Larry Ellison at Dreamforce?

This is completely speculation on my part but I was wondering if Larry Ellison has any intention of speaking at Dreamforce the same way that Marc Benioff spoke at Oracle Open World.  Might be fun but keep in mind that this speculation.  If you have any information I would love to hear it.

Key findings from Open World #1

This is the first of several posts on Open World.  Too much stuff to put into one so this one concentrates on blurbs of key findings from the many goings on.  I will probably need to expand on many of these.

First, flying Virgin America is like flying used to be.  Room for my knee caps is a plus, wi-fi, better food, uncrowded departure lounges, and security lines no cattle call for boarding.  My first time and I am spoiled.

Why does Larry Ellison wait until Wednesday to give his keynote.  Some people are already on their ways home by that point and they miss the significant news.

So many Oracle people walking around visibly tired by Wednesday as am I.  The sheer volume of news, presentations, briefings, meetings, demos and trying to digest it all is too much.  Tuesday night I was too tired to eat dinner.  Too tired?!  But I have pity on the Oracle people who keep a stiff upper lip and keep up this pace.  My prediction is few people in their offices on Monday.

Arnold Schwarzenegger gives a good speech, much less wooden in person, almost life-like.  Arnold really likes technology and if he could have gotten ten bucks for every time he used the word in his speech at OOW he could have balanced California’s budget.

If Carley gets elected governor will Larry invite her to OOW?  Would she come?  Larry will own Sun by then and Carley ran HP.  Hmmm.

OOW was a little cat and mouse game on the inside track.  Larry criticizing Cloud Computing at the Churchill Club followed by Marc Benioff walking into the lion’s den on Tuesday to extol its virtues and then Larry’s introduction of Fusion apps on Wednesday.

Larry played cat and mouse with IBM too challenging Big Blue to a gun fight over benchmarks.  He offered a ten million dollar prize to anyone who could best his sparc server array. Pure chutzpa, the Sun deal isn’t even closed yet and Larry’s got a dog in the fight.  Is this the beginning of the Ellison prize?

I am not a gear head but the gear introductions were impressive. Exadata 2 based on Sparc technology is twice as fast as version 1 which uses HP.  Version 1 was ONLY about 50 times (sic) faster than the fastest database servers on the planet.  Proof that Larry is slowing down LOL!

Larry (finally) announced Fusion applications on Wednesday.  He made four major announcements – Fusion, Exadata 2, a sophisticated service and support automated system that would find problems and recommend fixes for all subscribing customers proactively and Oracle Enterprise Linux rules the known universe or some such thing.  More on those coming soon.

Benioff Attends Open World

Well, that was interesting.  Salesforce.com CEO Marc Benioff just completed a speech at Oracle Open World, perhaps the ultimate example of co-opetition.  It was apparent to me early on that Marc’s purpose for being there was to refute Larry Ellison’s rant at the Churchill Club in which he compared Cloud Computing to vapor.

I got a hint earlier today when someone said that the event had been put together quickly, which to me confirmed the need to refute Larry who spoke a couple of weeks ago at Churchill.  Benioff started out by graciously telling the audience that he had worked at Oracle and attended Open World many times in his 13-year career, even presenting on the same stage he was now on.  He went further pointing out that the Oracle database is one of the key components of the Salesforce service and thanked Oracle executives for the graciousness.

But there was little doubt in my mind that Benioff felt he needed to refute Ellison’s off the cuff assertions at the Churchill Club.  He did that with ease and just when you might have thought he’d reached the end of his talk, he brought up the CIO of EMC Corporation Sanjay Mirchandani to discuss that company’s hybrid CRM approach that includes Salesforce and Oracle for on-premise CRM.  It was almost as if he wanted to say that Salesforce can play the hybrid game as well as Oracle.

I guess the Open World setting proved too much of a temptation for Benioff.  It’s in the same city as Benioff’s office.  The venue was easy to get, Michael Dell another big Salesforce customer spoke at Open World this morning and was available to be on stage with Benioff for part of the afternoon.

There’s little doubt that Benioff was able to refute Ellison but the bigger question for me was why he felt he needed to.  We haven’t seen this kind of action for many years and it makes for lively times in these challenging days.

Who’s our daddy?

I was wondering the other day about who really represents the technology movement these days.  Not that long ago there were multiple colorful personalities vying for the unofficial title of Chief Nerd (CN), now the office seems vacant.  It’s an important question and maybe it says a lot about the technology world.

For example, I called it a movement but is there really still a movement?  Was there ever a movement?  I can trace the term High-Technology to the late 1970’s but Wikipedia finds the first use of the phrase “high tech” in a New York Times story from 1957 (about two years before the integrated circuit was patented) about atomic energy in Europe.  

In the ensuing decade the phrase was used on average once per year in the paper.  Then, in 1968 there was an article about Route 128 outside Boston that used “high technology” in what I would call its modern sense.  Shortly thereafter the phrase became associated with investment, venture capital and the party was on.

Ken Olsen, founder of Digitial Equipment Corporation, was one of the first personalities to speak for or about the movement and he was eventually followed by Larry Ellison of Oracle when databases were the hot topic, then a cascade of overlapping Chief Nerds arrived on the scene.  Scott McNealy at Sun talked up reduced instruction set computing, Bob Noyce at Intel and a host of others led the charge for the microcomputer.  Steve Jobs became known as a visionary for the user experience and Bill Gates played Henry Ford knitting together hardware, operating system and software thus making computing affordable to the masses.

I know this summary is too brief and leaves many people out but I am not writing a history of the times.  My point is that each era of what should be called the high-tech epoch had at least one personality who embodied the age, more or less spoke for it and laid out the vision.  In this, the high-tech epoch was no different from the industrial revolution or the Gilded Age of the late nineteenth century.  In a sense, high-tech seems to be the culmination of those eras like the New Stone Age follows the Old (Neolithic and Paleolithic, respectively).

Perhaps one reason that no single person commands the stage today is that high technology itself has fragmented in so many directions.  People like Marc Benioff speak for the SaaS computing movement and I suppose there are be others in security, mobility, back office, and social networking but there’s too much to know for any one person to either write about it or to be the CN. 

The other possibility, and the two are not mutually exclusive but overlap, is that high-tech is over.  It’s not that technology is ending and we are entering a dark age, but the movement may simply have become mainstream enough that it has been absorbed more or less into the culture.  There is no high-tech movement anymore because we now live in a highly technologically dependent culture. 

This recession, like many before, may mark the end of eras, some trivial and others important.  On-demand computing appears to be strengthening its grip on the imagination inversely proportional to the waning attention given to conventional computing.  Other ideas are still on the horizon and include electric cars, robotics, nano-technology, competitive alternative energy, carbon sequestration and much more.  Some will work well and others will be dead ends or die out like the cell phone mounted in a car.  They are all in some sense high technologies but they take us further and further from enterprise computing and they have not yet produced a catalyzing personality. 

So the question remains, Who’s our daddy?

Benioff’s coup

Last week Salesforce.com marked its tenth year in business.  To celebrate, the company held a conference call to discuss its earnings and CEO Marc Benioff, brought presents for his investors.

The big announcement was that Salesforce had succeeded at generating just over one billion dollars in revenue for its fiscal year—the first time in history that any on-demand company posted numbers like that.  Moreover, Salesforce reported that it gained 3,600 net new customers in the last quarter.  It’s hard to say from that data whether companies in these economically distressed times are opting for on-demand or if this simply represents normal growth.

Other companies like Oracle and Siebel reached the billion-dollar milestone sooner in their corporate lives but I think that perspective compares apples and papaya.  Software companies that reach the billion-dollar plateau have always done so on the basis of products on sale for considerable sums—often hundreds of thousands to millions of bucks.  Reaching a billion dollars based on charging by the seat every month is an entirely different matter. 

So a billion dollars worth of trickle-in revenue is even more impressive and it says a great deal about the acceptance of the business model as well as the technology.  If Salesforce had a different pricing model, I think they would have gotten to this level a long time ago. 

Critics might say that most of the seats represented by this revenue is SFA based but that can be said about almost any full suite CRM provider.  There are many more sales people than marketing people in a typical organization hence more SFA seats to buy.  Very large companies often have massive call centers too.  No matter, Salesforce is selling in all CRM verticals and they are increasingly selling generic seats to companies that simply want to write their own on-demand applications.

It’s worth noting that there were other on-demand SFA solutions on the market when Salesforce.com got started ten years ago with names like UpShot and Salesnet.  Each company had the same basic idea and each was dedicated to the multi-tenant model.  But neither of those other companies is a freestanding entity today.  Siebel bought UpShot and integrated it into Siebel’s on-demand offering.  Then Oracle bought Siebel and Oracle CRM On-Demand traces its lineage through that line of inheritance.  RightNow bought Salesnet then decided to stick to its service and support knitting. 

I think a great deal of credit has to go to the CEO for Salesforce’s success.  I knew the chiefs of UpShot and Salesnet at the time.  Both are good people, good businessmen and each wanted to succeed.  But, in my opinion, neither one really understood the disruptive innovation that on-demand computing presented.  Or possibly the potential was more concept than reality and it took Marc Benioff to press the issue. 

At the end of the day you could argue that it was Benioff’s vision that made the market.  Without Benioff it is possible that on-demand computing would have remained a backwater, a cute idea for supporting salespeople the same way that social networking has pretty much remained a nice consumer idea. 

It is interesting to note that the rise of social networking as a business tool closely correlates with the ability to form mashups with other on-demand products, notably Salesforce.com.  And Benioff is behind some of it.  He shared the stage with a Facebook executive late last year to announce the integration of their products and to promise that integrations with other social media were not far off.

Benioff’s vision of on-demand computing is older than Salesforce.com.  As an executive at Oracle he championed the on-demand idea along with Evan Goldberg , a founder of NetSuite.  Timing is everything and though the idea was mature enough when he was at Oracle, Benioff had to wait for a few technologies, like the Internet, to catch up.

As on-demand computing enters its second decade it’s worth taking a moment to consider where the original invention will take us next.  Social networking, hand held devices and a vastly improved wireless Internet will no doubt contribute to driving computing deeper into our lives.  But the style of computing will be far different from what we see today.  It will be ubiquitous for sure, but it will also be personal to an unprecedented degree and I think it will owe a lot to on-demand, platform-based applications mashed up with social networking and who knows what else.

A Billion Kudos

Salesforce chairman and CEO, Marc Benioff, delivered the good news to eager investors and financial analysts yesterday in his quarterly earnings call after the market closed.  It was like a spring rain in a desert.  For the year just ended—its tenth—Salesforce.com generated just over one billion dollars in revenue, smashing its previous records and adding 3,600 net new customers.

Ten years ago Benioff, Parker Harris and a small group of determined San Francisco technology mavens and executives founded the company on the premise that the world ought to move to on-demand computing.  While the idea was intuitively obvious to true believers, there was a great deal of doubt in the rest of the world.  Skeptics complained that no one would trust their data to the emerging Internet or that an application that ran in a browser could be very powerful.  Times change.

I remember the first time two people from Salesforce—Clarence So and former CEO John Dillon—briefed me in February 2000 very clearly.  I had just started a job the prior month as a senior analyst at the old Aberdeen Group and for whatever reason I had decided to cover the emerging market of CRM and hosted delivery models. 

My previous jobs had mostly been in software sales and the first time I saw the product I thought, this makes perfect sense and why wasn’t this available when I was selling?  It was such a clear idea, the kind of thing that I would later call a disruptive innovation.

Today Salesforce is the CRM market leader—if not in absolute terms, then certainly in momentum and mojo.  They took on Siebel in what looked like a preposterous and Quixotic adventure and ended up eating Siebel’s lunch.  Whoa!

The company has achieved a great deal in the last ten years, making on-demand or SaaS or whatever they decide to call it this week an increasingly conservative choice for new solutions.  Not just CRM but increasingly, HR and back office applications are being sourced on-demand today.

No body starts a company and builds conventional applications any more either.  The economics don’t work.  And it is so obvious that a new generation of innovators is not only building their apps the on-demand way but they are building new business processes as well.  People like Salesforce alumnus Tien Tzou founded Zuora last year with a small cadre of friends.  Their vision?  To deliver an on-demand billing and payment system for on-demand companies.  It turns out that these companies have requirements that are not easily met by conventional billing systems.  So the innovation process has started anew.

The business model took a lot of getting used to at a time when technology company revenue charts looked like blueprints for ski resorts.  In a world where technology costs were high and products went obsolete and then had to be replaced by subsequent larger investments, it was a challenge to convince financial analysts that this way was better.  Customers would respond to low TCO with loyalty.  In the end the company’s momentum and happy customer base gave the financial whiz kids the encouragement to back the company’s IPO.

Steve Cakebread came on board as CFO to help the company in its successful pre-IPO courtship of the movers and shakers on Wall Street and just a few weeks ago Cakebread left the company, perhaps to start the long process over again this time as CFO of Xactly.  Cakebread’s contribution was graciously acknowledged by Benioff in yesterday’s call.

There will be plenty of time later to discuss the company’s latest adventures in Cloud Computing, and to critique this or that.  Today, we can savor the moment when on-demand computing hit the billion-dollar mark.  Happy tenth birthday Salesforce.com.