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5/9/2007
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Software 2007: 'Software As A Service Is Evolving'

Salesforce.com's Marc Benioff and representatives from FedEx, Unilever, Motorola, and Walt Disney highlight their success with on-demand services.

At the Software 2007 conference in Santa Clara, Calif., on Tuesday, Salesforce.com CEO Marc Benioff preached the software-as-a-service gospel.

"We're here as an agent of change in the industry," Benioff said in a keynote presentation.

In contrast with the mid-20th century mainframe model championed by IBM and the late 20th century client-server paradigm advanced by the likes of Microsoft and Oracle, software as Benioff sees it has evolved into an on-demand service.

"Why can't all enterprise software be like Amazon.com?" Benioff asked, describing the epiphany that led to the creation of his company. Intriguingly, his effort to replicate Amazon's service-oriented software has ended up re-creating Amazon's service-oriented infrastructure. Saleforce is selling itself as a software-as-a-service platform for application developers just as Amazon is selling Amazon Web Services as an IT infrastructure platform.

"Let's break the platform off from the applications and let's do something really interesting," said Benioff, sounding a lot like Amazon CEO Jeff Bezos in his recent evangelism of on-demand infrastructure. "Let's empower the entrepreneur."

But it's not the entrepreneurs Benioff has to seduce. Startups are already on board for on-demand software. They can't afford anything other than pay-as-you-go computing and they're presold on the concept because it has been proven by Amazon, Google, eBay, and Salesforce. It's the cautious enterprise IT leaders that Benioff needs to woo.

Benioff described Oracle's business model as "get the money and run, or something like that." He insisted that Salesforce "live[s] with customers every day and it's a much more intimate relationship.

"Salesforce is more like a marriage," Benioff insisted. "Oracle is more like a one-night stand."

With an ever-increasing number of customers wedded to Saleforce, including ADP, Cisco, Dell, Merrill Lynch, Nokia, and Sprint, Benioff's company certainly appears to be tying the knot with abandon.

Yet Benioff acknowledged that when it comes to selling to large enterprises, Salesforce's on-demand charms don't necessarily entice CIOs. For that, his company has a traditional enterprise sales force that goes before hard-to-get IT leaders on bended knee, not unlike Oracle.

Following Benioff's presentation and a brief question-and-answer session, four CIOs arrived on stage: Neil Cameron, CIO of Unilever; Robert Carter, executive VP and CIO of FedEx; Patricia Morrison, executive VP and CIO of Motorola; and Tony Scott, senior VP and CIO of the Walt Disney Co.

These are the very people that Benioff would like to convince about the virtues of on-demand infrastructure and software as a service. As it turns out, they're already won over, for the most part.

"We're embracing it," said Scott. "We use Salesforce. And we're starting to use AppExchange." He added, "What I really want to do is focus our development resources on core business problems. ...There are just lots of things we're never going to be good at and I think that some of these SaaS ideas will help us get to market faster."

"We're also an advocate of software as a service," said Morrison. "But like all business models, it's good for some things and not for others."

"Software as a service is inevitable," said Cameron. "It's coming. It's here. But it's not a panacea."

"The model is becoming ready for large enterprises," Carter said. Referring to the way in which data is becoming more portable and is less likely to be tied to specific sites or applications, he added, "Destination is going away; connection is becoming radically enabled."

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