Destroying Oracle and SAP: Show us the Money, Marc
Marc Benioff promises to "destroy Oracle and SAP", according to a recent Business 2.0 article. He's going to get his chance to put his money where his mouth is next week, when the Salesforce.com Dreamforce circus opens in San Francisco. The hyperbole of destroying the top-end of the enterprise software market aside, Benioff has a lot to prove in order to show that he's even begun to make good on his boast, much less start to actually do something about it.
Here's the problem: Benioff's SAP/Oracle "killer" is AppExchange, sort of a Web Services meets On-demand marketplace where software companies can display -- and sell -- bolt-on applications and functionality that extends the usefulness of the standard Salesforce.com suite. At Benioff's last big AppExchance shindig last May, lots of partners came out to show their wares, and lots of users sung their praises.
It all looked good, except for one thing: no money. That's right, AppExchange wasn't as of last spring making any appreciable revenue for any vendor I spoke to. And no one at Salesforce would deny that this little problem existed. Nor would the customers I talked to acknowledge that they looked towards AppExchange as the place to buy their next piece of functionality -- the ones I talked to largely saw it as a sandbox, albeit a good one, but mostly that. In other words, they kept their credit cards safely tucked inside their wallets.
Meanwhile, the preponderance of AppExchange partners I talk to are interested mostly in signing on to the Benioff hype machine and doing "proof of concept" development. Translation: we're making money elsewhere, thanks for the ride.
So, if you're taking Benioff even remotely seriously in his quest to be the undertaker of Enterprise Software, make sure that you look beyond the hype to what really defines success or failure: real revenues for the AppExchange partners. SAP and Oracle partners can and do make millions in their respective ecosystems, "destroying" these two companies will require an ecosystem that is even more robust.
Right now the AppExchange ecosystem seems to be floating mainly on air, hot air at that. Only when some hard dollars are being exchanged in AppExchange will there be even the slightest chance that Benioff could do more than talk about taking market share from his self-proclaimed rivals. Until then, that's what destroying SAP and Oracle is really all about: talk.