Benioff, High Priest of SaaS, Snipes Back at Oracle
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SAN FRANCISCO -- Before Larry Ellison lets Salesforce.com honcho Marc Benioff's digs get under his skin, he'd better remember that he created this monster -- at least, according to Benioff.
Salesforce's (NYSE: CRM) chief couldn't resist taking a few shots at his "mentor" -- Benioff's words -- for the Oracle CEO's sudden conversion to supporting software-as-a-service (SaaS) and cloud computing.
"Only six months ago, he said the cloud was ridiculous and made some caustic remarks, which is so unlike him," Benioff joked to Om Malik, founder of the GigaOm Network and host here at the Structure 09 conference, where the two were chatting.
After more teasing about Ellison's comments during the Oracle (NASDAQ: ORCL) conference call to discuss quarterly earnings earlier in the week, Benioff described how he had come to embrace SaaS and cloud computing -- explaining that he quit his job at Oracle a decade earlier to start Salesforce.com because he saw a shift in computing models.
To Benioff, it started with the move away from mainframes, shifting to virtualization with the formation of VMware in the mid-1990s for private virtualization, and culminating with public virtualization of Amazon EC2 and "Microsoft Azune" -- a dig at Microsoft's Azure cloud computing platform and its Zune music player that drew laughs from the audience.
The last step is the pure-play environments, which are written from the ground up to be multi-tiered shared tenet systems like Salesforce. "When we get to these pure-play systems, we get really efficient," he said.
To make his point, he noted that Salesforce relies on just two datacenters -- chiefly, its California datacenter, serves two million users across 60,000 customers and handles 200 million transactions per day. Despite that enormous volume, the California datacenter only has about 500 servers in it, he said.
"It's the pure-play software that wraps those 500 PCs that gives that efficiency," Benioff said. "Because we don't take your software that you've written and run in your datacenter, we can get much more efficiency because you operate in our managed environment. This is the shift and we will all move into a pure-play environment eventually."
Salesforce is trying to move as much of its application use to the cloud, and Benioff said most of the company's customers are trying to do the same thing.
"They are looking for efficiency," he said. "CIOs are looking to reduce cost and reduce risk. Some got caught with their pants down -- they built for a company 25 percent larger and ended up with a company 25 percent smaller, and enterprise software didn't help them adjust fast enough."
Contending with Twitter
As a result of such problems, he said IT customers are so skeptical and have been burned so many times that they need to hear from other customers. That's why he said a company's customers also make the best salespeople.
"You've got to get your customers selling for you," he said. "I don't think customers listen to vendors anymore. I think they listen to each other."
"If you get the customer references, and you can get that gravitas around customers talking about you and recommending you and referring you, you're in good shape," he added. "If you can't get that going, you're in trouble."
[cob:Special_Report]Benioff also said customers are demanding real-time information so they can make decisions in that way, though there's very little out there that's genuinely real time.
"Even with Google, you really don't see the real-time," he said. "It takes them a while to scan. The only thing that's real-time is Twitter. Twitter's a really good example. I think anything else that constitutes a delay won't be tolerated by the customer much longer."
Unfortunately, most CIOs don't get Twitter, as has been noted. "For a lot of customers, they don't understand that yet. I meet with a lot of CIOs and CIO groups, and I'll talk to them about Twitter. They don't know it, don't use it, say they haven't seen it -- it's not their generation," Benioff said.
When they say it's not useful, he takes them to Twitter's search page to search for their company or product, along with words like "problem" or "issue" or "sucks."
"Then, bam, you can see it. That's kind of shocking for them. They don't know how to deal with it," he said.