but those companies aren't around any more. That model is finished—they're gone.
"Today customers don't need to deal with all that stuff—they can just move to the Internet, and that's where the world is headed. Microsoft's mistake has been holding on too long to an old paradigm and as it keeps trying to control things and offer a new upgrade like Windows 7 that has no enhancements. And that's not innovation and it's not good for customers.
"On the other hand, you've got Apple and Google and RIM: those companies are what the Internet is all about, and they show the promise for how going live on the Internet can help our customers change their businesses. If you're a software company and you're not looking very, very closely at that simple truth, then you're not going to make it."
Oracle fares better in Benioff's estimation, but not necessarily well. Benioff has on multiple occasions expressed publicly is admiration for Oracle CEO Larry Ellison, who is simultaneously Benioff's former boss and mentor, plus Salesforce.com's first major investor, plus the person who invited Benioff to present at Oracle Open World, plus the person who until recently revelled in regaling financial analysts with tales of the thrashings Oracle gave Salesforce.com in head-to-head competition.
To say that their relationship is multifaceted would be an early contender for understatement of the year.
"I've always had a great relationship with Oracle—I worked there for 13 years, and Larry Ellison was the first major investor in Salesforce.com," Benioff said. "I have a great deal of respect for him and for Oracle and in some cases we've been able to work together very well for customers.
"But if you were at Oracle Open World (in October in San Francisco's Moscone Center), at the bottom of the escalators that everybody had to go down every day Oracle had these giant Exadata machines—their big new Database Machines—and that's who they are. But it's also just exactly the opposite of our message. They want you to buy lots of Oracle software, and when they bring Sun aboard, they'll also want you to buy lots of hardware.
"With us," Benioff said, "there's no software and no hardware or any of the complexity that goes with that, while their approach with the Sun acquisition is all about more software and more hardware. Plus there's all the complexity and management and maintenance that goes with all of that, and all the middleware stuff like BEA and WebSphere.
"We just approach the world in very, very different ways."
While that is certainly true, Oracle and Salesforce.com seem like identical twins compared to SAP and Benioff's company: