Salesforce.com: The vision gets grander

Posted by: Steve Hamm on March 18, 2005

Marc Benioff, the genial CEO of anti-software maker Salesforce.com, has a challenge that lots of other CEOs would envy. Over the past six years, as the San Francisco-based company grew from quirky infancy into a force to be reckoned with, he used his considerable PR skills to attract a ton of media attention and way more coverage than a company of that size would normally warrant. But just when we reporters think we’ve had enough—there isn’t anything new to write about Salesforce.com—Benioff pulls another furry animal out of his hat. It’s a sweeping vision that could make his company a much bigger force in the tech world.

The new thing is Multiforce, which in his typical understatement, Benioff calls, “The first on-demand operating system.”

Salesforce.com started off as a simple thing. It was software running on the company's own computers that customers could use to manage their sales forces. By subscribing to Salesforce.com, customers avoided the cost and trouble of buying their own software and computers, setting up a system, and keeping it running. Over the years, Benioff added more capabilities, including tools that clients could use to customize their service and that independent software outfits could use to build related applications. That helped Salesforce.com round up over 13,900 customers with 227,000 individual subscribers.

Multiforce takes things a big step further. The technology, which is to be introduced in June, turns Salesforce.com into a platform upon which customers can run any number of on-demand applications--all of which run on its farm of computers and tap into one gigantic database. Computer users can essentially live their professional lives in the Salesforce.com interface and click back and forth between their most-used programs. This positions Salesforce.com as the counterpart in the online world to the role Microsoft plays in the PC world.

Benioff is so cock-sure about Multiforce's prospects that he violates one of the basic tenants of computerdom: Don't poke Microsoft in the eye. Microsoft entered the customer-relations management realm with traditional packaged software two years ago, but hasn't yet racked up the millions of users it needs for a business to register as a success for the software giant. "Who's afraid of Microsoft? They’re not able to perform," scoffs Benioff.

We'll see. Microsoft has a way of working on something until they get it right.

In the meantime, Benioff has another dilemma. It's in branding. Jeff Bezos thought way ahead when he named his company Amazon.com. He knew it wouldn’t be just a bookstore. If Benioff's strategy clicks, it won't be long before the name Salesforce.com starts to chafe. No wonder he's accenting the "force" part these days. It's way too early to call Benioff a big winner. But a great marketer? That's a done deal.

Reader Comments

Ron Wood

April 29, 2005 12:40 AM

Sounds like smething I'd to be involved with.

Jeff Minich

August 23, 2005 11:14 PM

Marc Benioff can wax eternal about not being afraid of Microsoft but until he gets Salesforce, and all the other xForce products he's selling, down to a price that conforms with MS's ubiquitous pricing model for individual desktop productivity tools, he's just exercising wishful thinking. Microsoft has 40 million small businesses who are loyal users of Office, Access, Windows and the like. They use it because it's cheap and offers extraordinary levels of utility. Benioff has 15,000 businesses (or so) who pay extraordinarily high prices on a per user basis for XForce products.

XForce products are cheaper than Seibel and NetSuite, but not by much. Mass adoption of web applications by small and medium size businesses won't come until Office-like pricing arises in the market, which is possible now given the high level of automation and low cost of a the latest IT infrastructure components. Couple cheap infrastructure with the emergence of commercially viable Open Source web applications (a la Sugar Open Source CRM) and you'll start to see $5 per /user/mo pricing for functionality that Salesforce charges a minimum of $65user/mo for.

Already companies are harmoniously using open source applications along side Microsoft desktop software. For example, Sugar Open Source CRM works effortlessly in concert with Outlook, simplifying CRM adoption in organizations whose processes have evolved around the MS Office-centric PC paradigm.

On a product level Microsoft has failed to solve some fundamental information sharing issues that pervade many small and medium sized businesses, while Salesforce and Netsuite have failed to reach any kind of significant market penetration because of their pricing models. As a result collaborative information technologies such as CRM, Project Management and eLearning are still primarily the domain of large enterprises. Open source projects such as SugarCRM, NetOffice, and others now promise to fill the gap, adding a new layer of web-based collaborative functionality for business users without forcing them change much or to abandon Microsoft's individual productivity tools. Microsoft does just fine in this scenario, but the proprietary on-demand companies are almost certainly to be marginalized.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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