But Salesforce CEO Marc Benioff needs to help companies figure out how to make money off connected devices and people.

Chris Murphy, Editor, InformationWeek

November 20, 2013

3 Min Read

Marc Benioff

Here's how Marc Benioff envisions his future dentist visits: His WiFi-connected, GPS-enabled Philips Sonicare toothbrush gathers usage data, so that Benioff's dentist is armed with hard facts about his oral hygiene habits before he arrives. Dentist and patient examine and discuss the data together.

Here's how my last dentist office visit went: You haven't had a cavity in awhile, Chris, so the dentist is only going to see you once a year from now on. You can still come in for cleanings every six months. Here's a free toothbrush with our logo.

Internet of Things dream, meet Internet of Things reality.

Benioff laid out his dental care fantasy at the kickoff of Dreamforce, Salesforce.com's annual marketing extravaganza. The CEO's main point is an essential one: Every company needs to be thinking about the Internet of Things. The ability to connect myriad devices, appliances, machines, and other "things" to wireless networks, and for people to be almost-constantly connected to things or companies via smartphones or tablets, provides a huge new opportunity for businesses to connect with customers.

Salesforce sees that those connections also will cause problems for companies. If you can see that my toothbrush stopped working, why aren't you sending a technician, or at least instructions for me to fix it? And so Salesforce is pitching its customer data, customer service, and marketing software to manage those kinds of problems. Benioff calls this opportunity the "Internet of customers" (piling on to Cisco's "Internet of everything" and GE's "industrial Internet" lingo.)

Benioff estimates that two-thirds of companies aren't ready for the connected, mobile, and social business environment. "The problem is this: Most companies don't understand their customers," he said.

Understanding customers isn't enough, though. Benioff's sales pitch is that "behind every [connected] device there's a customer." But behind every customer there's a business model, and a lot of companies don't see how they can wring cash flow out of an Internet of Things initiative.

Take my dentist office, where they're clearly trying to spend less time on me, a low-profit customer. How would my tooth-brushing data make the office more money? Perhaps at some point such data becomes table stakes for keeping customers, or maybe it's a way to attract a premium clientele. But for now, data analysis probably looks a lot like extra cost with no added revenue to my dentist.

The Internet of Things is not a hard concept for IT leaders to grasp -- it's just a really big network. Where they need help from vendors such as Salesforce is with the ROI. GE CEO Jeff Immelt is now wrapping an ROI-focused message around its industrial Internet vision: "no unplanned downtime." Put more sensors on your GE-manufactured machine, track performance data, and fix the machine before it breaks.

Salesforce went off track at Dreamforce last year by centering it on social networking, encouraging companies to become "social enterprises." I'm not the only one who didn't get how or why a company should become a social enterprise, even if you think Facebook and Twitter are darned important. Salesforce has scrapped that message in favor of its strong "customer company" focus.

By tying the Internet of Things to customers, Salesforce has picked the right target. But companies don't need help envisioning what's possible with the Internet of Things; they need help figuring out how to make it profitable for them.

About the Author(s)

Chris Murphy

Editor, InformationWeek

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in Hungary; and a daily newspaper reporter in Michigan, where he covered everything from crime to the car industry. Murphy studied economics and journalism at Michigan State University, has an M.B.A. from the University of Virginia, and has passed the Chartered Financial Analyst (CFA) exams.

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