Enterprises must change or die, says Benioff

Enterprises must change or die, says Benioff

Summary: Enterprises that don't embrace social face a gruesome fate in the next few years, says Salesforce.com's CEO Marc Benioff. But what about cloud?

SHARE:
19

We've heard this message before from Salesforce.com CEO Marc Benioff, of course, but it was delivered with some especially gruesome imagery in a Q&A session with media and analysts at Cloudforce London today. Answering a question about companies that don't embrace Salesforce.com's message of the social enterprise, Benioff warned: "They're not going to be around in five or six years. The world is just gonna snap them in the neck." Perhaps it was the jetlag speaking.

That set me wondering what the priorities should be for such companies. Benioff cited Toyota as an example of a company that had got the message and embraced the social enterprise by putting Chatter in its latest models. But while the social component is being delivered from the cloud, the motor company's core systems are still running firmly on-premise. In the morning keynote, Benioff shows off a diagram on a napkin that describes the social infrastructure of Burberry, another recent 'social enterprise' convert. Clearly visible at the foot of the scrawled schematic is the interface to the company's SAP business systems.

Another questioner at the media lunch crystallized what was going through my own mind: Did the new emphasis on social mean that cloud was now less of a focus? "We were born cloud but we've been reborn social," answered Benioff. The most important strategy for enterprises is to connect to their customers using social, and the traditional vendors are not supporting this, he said.

See also:

It was clear from his answer that Salesforce.com has made a choice. The imperative for customers of its software is to forge that social connection with their own customers. Salesforce.com delivers an infrastructure that supports those connections and also, via Chatter, carries the collaboration inside the enterprise to connect with their existing on-premise systems. That's plenty enough sales opportunity right there to be going on with.

The corollary is that Salesforce.com is not really bothered for now whether customers replace those internal back-office systems with cloud equivalents. It has partners like Kenandy, FinancialForce.com and others that can test out the opportunity to go further in that direction and it's happy to leave them to it.

The message, then, is that enterprises wanting to avoid the imminent sudden death that Benioff predicted will do enough if they replace on-premise front-office and collaboration streams with the Salesforce.com cloud offering. They don't have to move all their systems to the cloud; it's still OK to own servers, so long as they stay firmly out-of-sight in the back-office.

I couldn't help wondering, is that really true? What happens when you've implemented a cloud-based, customer-focused social strategy in your front office? How can you survive your customer's round-the-clock, real-time demands for instant response if your back-office systems are still operating in the dark ages? You may have avoided the trauma of sudden death and bought yourself some time. But have you not instead condemned yourself to a slow, lingering death instead? (One that you have to endure in full, interactive sight of your customers).

This was the part of the answer I had expected to hear from Benioff but didn't. You have to go social, and mobile — those are the priorities, the goals to focus on first and foremost. But if you don't also have a strategy to go cloud, you'll still lose the race in the end because you will reach a point when those internal systems just can't keep up any longer. For the next few years, established businesses are going to have to go through change after change after change; not just putting social lipstick on the customer interface but reforming the way their businesses operate from front to back. Change or die isn't a one-off choice, it has to become a way of life.

Topic: Enterprise Software

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

19 comments
Log in or register to join the discussion
  • five or six years?

    A little dire. Granted, he is peddling a product. But just because an enterprise does not buy his product or a competing social product like Newsgator or SharePoint does not mean that the company will collapse in half a decade.
    Your Non Advocate
    • RE: Enterprises must change or die, says Benioff

      @facebook@...
      exactly. "Follow my lead, buy our product or you will go the way of the dinosaur."

      he is just pushing his business out there
      tiderulz
      • RE: Enterprises must change or die, says Benioff

        @tiderulz You should see his presentations...WOW is he out there. Would you like to have your ERP like facebook - that's what he advocates. The problem is or what he maybe fighting is there seems to be a decline in social network usage... I'm trying to find where I read that.
        ItsTheBottomLine
  • what a load of c**p

    So he is telling us that oracle, SAP and others are gone tomorrow if they don't go cloud or social? What is he smoking?
    richphx
    • RE: Enterprises must change or die, says Benioff

      @richphx - I don't think that's what Marc was saying. You're kind of mixing together something Marc said with a point Phil is making. Marc is saying go social or die - he doesn't really comment on moving back office to cloud. Phil is saying maybe companies need to also be concerned about their all-up cloud strategy, not just going social.
      kayvaan
  • What else WOULD he say?

    I've always believed that you don't take advice from someone who stands to benefit from that advice.
    ron.cleaver
    • RE: Enterprises must change or die, says Benioff

      @ron.cleaver@... Duuuhhh - and let me tell you - we have the product, BOY is it expensive! and not as "quick" as they make you think it is.
      ItsTheBottomLine
    • re:

      We have many more [url=http://www.cheapuggsok.net/][b]cheap uggs[/b][/url] look at donning about our disregard at all times. This specific look at is actually therefore frequent you can get just about [url=http://www.cheapuggsok.net/][b]cheap uggs[/b][/url] everywhere.
      iwdy23
  • RE: Enterprises must change or die, says Benioff

    Meh! I don't believe him and neither should a business
    12312332123
  • RE: Enterprises must change or die, says Benioff

    Hi Phil, Great post. My view is that cloud enables social and mobile: http://lauriemccabe.wordpress.com/wp-admin/post.php?post=1478&action=edit
    Laurie McCabe
    • RE: Enterprises must change or die, says Benioff

      @Laurie McCabe
      You need to remove this message of fix the link. It goes to the login page for your wordpress website.
      mbennett3
  • Why would your Back Office need to be cloud just to support social?

    in the Front Office? Why do you think that on-premise deployments of Oracle, SAP, etc. would simply begin to fail? Any decent integration between this hypothetical front office experience would allow a well-deployed back office system to fulfill a company's obligations. Does cloud computing all of a sudden allow a company to operate 24/7 in a way that taking in-house responsibility for running and maintaining an application doesn't? (And really, does having a tie between Chatter or Facebook and your order-to-cash or help desk entry point really count as a full-fledged social enterprise?)

    I think you and Benioff are both smoking.
    JKRob
    • RE: Enterprises must change or die, says Benioff

      @JKRob

      In all fairness, Benioff is selling a cloud-based social platform. However, there is a wide spectrum of social forums that can existin in private clouds. Sharepoint and Newsgator come to mind. Back offices can benefit by finding internal resources to staff projects or transfer knowledge. Social networking is a powerful tool to that end.
      Your Non Advocate
  • RE: Enterprises must change or die, says Benioff

    Gotta believe these guys - that's why all of our employees have a CompuServe account and a CB radio.....
    egads1
  • The trick is to sell something that people want.

    That being the case, it doesn't matter whether your website is social, unsociable, antisocial or nonexistent. If people want it, they go to the right shop to buy it!
    peter_erskine
  • RE: Enterprises must change or die, says Benioff

    no time to read the whole article, but here are 2 thoughts.
    First. The headline of the article, "Enterprise must change or die."
    That goes without saying anything else. It is called Evolution.
    Second.
    The author wrote, " Benioff cited Toyota as an example of a company that had got the message and embraced the social enterprise by putting Chatter in its latest models.:

    ...that had got the message? ESL? Or do you not know how to write?

    "..had got.."
    richvball44
  • RE: Enterprises must change or die, says Benioff

    I dunno about lacking social media killing them. It's nice to have, but not something that would make or break the budget of a business.

    Refusing to upgrade aging computers with soon to be unsupported OSes, on the other hand, might.
    CobraA1
  • RE: Enterprises must change or die, says Benioff

    Nice post, Phil. Building on the "go cloud or go home" idea, what about "go multi-cloud or go home"? That is, just as a single-vendor lock in has inherent risks, does a multi-vendor cloud strategy have merit?

    Forbes seems to think so and has coined the term: Cloud Hubbing. Does this resonate with folks?

    http://www.forbes.com/sites/ciocentral/2011/08/10/why-you-need-a-cloud-hubbing-strategy/

    Ed Sarausad
    ed@cedexis.com
    ed_sarausad
  • Enterprises must change; but not to Saleforce

    If you buy packaged software it doesn't matter whether it is installed on-site or on a remote server. It is still software written for someone else's business and their business interests, not for yours.

    Packages are a recipe for inflexibility and desperate improvisation.
    jorwell