Early in its history, Oracle started out as a fast-growing database start-up, becoming a case study in Geoffrey Moore's classic Silicon Valley entrepreneur's textbook, Crossing the Chasm. It was only later that it added an enterprise application stack and assorted platform components to eventually become the ungainly behemoth we know today.
Is Salesforce.com following a similar path? It started out as a fast-growing SaaS application company. Later it began to extend its reach as a cloud platform. But until recently, the extensions to that platform didn't encroach on its large ecosystem of partners. Whereas the new functionality announced around this year's Dreamforce conference trampled clumsily all over their territory:
- Salesforce Identity is planted squarely on the home turf of Okta's core offering
- The Marketing Cloud appropriates a term once popularized by Marketo and extends into functionality offered by a long list of similar vendors such as Eloqua, Hubspot, Pardot and others
- The file-syncing Chatterbox feature is both a slap in the face and a slight on its name for partner Box. Nor, do I imagine, was Google too pleased.
- Work.com is a challenge for HCM vendors building apps on the Salesforce platform, as well as longstanding performance management partners such as Xactly.
It's as though Marc Benioff and his management team suddenly realized that, in their quest to soar past $3 billion and aspire to $10 billion in annual revenues, they would have to graze several billion-dollar-plus opportunities on the front lawns of its closest allies. Pretty ruthless, huh?
But then maybe that's what it takes to succeed in the cut-throat universe of enterprise software. It's not for nothing that partnering with category leaders is traditionally known in the IT industry as 'dancing with the elephant'. As I wrote in my conclusion to the recent ZDNet debate on Salesforce.com's prospects, Oracle is the prime example and obvious model here. If it had never moved beyond its database roots into applications, ultimately swallowing arch-rival Peoplesoft in a hostile acquisition battle, it would never have sustained its breakneck growth and become the powerful industry force it is today.
Do not underestimate the extent to which enterprise IT buyers have dictated that trajectory. It's not just the desire for the simplicity of dealing with a single supplier instead of many — to have 'one throat to choke' when it comes to support, integration and upgrades. It's also the ease and familiarity of a single sales relationship that covers the core set of IT needs. So long as the market offers enough of a choice to be able to credibly threaten to walk away during price negotiations, buyers will habitually renege on those threats and stick with the relationships they know rather than embark on the risk and disruption of new, untested relationships.
So why be surprised when the leading light of the cloud revolutionaries eventually starts morphing into a multi-tenant reincarnation of the monolithic old guard? Meet the new boss, Same as the old boss. Until the buyers change their behaviors and preferences, the gravitational pull of old-world ways will inevitably divert and distort the charge of the new. Cloud still lacks the mainstream sway to bring about fundamental change. Even if it were prevalent enough, perhaps the advantages of size would still favor the single-platform behemoths over more diverse alternatives.
The trouble is, I can't help wondering if that's what we really want from the cloud. Way back in 1998, I wrote and published a report about the emergence of cloud computing (we didn't call it that at the time, of course, rather "An emerging model of online computing pioneered by application service providers (ASPs)"). One of the most widely quoted sentences in that seminal report predicted that once this model became established, "[Users] will access the applications they need, on demand, from online providers who will charge them by the second for the precise value of the features and resources they choose to use."
For all that I wish Salesforce.com well, I keep on being pulled back to that original vision, no matter how idealistic and impractical it may still seem today. My natural inclination is against the all-inclusive platforms that lock customers into convenient yet costly restricted choices and grant market hegemony to giant vendors. I want to see cloud realize the innovative potential, freedom of choice and cost efficiencies of a truly open, competitive, on-demand services landscape. That's why, even while I salute Salesforce.com's remarkable achievements, I personally keep rooting for the smaller guys, the loosely coupled guerillas that continue to push the boundaries and stretch the envelope of the cloud and all that it enables.