Posts Tagged ‘Benioff’

WTF!  I’ve been writing, talking and meeting all day.  I thought I had the night off when this bombshell went off (it comes directly form Twitter):

“RT @Benioff: Larry just cancelled my keynote tomorrow! Sorry #oow11! Join me @ St. Regis AME Restaurant at 10:30AM! The show must go on! Sorry Larry!”

There are so many things to say on so many levels, this could take all night.

Of all the bush league things that could be done, this is a topper.  If you thought the days of animosity and dirty tricks was over in Silicon Valley because we had somehow grown up — or at least aged out of it — tonight is a sobering reminder that they play by bare knuckles rules out here.  Let’s try to pull this apart and analyze some of the levels of meaning.  ALL OF WHAT FOLLOWS IS AT BEST A HYPOTHESIS, MY HYPOTHESIS.

First off, you don’t cancel a keynote on the speaker less than 24 hours in advance regardless of the reasons short of moral turpitude or an ax murder.  We don’t have motives as I write this so it is my assumption that the Benioff keynote scheduled for tomorrow morning had no justifiable reason for termination.

Even if you are Larry and it’s your show, if you made the agreement, most likely a year ago, you keep your word.  If you don’t like the idea, you cancel next year’s keynote a year in advance, not the night before.  One immediately has to wonder why this ever got started in the first place.

So, what’s going on here?

Marc Benioff knows how to get under your skin if he wants to and that should be no surprise to anyone.  For all we know, Cole Porter was imagining Benioff when he wrote the lyrics to “I’ve got you under my skin”.  Tom Siebel got a big dose of Benioff when they were competing.  I remember one of Benioff’s first attacks on Siebel featured a third grade kid named Dave who had to write one hundred times on the blackboard, “I will not let Siebel take my lunch money.”  Ouch!  That was effective.

People loved the Dr. Dave campaign in part because it pitted a real David against a goliath and it worked brilliantly.  Benioff hounded Siebel relentlessly until time and circumstance made Siebel decide to throw in the towel and allow itself to be bought by Oracle where it remains today.

Today’s dust up can be seen as a reaction by Oracle to several years of Benioff sniping about cloud computing and Oracle’s lack thereof.  Let’s review.  Benioff started giving a keynote during OpenWorld a few years ago.  As one of Oracle’s biggest customers it was a privilege but also something that the vendor — Oracle — could not easily refuse given the circumstances.  At that point, Oracle had CRM OnDemand but Benioff had the momentum in cloud computing, CRM and social media.

Things only got better or worse depending on which horse you rode.  Salesforce continued to grow and gain market share by offering more products like Chatter and socialized CRM.  Oracle made incremental improvements to its core systems and continued to offer several flavors of CRM including CRM On-Demand and Siebel.  Oracle is a tough competitor in CRM, not doubt about it.

When Oracle bought Sun and began bringing to market its Exa- series of hardware including storage (Exadata) and compute servers (Exalogic), Marc ridiculed them as cloud in a box and not real cloud computing.  This year in the wake of a very successful Dreamforce, Benioff was ready to come out talking about collaboration, the social enterprise and the social customer.  I think the dominant concern might have been letting this cannon loose in the OOW chicken coop.

Perhaps Oracle had justifiable concerns.  If you went through the OpenWorld show floor today and visited the Salesforce booth (Yes, they have a booth!) you would have seen something very strange for a trade show.  People from the Salesforce Foundation staffed the Salesforce booth and they were in the middle of preparing aid packages for charity work.  There was nothing in the booth relevant to selling Salesforce’s SaaS service.

The foundation was simply recruiting people from the show to do the packing labor as they walked by.  It was as if Benioff was saying to Ellison, “See, we don’t need your X-boxes you can do all this to make money and we have a higher calling.

Maybe that was the last straw, I don’t know.  Earlier in the day, I had heard that there was a chance the keynote would be moved to the following day but not much later it all came to an abrupt end.  Benioff has found alternate space for the speech and it will be held as planned.  But meanwhile, Ellison and company look either like a bunch of fools who got played or the school yard bullies.  Either way they’ve been pushed into an action they will regret.  If this was football, I’d have to say that Salesforce caused its opponents to fumble or to throw an interception.

What precipitated the action is unclear and likely to remain a personal issue between two people who were once mentor and protégée.  Why it happened says much about Oracle.  They should have been able to behave better or at least in a more mature way but I guess that isn’t the way things always work out here.


Marc Benioff’s Facebook page says that is a rising leader in the effort to get carbon out of business.  I didn’t know there was such a survey or report but I am glad there is.

Getting carbon out of your business processes is hugely important.  While most people will view this as an anti-pollution idea and good corporate citizenship — and it is — it has an even more serious driver and consequence.  As important as carbon abatement and climate change limitation is, it is secondary to the idea that the planet is running out of fossil fuels like petroleum and coal.  Why secondary?  Because without the affordable fuel to grow food and bring it to market (just to name one idea) you’ll die in a food riot long before the planet heats up enough to threaten your grandkids existence.

You might like to think that the earth has a limitless supply of fossil fuels but for that to be true the earth itself would need to be limitless.  Of course nothing is limitless though some things are so big that they appear to be.  In fact, the earth was endowed by about 2.5 trillion barrels of crude oil which we began tapping in earnest in the 1850’s at Titusvill, PA to be precise.  Since then we’ve discovered all kinds of uses for petroleum as fuel and as raw material for numerous materials from rubber and plastic to paint and pharmaceuticals.

But we’re running out of the stuff.  Estimates from petroleum geologists and others in the industry are that the planet now contains about 910 billion barrels of crude and it’s in harder to reach places of extreme weather or ocean depths.  Oil and therefor transportation will never be as cheap again as they are today.  Check that, transportation that is not tied to fossil fuel has a chance of being this cheap again but that will require a massive investment in infrastructure and I doubt anyone has the stomach for that — yet.

So that leaves it to the business community to fend for itself.  Taking carbon out of your business processes is not simply good environmentalism but smart business.  If you can find ways to visit customers over an IP connection or replace the visit with a video you are taking carbon out of that process.  That’s where this report fits in and why it’s so important.  The tech sector is about to be called on to pull our collective chestnuts out of a big fire and those who lead this process stand to make a lot of money.  Google, Cisco and Salesforce are all at the top of this stack and your company ought to be trying too.

The recently concluded Dreamforce conference in San Francisco might have been the most successful CRM conference ever.  That’s not hyperbole.  I have been at some major events in the last ten years that rival this year’s Dreamforce.  For instance, whenever Siebel had a user conference that was also major.  But a lot has happened since the last time Siebel held an independent user event not associated with Oracle — that was in 2005 and much has happened in the intervening six years.

In that time SaaS and cloud computing have finished their takeover of corporate computing — at least the majority of the hearts and minds.  Analytics has become important everywhere (including analytics in CRM was pioneered by Siebel) and, of course, social media has given new life to the whole front office.  All of this came together in the recent Dreamforce.  Beyond that, though, Salesforce has clearly shown that it intends to change the business application development and deployment paradigm with a host of databases, data storage options, programming languages and platforms.

You might think that this is a good time to take a breath and contemplate a new line of work because this all seems locked down but you’d be mistaken.  Despite all the glitter of Dreamforce there are still many minds to change.  Social and cloud computing have nicely established beachheads in strategic areas and even skeptics are likely to acknowledge that the world is changing.  But there’s nothing pre-ordained that says cloud and social will carry the day.

There’s still a good deal of skepticism in the IT community about using applications from the cloud, about data security in the cloud and about performance.  Where social business techniques are concerned many old line IT directors and CIOs still regard social media applied to business as something between a fad, a waste of time and coddling young employees.

As many of you know, I’ve been a judge in the CRM Idol competition organized by Paul Greenberg.  Most of the heavy lifting (it’s still ongoing) was taken care of before Dreamforce.  For instance, we all took about forty briefings in a two week period and our brains are tired.  But the confluence of these events has left me with a unique perspective on the marketplace enabling me to look forward and back about ten years in each direction.

Looking back I can see applications built in the last decade or even earlier that still try to cover CRM’s basic stovepipes.  They are applied to shrinking niches but their owners still manage to find an audience.  These applications are serviceable but no one will confuse them with the systems of tomorrow.  The futuristic applications we saw do things I didn’t even know we needed but now I wonder how long before they’ll hit the big time.  In all of this I learned that the marketplace is simultaneously rather conservative and equally progressive.

The market is conservative in the way of the old maxim, if it ain’t broke, don’t fix it.  And that maxim informs much of the IT community that can’t see the benefit of socializing front office business practices no matter the growing list of success stories to the contrary that you point to.

However, in its more progressive moments, the market is like a machine hungry for fuel and raw material so that it can make the next products.  This hungry market is what propels us and keeps the conservatives on their toes so that at the first sign that the old paradigm is broken, they leap to fix it with whatever new solutions are at hand.

This is not to say that backsliding is impossible.  If you look at most of the cloud offerings today, you notice an eerie similarity in many products.  They aren’t so much cloud solutions as they are what Marc Benioff likes to call false clouds.  They are conventional applications running in a datacenter in the sky without benefit of the standards and multi-tenancy that is the heart of cloud computing.

August showed me all of that — from Idol to Dreamforce — and in the weeks and months ahead you’ll hear more from us about Idol and what seems hot to us.  We’ll also be watching Salesforce to see how well it makes good on its Dreamforce promises.  The conservatives and progressives will continue their back and forth and it will seem like there is no progress yet when you raise your head from the tasks immediately in front of you it will be apparent that progress is incremental as it has to be.  That’s why, despite the success of Dreamforce, the IT debates are not over and the work continues.

They call it a Q&A session but when Marc Benioff takes questions he draws the kind of crowd that you often see politicians performing in front of.  The group has gotten too big for me to know everyone or even most people — especially since it includes press, financial analysts and industry analysts.  I have the pleasure of hanging with some of the sharpest minds in the analyst world including Paul Greenberg, Esteban Kolsky, Brent Leary, Jesus Hoyos, Josh Weinberg and a slew of people I only know by reputation inside an ad hoc group called the Enterprise Irregulars.  If there’s good analysis coming out of Dreamforce or anywhere else where we converge it’s because of them.

The press conference is our chance to ask Marc directly anything about the business and the technology and it’s amazing what this guy keeps in his head.  Here are some examples:

On Salesforce’s accounting methods

Someone referenced a recent story in the financial press about how Salesforce was using some questionable accounting methods.  Benioff set the record straight saying that the referenced methods were the ones used by conventional software companies not software as a service (SaaS) companies.  Without getting into the weeds, recognizing revenue is different for these two groups and before going public Salesforce did a lot of due diligence to document its approach leaning on world class accounting experts.  Today, the path laid down by Salesforce is largely the one used by other SaaS companies.  So there.

On retiring the no software idea

It’s not time for that yet.  Too many people still don’t get it as evidenced by what Benioff calls the “false clouds” in the market.  As long as other vendors try to claim cloud parity with new marketectures, Salesforce will be selling the no software idea.

On the market in general

While Salesforce has done well it’s no time to circle the wagons.  Social principles have made everything new again and most of the world needs to catch on so Salesforce is in growth and market share acquisition mode and will be for a long time.

On the economy

While it might not be great, the companies Salesforce deals with are growing and Salesforce must stay ahead of the hiring curve.  Today it has roughly one thousand open job requisitions.  While the economy might not be in great shape, Salesforce continues to execute and delivered 38% growth year over year in its second quarter.  Not too shabby.

Like any good pol, Marc announced that it’s his intent to answer all of the questions the group has.  He seems to relish being in front of the crowd and talking about his favorite subject.

Necessity is the mother of invention and last year when Bill Clinton was late for the closing keynote, Marc may have discovered an ideal medium for closing out Dreamforce.  This year he perfected it.

I don’t know if Clinton was scheduled to give a conventional speech last year or a sit down interview I only know that in selecting Stevie Wonder as an interview subject, the limitations of the situation bred a new kind of closing ceremony and enabled a new level of customer or audience intimacy.  Mr. Wonder is many things but one thing he is not is a stump speaker like the former president.  In selecting Wonder, Benioff had to accept that limitation and from it the interview format was a natural outcome.  But who knew the Marc could be such an engaging interrogator and listener?

This year the interview was established and organized as much as such a thing can be.  In selecting Eric Schmidt of Google, Benioff called on a friend of several decades, a former colleague at Oracle and an individual who has by any measure lived the life of a highly successful Silicon Valley entrepreneur and innovator.  Benioff and Schmidt spent more than an hour discussing the evolution of their industry and setting what Dreamforce had been all about in that context.  When you left it was still possible to think of an alternative universe, but only with great difficulty.

In fact, there is no alternative universe.  You get what you have and what we all have is an industry that is leading business into the new century and a new era.  That era is mobile and social, it is connected physically and emotionally and increasingly the connectors are technologies.  It is also rapidly iterative and Salesforce was careful within Dreamforce to ensure it touched all bases.

Benioff’s breakthrough with Schmidt at this year’s Dreamforce was the realization that other people could carry the ball and deliver the same kind thought leadership that Salesforce is delivering.  Salesforce has always been about extending thought leadership; about getting people to imagine a world without the complexities of conventional IT.  The closing interview didn’t just expand that franchise, it sent a lot of people home knowing they were on the right track and doing something important.

Data, Here and There

Posted: September 1, 2011 in CRM
Tags: , ,

One of the more announcements Marc Ben off made in his Day 1 Keynote was related to  The news is that Salesforce is now enabling its customers to store their data on their own hardware inside their data centers.

There is a need or at least a demand for this capability as many large enterprises and government institutions do not wish to, or are prohibited from, sending their data outside of their four walls.  In some geographies they can’t let data cross national borders.  So, in Europe for instance that would at least in theory mean a need for a Salesforce data center in each locale.  That’s clearly not going to happen so the move to in-house storage makes a certain amount of sense.

Nonetheless, this also introduces a new level of complexity to the situation and potentially makes cloud computing less rather than more stable.  With more points of physical integration and storage, individual customers are paradoxically, now at their own mercy.  If their storage goes down, who do they point fingers at?

This certainly takes a little wind out of the sails of the competition who have been hammering on the idea that their solutions are more configurable because they offer on-premise options.  That’s getting to be a difference without a distinction.

At least and most importantly the software stays in the Cloud where Salesforce can manage and upgrade it.  Multi-tenancy lives on and perhaps this concession to storage will bring more people into the fold. is riding the crest of wave after wave of good news as it starts Dreamforce, its annual convocation for customers, prospects, the press and analyst communities.  Forty thousand people are expected in San Francisco for the event at some point in the week.

In a sign of how big this event has become, last night I saw work crews closing down Howard Street by the Moscone Center.  They were erecting what looked like a structure on the street to turn it into some kind of pedestrian area.  Only Oracle, one of Salesforce’s biggest competitors (and curiously Salesforce is among Oracle’s largest database customers) ever does this when they attract similarly sized crowds to their annual meeting, Oracle OpenWorld.  If you need symbolism for how large Dreamforce has become, you can’t do better than that.

But back to Salesforce.

The company is riding high after reporting strong revenue numbers and that it is on track to generate well over two billion dollars in business in its current fiscal year.  The company has raised its guidance to financial analysts.

Salesforce CEO, Marc Benioff, is on the cover of Forbes magazine, which announces a cover story on the “Fifty Best Companies Of Tomorrow”.  Salesforce has the number one spot and the ranking was done by none other than Clayton Christensen, the Harvard Business School professor, who coined the term “innovator’s dilemma” in a series of books by that title.

Forbes is the same magazine that once ran a cover story on Tom Siebel with the headline “The Man Who Can See Around Corners”.  It was about how Siebel and his customers, using analytics software, were able to spot a slowdown in the economy and adjust their businesses well ahead of their competition.

But Benioff took a page from Christensen’s book and completely disrupted Siebel and he is well on the way to disrupting the whole software industry and beyond.  Salesforce is in the process of doing nothing less than introducing a new paradigm for the way that companies do business, deal with customers and fit into the world.

Remarkably Salesforce’s competition is comparatively stuck in the mud trying to figure out how to move beyond traditional enterprise computing with its high costs and long delivery cycles.  Salesforce has forced them to take a fresh look at computing and customers and they have largely responded with bandages for their legacy products.  They’ve adopted what is easiest about software as a service (SaaS) and borrowed the term “cloud computing” to lend it the cache of relevance.  But while that might be enough to continue making money on legacy software, it’s a dead end and other CEOs — notably Tien Tzuo of Zuora, a billing and payments solution for subscription economy companies — are making bold predictions.  For example, earlier this week Tzuo predicted the death of conventional ERP software.  Tzuo had a single digit employee number at Salesforce before he started Zuora, by the way.

So if you are Salesforce and Benioff, what better day is there for Cornell University to come out with a new study on creativity — “The bias against creativity: Why people desire but reject creative ideas.”

According to Jack Goncalo, assistant professor of organizational behavior at the Cornell University ILR School and the co-author of the research, which will be published in an upcoming issue of the journal Psychological Science people love creative ideas but they reject them because we all have a bias for certainty and creative ideas raise uncertainty.

That is in microcosm what the software industry has been going through for the last decade.  Many of the people who sell and buy legacy software might be afraid of change for the disruption it may cause.  But if you read Christensen you understand that disruption is the key to innovation and profits.  It’s an idea Benioff and his tribe have no trouble dealing with and they have no trouble dealing with the rewards either.

Over the last decade you could have discovered what the Cornell researchers discovered just by watching Salesforce.  Today you can read the Cornell study or just buy a copy of Forbes.