No software as a service has a perfect record, but Salesforce.com's has been so reliable, despite the customer's rapid growth of its customer base, that business users everywhere have come to see that multi-tenant software is safe to use.
In June, as an economic recovery became a possibility, Salesforce.com stock perked up. It was trading at $40.16. Today it's trading close to $75. In other words, it's up 86%. This is a leading indicator for software as a service, for cloud computing and for Salesforce.com as a powerhouse software company of the future. Publicity stunts at Moscone Center during a Siebel Systems user group meeting are one thing. A completely reliable, high performing CRM application online is another. Salesforce.com experienced outages of an hour or more in 2005 and 2006, and afterward, established a site, Trust.Salesforce.com, that reported on the health of its own operations, so customers would know what was going on. It's become the standard that Amazon's EC2 and other cloud suppliers have tried to emulate. Five nines would be as close to perfection as most customers would expect a supplier to get. In the second quarter of 2009, Salesforce delivered 99.997% up-time for its Force.com site. Benioff himself offers plenty of tacit tribute to Parker Harris and his technology team in his book, Behind the Cloud. "I am immensely grateful to three talented developers -- Parker Harris, Frank Dominguez and Dave Moellenhoff -- who in 1999 took a risk on a 'crackpot idea,' and then built something spectacular," he wrote in his first acknowledgement at the back of the book. And there are references to Harris and the team at 12 different locations inside.
Harris now serves as executive VP of technology. Moellenhoff is chief technology officer. He and Frank Dominguez Jr. are co-founders of the company as well. A key decision they all made, despite pressure from venture capitalists, was they they would offer their software as an online service only. The financiers wanted them to give customers a choice, software as a service or software delivered in an on-premises package. The decision to go only in the direction of software as a service was a wise one. They needed to build credibility for the multi-tenant application. Having packaged software on the shelf behind them as they made their pitch would have undercut the message. Benioff, as we all know, upped the amperage by declaring SaaS was a replacement for packaged software.
Now Benioff to his credit recognizes the next market opportunity is not killing off packaged software but working with it from the cloud. The application in the cloud data center is a different beast from the application in the enterprise data center, but I suspect the Salesforce technology team has got this issue figured out as well. At the end of 2009, I offer a salute to them for all they accomplished in establishing the multi-tenant application.