Global CIO: Salesforce CEO Marc Benioff Has Declared War -- Are You Enlisting?
It comes down to whether you believe that Salesforce could reduce some costs for you and deliver every single bit of functionality and value that Oracle or Microsoft or SAP could.
It's one thing for Salesforce.com founder and CEO Marc Benioff to be willing to bet his company on its ability to survive a knife-fight with Oracle, SAP, and Microsoft -- after all, this business was built on feisty entrepreneurs whose innovative approaches won the hearts of customers and toppled slow-moving giants. But the much bigger issue in this drama isn't about Salesforce but rather about you: Are you willing to bet your current credibility and very likely your job on Salesforce's ability to deliver big-time applications, enduring and robust development platforms, and ongoing financial stability while Oracle and others look to stuff it permanently into a narrow niche that doesn't get much sunshine?
Benioff, quite appropriately, has been proudly and pointedly highlighting his company's huge customer wins against Oracle and SAP and Microsoft. And yet Oracle CEO Larry Ellison, with a much-longer and more-impressive track record than Benioff, says Oracle has begun winning consistently in head-to-head competition for deals in Salesforce's wheelhouse: CRM apps in the cloud. Question: Are Salesforce's wins indications of a fundamental shift in customer strategies, or a shorter-term indication of a niche play that is working very nicely?
Benioff, quite accurately, points to the lower cost of the cloud model versus the traditional on-premises software model. But Microsoft, Oracle, and SAP have begun transforming significant parts of their businesses to embrace the cloud approach and will surely narrow dramatically any price gap Benioff can now tout. Question: Can Salesforce and Benioff continue their impressive growth rates and gain breakaway momentum before those big, hungry competitors retool their offerings and begin very aggressive attempts to marginalize Salesforce?
Benioff, quite opportunistically, has been hammering the old model as expensive, inflexible, and outdated, and wouldn't his world be wonderful if his three big competitors were staying rooted in the past and limiting their customers to nothing but outdated models? But they are not: All three companies, albeit not at exactly breakneck speeds, are deconstructing their traditional models and moving into the cloud -- Microsoft's cloud revenue should top $1 billion in less than two years. Question: Will CIOs decide that the undeniable but limited benefits offered by the Salesforce model outweigh so dramatically the value of global scale and product depth and vast financial resources offered by the other three that a switch should be made?
Benioff, quite understandably, went to great pains on an analysts' call to tout the strong growth for his Force.com development platform, but at times his desire to inspire was lost in a, uh, cloud of obscurity: "Our servers are now running 21 million lines of Apex Code." Cool (I guess). Question: Do customers view Force.com as a nice-to-have complement to a compelling but narrow set of solutions, or will they view it, as Benioff hopes, as a must-have breakthrough platform that can play a significant role in transforming their organizations?
At this point, let me be very clear about one thing: Anyone who doesn't respect the hell out of what Benioff and Salesforce have achieved is either a fool or a zealously blind competitor (and I'm willing to bet that, in private, many of Salesforce's competitors also are big admirers). Let me tick off a few of their accomplishments, and these come from my own head and not from any of Benioff's presentations:
He's forced huge companies to embrace a business model that will at least in the short term lower their margins and loosen the bonds of account control. They've wanted to do this about as much as they've wanted to throw back a few shots of hemlock -- but Benioff and Salesforce made them drink up.
He's attacked as outdated and unproductive the very essence of the industry he grew up in -- "Solutions, not software!" -- and not only survived but thrived.
He's built a $1 billion-plus applications company during a time when echo-chamber experts were jadedly proclaiming, "There will be no more billion-dollar software companies." In so doing, he not only exposed some of the chattering classes as the clueless twits they truly are but also reinforced the idea that innovation isn't limited in time or place, and that great ideas brilliantly executed always will find a market.
And most recently, during a vicious downturn when most technology companies were hoping to limit quarterly revenue declines to the single digits, Benioff and Salesforce increased revenue by 34% over the year-earlier fourth quarter, reaching $290 million and putting the company on an annualized run rate of $1.2 billion.
These are, individually and collectively, terrific achievements for a 10-year-old company that now has about 55,000 customers and is out there fighting toe to toe every day against the three most-powerful software companies in the world. And yet. . . .
As if competing 24/7 against Oracle and Microsoft and SAP and being lead evangelist for a new approach to enterprise applications weren't enough of a challenge, the recession is pulling Salesforce's growth rates back down to earth. And the big concern for Salesforce is that its chance to achieve sufficient momentum to slug it out long-term with the big boys could be hampered by recession-driven spending reductions at best and customer attrition at worst.
How Enterprises Are Attacking the IT Security EnterpriseTo learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Digital Transformation Myths & TruthsTransformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.