On Friday, I interviewed salesforce.com CEO Marc Benioff in his spacious San Francisco office. The salesforce.com founder was in a good mood--the stock has more than doubled since the beginning of the year and growth in subscribers, revenues and profits continues to trend upwards. Many competitors big and small are trying to gain a foothold in the salesforce.com's hosted CRM applications space, but Benioff doesn't seem concerned. Like Yoda of Star Wars fame, Benioff believes he is a fight against the dark side, in the form of traditional enterprise software.
In the podcast interview I asked him about the next phase of the salesforce.com platform and his view of various competitors. We had a problem with Benioff's microphone but our audio engineer Jason Howell managed to salvage the conversation. Turn your volume up a little higher and pay no attention to the occasional sirens or ringing bell...
Salesforce.com founder and CEO Marc Benioff and Yoda
During the interview, Benioff talked about the nearly seven-year journey from conception to 351,000 subscribers within 18,700 companies. He also talks about the salesforce.com operating system [16:08] and takes shots at various competitors [18:20], including Oracle (the rest home for old enterprise applications), Siebel, SAP, Microsoft [35:33] and even Sun [42:53]. He also explains his view that Oracle CEO Larry Ellison failed to stop SAP from becoming a formidable competitor and leader in enterprise applications when he could [24:11]. "The greatest failure that larry has had in his career is the emergence of SAP," Benioff said. As expected Benioff is dismissive of Oracle's next generation Fusion project.
In general, Benioff claims that the rival companies mentioned above aren't innovative, are locked in a psychosis of the status quo and aren't focused on taking cost and complexity out of computing, while salesforce.com is leading a revolution in software with its Web hosted, multi-tenant application platform [43:23]. In many ways, salesforce.com and others with hosted applications are providing validation of software-as-a-service development and distribution model, and it's waking up the older and larger rivals, who haven't been in a hurry to disrupt their existing business models. Benioff should be looking very seriously in his rear view mirror, and I suspect he is despite his bluster. The shift has just begun.
Benioff does pay tribute to the innovation culture build by Steve Jobs at Apple [41:00]. "[Jobs] is better than all of us put together," Benioff said.
I also asked him about future directions for the company, moving into adjacent ERP categories like financials or supply chain management [8:32]. Benioff said that the company's AppExchange platform and solutions provide much of the financial functionality-–customers can throw out part or all of SAP, Oracle or Intuit, he said. He went to give a more reasonable and credible answer, saying that most customers already have robust financial systems, but they aren’t good at managing customer information.
Benioff stretched my beliefs in claiming that based on salesforce.com data on subscriber gains and losses he can predict the strength of an economy. “We’ve called the recession happening in Europe in 2001 six months before their own economists adequately predicted it—we saw a lot of customers at that point subtracting users. In other words, an increase in salesforce.com subscribers bodes well for the European community, for example. I’m not convinced on his methodology…