, the new gorilla on the block

Perceptions of are constantly behind the curve: in December it was a $300 million-a-year business; by the end of this quarter it'll already be 50% bigger.

Never one to hide his company's light under a bushel, Marc Benioff has been taking pains to make absolutely sure everyone understands what it means to pass the half-billion-dollar threshold, which is set to do this financial year if it maintains its current growth rate.

There are only 40 software companies in the world in that league, he points out — and he has his sights firmly set on punching through the billion-dollar barrier too, which would put into the top 25. With little sign of any slowing in the company's rapid growth rate, the figures suggest that could happen in less than two years' time.


There was a time when CEO Benioff's ability to rouse headlines helped punch above its weight. It certainly helped get the company noticed at a time it was just another brash young startup, struggling to persuade customers to sign up to its new-fangled alternative to traditional software.

But in the past eighteen months or so the company has been through a transformation. It has maintained start-up rates of growth beyond the $100 million-a-year mark and is sustaining the same headlong charge through $100 million-a-quarter terrority. That means outside perceptions of the company are constantly behind the curve: in December it was a $300 million-a-year business; by the end of this quarter it'll already be 50% bigger.

With that backdrop, there's now a danger of underestimating if you're not careful. Even Benioff's larger-than-life showmanship isn't enough to convey just how big the company has become. is a big hitter.

AppExchange is a case in point. When I met Benioff in London this week, I put it to him that AppExchange, which launched in January, was still at an early stage of its development; too early just yet to declare it a success. But he was quick to point out that AppExchange already dwarfs many standalone software-as-a-service companies:

"More than 5000 of our customers are actually running now at least one AppExchange application. AppExchange is larger than most on-demand companies today by itself — in terms of number of paying customers and users.

"It's less than a year since I even used the word. In our industry people always overestimate what you can do in one year and underestimate what you can do in one decade. In this case we underestimated what we could do in one year."

The example drives home how much momentum now possesses. It has a huge, extraordinarily supportive and still rapidly expanding customer base. It is financially strong. Its internal resources have reached a level where it can drive development across a broad front.

Benioff told me the fruits of that development effort will astonish observers and competitors when the details are unveiled at the company's DreamForce conference next month:

"I think when you see what's going to happen at DreamForce you're going to be really surprised what the potential is for AppExchange. It will take AppExchange and its capabilities and technology from here," and he drew a line with his hand at shoulder height, "... to here," drawing a second line, above his head.

"This will be another level. People will have to sit back and say, just like they did with AppExchange, 'What does this mean for the industry?' and 'What does it mean for on-demand?'. All of the competitors and the whole market will reshuffle again. We're very confident about that."

The introduction of AppExchange certainly gives the opportunity to expand beyond its core sales force automation product, to become an application platform that touches every employee in a business. I would still argue that there are other companies in the on-demand sector that might challenge's leadership. But they're currently well behind, either in terms of how far they've come or their present rates of growth. And is not giving them any breaks. Its continued growth and product innovation shows no signs of flagging.

I asked Benioff whether any of his competitors keep him awake at night, and it was clear from his answer that he recognizes the biggest challenge faces at the moment is managing its own growth:

"The number one issue for us is managing our own internal growth and capability and execution. When you're growing as fast as we are, it takes a lot of work to keep all the trains running on time — it's a lot of execution."

So far, though, the trains have been arriving at the station on time. I've been impressed over the past year to see the breadth and depth in's management team, and the newest additions continue to impress. Competitors cannot count on this venture going off the rails.

The on-demand industry now has its first 800lb gorilla, as defined in Geoffrey Moore's classic writings about tech industry entrepreneurship. still has to battle with the established giants of the software industry — Microsoft, Oracle, SAP and others — but in the on-demand sector it has established a commanding lead that will be very hard to dislodge.

PS: I have published a disclosure page, which lists my current and recent engagements. My clients include current competitors and partners of However the views expressed above are entirely my own.