Outside the Lines

Steve Gillmor and Nik Cubrilovic, the hosts of the new TechCrunchIT site, snagged an interview with salesforce.com CEO Marc Benioff after the announcement of Force.com Toolkit for Google Data APIs. Benioff gives a lengthy commercial for his platforms-as-a-service strategy to remake the software industry and create a multi-billion dollar software company.

When asked about the challenges for older enterprises, Benioff said, "I don't have time or patience for the status quo...for people who are trying to control innovation or stop the future." He included Microsoft, as well as unnamed vendors, partners, journalists and other parties on his list of those who are holding onto the past and getting in the way of innovation.

"Thank god for Google," he added, citing his ally in the battle against Microsoft and the cloud-forsaken Luddites. It's shaping up to be an interesting battle. Salesforce.com could also find itself as an acquisition target.

I covered the announcement today in my post "Marc Benioff's mantra: Anything but Microsoft".

Today Salesforce.com announced a "global strategic alliance" (also known as a partnership) with Google, introducing a new integration point, Force.com Toolkit for Google Data APIs. The alliance allows developers using Salesforce.com's cloud-based development platform to integrate with data from Google services via Google Data APIs. This integration service is in addition to Salesforce for Google Apps, which integrates Google's suite of applications with Salesforce.

CODA, which is developing a financial suite of applications on the Salesforce platform (Force.com), has developed a prototype that takes data from Google Spreadsheets and brings it into an Order-to-Cash module.

This latest coupling with Google is part of Salesforce.com CEO Marc Benioff's quest to remake the software world and replace Microsoft as a leading business software platform for building any kind of application. Remaking the software world means moving from client/server solutions to multitenant, cloud-based, on-demand, software-as-a-service, utility computing, platform-as-a-service applications or whatever assemblage of words describes Web-centric computing. They could also be called "server/client" systems, since Salesforce.com, Google, and others offer offline access to the applications.

Part of Benioff's strategy over the years has been to draw attention to his company by picking on his biggest potential competitor--Microsoft. His mantra is "the end of software," referring to the kind of client/server applications embodied by Microsoft Office. In a March interview with CNET News.com, Benioff said:

I think Microsoft is still a dinosaur. More than ever, it tries to hold onto its monopolistic position around technology that they hold, whether it's SQL Server, whether it's NT, whether it's Windows, whether it's Office--these are their cash cows they don't want slaughtered.

The other part of Benioff's strategy is to align with Google against Microsoft. "The enemy of my enemy is my friend, so that makes Google my best friend," Benioff has said.

But the reality is that Microsoft Office is an essential part of the Salesforce ecosystem. Benioff told me that a very large percentage of our customers do integrate with Microsoft's desktop apps. But he seems to be encouraging customers to abandon Microsoft Office and adopt Google's applications.

Benioff touts that the most downloaded applications in the Force.com AppExchange are related to Google, such as Appirio Calendar Sync for Salesforce and Google Apps and Gmail to Salesforce Browser Button for Firefox. But Microsoft's popular Word and Excel integration for Salesforce.com is not available via the AppExchange, so it's unclear as to how it compares in terms of usage to the Google-related products in AppExchange.

Benioff has been visionary in pushing a new model for business applications and adept at generating headlines. But it is way too early to count Microsoft out. This is just the beginning of a new software era, and Microsoft hasn't yet decided to make it more interesting, but it will.

At a Churchill Club event at the Computer History Museum in San Jose on April 3, Hasso Plattner, co-founder and chairman of SAP, and Marc Benioff, co-founder and CEO of Salesforce.com, debated the future of enterprise software. The debate was moderated by Quentin Hardy of Forbes.

I covered the debate here. Benioff challenged Plattner to run SAP's software on the salesforce.com platform. Plattner gave Benioff some counsel: "We have many things in common. Let me give you some advice, but you might not take it because you are younger: don't overestimate your platform."

Following is a video clip from the event. Benioff describes the new era of enterprise software, which "look to the functionality of the past but to values of the consumer companies like Google, eBay, Amazon and Yahoo, who have become massive companies serving millions of users with tremendous complexity but through a new technology model."

Plattner talked about the need for immutable Web service interfaces. "The most important thing to learn when using services is that we cannot really modify them." The future is building on top of services and meshing services with each other. He also noted that the new software paradigm will allow developers to monitor and see what users are doing.

Via ZDNet

Listen to the entire debate here.

MOUNTAIN VIEW, Calif.--Two titans in the enterprise software business faced off Thursday at a Churchill Club event at the Computer History Museum here, and a bit of history was made.

The sage, 64-year-old Hasso Plattner, co-founder and Chairman of SAP, and the upstart, 43-year-old Marc Benioff, co-founder and Chairman of salesforce.com, debated the future of enterprise software, fielding questions from Quentin Hardy of Forbes and the audience.

The history footnote of the evening came from Benioff, who challenged Plattner to build SAP applications on the Salesforce.com platform. "I want to figure out how to get SAP to build on our platform," Benioff said. "SAP needs to write its new apps on our platform, and I need to help him do that because there is no way he can figure that out...we will be in a war to get more developers on our platform."

Plattner, who was writing software when Benioff was in grade school, wasn't biting, and became a bit exercised. He questioned whether Salesforce.com could keep thousands of on-demand service interfaces consistent as its platform grows and as customers write code to integrate with the platform.

"All 41,000 Salesforce customers are on the same version. When we release the new version in June, we don't break the links. In some cases they have to re-implement, but you still have a managed environment," Benioff countered.

"I would be scared at what you just said. If you extend that to whole enterprise system, I would be scared to death," Plattner responded.

Benioff, who I declare the debate winner by nontechnical knockout (no references to in-memory database systems), stuck to his vision of the future. "You have to buy into the fundamental premise that the world has to change, and because we have a global network and a new architecture with massively parallel servers, we can build technology with a level of automation previously unimaginable.

The evening started off more calmly, with Benioff describing the new generation of enterprise software companies, which he said will look more like consumer companies, such as Google, Yahoo, and eBay on the back end, but serve up traditional business functionality.

Plattner rambled on about betting on modification-free software with SAP R/3 in 1993, only to find that customers wanted to customize it. SAP's plan today is to provide 2,100 service interfaces in Business ByDesign, its forthcoming hosted suite of applications for the mid-market. Those interfaces will mesh with each other but will not be customizable. He differentiated Business ByDesign from Salesforce.com by virtue of the completeness of the SAP suite. SAP has been working on Business ByDesign for four years with 2,500 developers on the project, and it won't be generally available until later this year or 2009.

"We have many things in common. Let me give you some advice, but you might not take it because you are younger: don't overestimate your platform."

--Hasso Plattner to Marc Benioff

For SAP, software is about serving larger businesses with a complete, integrated suite of applications with "wall-to-wall functionality," Plattner said.

Benioff claimed that the Salesforce.com platform could run any kind of enterprise application. He asked Plattner why Salesforce.com beat out SAP for the Dupont business. "We had a shitty CRM system," Plattner said. He then said that the new SAP CRM 7.0 is the best product in the field. "You had a good time and now we are. If you are really successful how much are you worth?" Plattner said.

Benioff said Salesforce.com is aimed at all sizes of companies and across industries. "We have been passionate about moving obstacles out of the way of the old enterprise software companies," Benioff said. "We are at the verge of a breakthrough, and it is as big as the software-as-a-service business has been. We see platforms emerging where we can accept customers and ISV code and run it natively, just as R/3 ran natively on Oracle. This means you can run the business processes of any company in the world. We are moving now to platform-as-a-service, and it's biggest the threat to SAP, MS, Oracle, and BEA architectures."

As salesforce.com evolved from CRM to application platform, Benioff has been making that claim the client/server model is doomed. Plattner touted SAP's developer community. "We have 1.2 million software developers on our platform, 2,000 partners developing addition software," he said. "We have the largest software development project in our history, with 2,500 developers developing on demand," Plattner added.

"You have 2,500 developers and 2,100 interfaces. All that and no customer success," Benioff taunted.

In a moment of calm, Plattner said, "We have many things in common. Let me give you some advice, but you might not take it because you are younger: don't overestimate your platform." Sage advice.

Plattner was asked if he would consider buying Salesforce.com. "It always makes sense to look into something. If the Apex platform (the Salesforce.com platform) is really as good a he thinks it is, we should look even more," he said. Plattner also said that he thinks Oracle, where Benioff worked for 13 years, will end up acquiring Salesforce.com

To put this debate in historical context, Benioff has been known to disparage SAP, which generated $15 billion in revenue for 2007 with a 26 percent margin, as a company that doesn't innovate. In an interview with News.com's Charlie Cooper and myself a few weeks ago, Benioff said:

With SAP, you really have not seen innovation in the last 10 years. If you think about what is the one thing that SAP has ever innovated, what have they created that's unique to the industry or value-added technology? I have a hard time thinking about what SAP is going to be known for at the end of the day.

In August 2007, Plattner's proxy, SAP CEO Henning Kagermann, characterized Salesforce.com as follows:

Salesforce is like best of breed in the old days. It's always an advantage, but you cannot be best at everything worldwide. That's our advantage--we can run an entire business.

Speaking of old, SAP was founded in 1972 and Salesforce.com in 1999. Salesforce.com is approaching $1 billion in annual revenue, and a much smaller margin than SAP, with its software-as-a-service platform and subscription business model. SAP has been slow to adopt the software-as-a-service model, but is prepping to launch Business ByDesign. It will be more directly competitive with NetSuite than Salesforce.com, which is built primarily around CRM applications.

Benioff summarized the future of enterprise software during the debate in this statement: Software-as-a-service will not happen without Microsoft, Oracle, or SAP. But they are holding on to the past. The new Internet companies--Amazon, Google and ebay--what they have done and the new young internet companies is really the next generation."

Fundamentally, companies will find it more practical and cost effective to deploy enterprise software from the cloud over the next decade. As I said earlier, Benioff won the debate, but he has a long way to go to unseat Plattner's company.

In this Super Techies interview, I talk with Marc Benioff about his career in the software industry. Benioff is the co-founder, chairman, and CEO of Salesforce.com, which has led the business software-as-a-service revolution with its CRM-based platform. Salesforce.com is expecting to reach the $1 billion revenue threshold in its 2009 fiscal year, ending January 31, 2009.

In the interview, Benioff discusses his early work developing games for the TRS 80, Apple II, and Commodore 64, and his turn as a summer intern at Apple in 1984, coding in assembly language for the Macintosh.

Benioff also shares what he learned working alongside Oracle founder Larry Ellison during his 13 years at the company. In addition, he outlines the origins of Salesforce.com, which he started in 1999, and offers some insight into his aggressive marketing strategies and recipe for business success.

See also:

More Super Techies interviews
Marc Benioff taunts the awakened dinosaurs
Benioff takes stock of software shifts

Charlie Cooper and I interviewed Salesforce.com CEO Marc Benioff last week. Following is part of the exchange, where I asked Benioff for his thoughts on Microsoft. He has called Microsoft a dinosaur, incapable of innovation, and a monopolist.

Disparaging large competitors is part of Benioff's marketing offensive. He has taken shots at SAP, Oracle, Siebel, and others, dismissing them as 20th century fossils who are making feeble attempts to adapt to Web and cloud computing.

His braggadocio has garnered Salesforce.com loads of attention since its inception nine years ago. What's somewhat mystifying is how competitors have stood by while Salesforce.com heads toward $1 billion in revenue for its next fiscal year, ending January 31, 2009.

During the interview Benioff said of Microsoft, "...there is no acknowledgment to some of the core tenets of this new paradigm." He is not overly impressed by Microsoft's newfound and aggressive focus on the Web as a platform, as driven by Chief Software Architect Ray Ozzie.

Microsoft has been slow to adopt the multitenant architecture. The company is prepping Dynamics CRM 4, also known as CRM Live, to go after Salesforce.com, as well as bringing other products in the Dynamics family into a hosted, multitenant environment. Phil Wainewright pointed out in his ZDNet blog post, Microsoft hasn't publicly put services fully at the forefront of its strategy:

Publicly, Microsoft talks up the merits of its 'software-plus-services' strategy. In my view, the message is bunkum, even though it reflects the reality of Microsoft's business today: mostly software, with a few early-stage service offerings. But Microsoft has its message back-to-front. Until Microsoft reverses the software-plus-services mantra and puts services at the forefront of its vision, it will continue to disappoint.

I know many people want to believe Microsoft still remains in charge of its destiny and won't let cloud rivals walk all over it. But time after time, history shows that it's fresh startups, not incumbent giants, that gain leadership in new technologies and markets. I guess we're just wired to expect those who wield power to stay in place. But the truth is that, at times of change, it takes a change of leader to adapt to the new circumstances.

Recent pronouncements by chief strategy officer Ray Ozzie suggest that, despite the public bluster, Microsoft's top brass already secretly realize that they must put services, not software, at the center of their worldview (the world of the mesh, Ozzie calls it).

But, if you listen to Ozzie carefully, he is sending clear signals that point to software services and synchronization across all devices, online and offline. It's not a pure services model, because users do want to work offline at times. Even Salesforce.com and Google recognize the hybrid working model with their efforts to provide offline access.

Microsoft's oligarchs and other large software companies recognize that the shift to the cloud is a critical path. Benioff better run even faster, before the dinosaurs catch up a la Jurassic Park. You can bet that if the dinosaurs start to close in, he will run into the arms of one of the older dinosaurs, including Microsoft, or the new breed, such as Google.

Following is a portion of the full interview:

Q: In 2005 you said that Microsoft was a dinosaur facing the obsolescence of a technology and a business model. Fast-forward to 2008 and Microsoft just had a big event in Las Vegas, where Chief Software Architect Ray Ozzie got up onstage and articulated a vision that had a lot of similarities to what you're talking about vis a vis platform as a service, such as its SQL Server data services. So, has your opinion changed?
Benioff: No. If we had waited for Microsoft to create any of those, nothing would be created yet. Look at the whole software service phenomenon. Where are they? I think Microsoft is still a dinosaur.

Q: But what I'm asking today is whether you have changed your opinion. Do you think that Microsoft is still a dinosaur?
Benioff:I think Microsoft is still a dinosaur. More than ever, it tries to hold onto its monopolistic position around technology that they hold, whether it's SQL Server, whether it's NT, whether it's Windows, whether it's Office--these are their cash cows they don't want slaughtered.

Q: But are those cash cows monopolies?
Benioff: Well, I think one was ruled a monopoly.

Q:Right, but we're talking about SQL Server. We're talking about their software-as-a-service strategy, and so on. Can we consider those monopolistic?
Benioff: Well, not in the same way, of course. But the point is that they're trying to hold onto their past more than trying to create their future. This has been the great failing of Microsoft over the last 10 years. I haven't seen the level of innovation from them that we see from other vendors.

Q: As the concept of the platform as a service becomes more of a reality over the next decade, do you think that Microsoft has an opportunity to be one of the big platforms?
Benioff: The evidence is that history, more or less, will repeat itself because there is no acknowledgment to some of the core tenants of this new paradigm. I think only in the cases where they will be dragged, kicking and screaming, and I think the best example probably is Gmail.

Google is doing really well with Gmail. I think that's why now you will see Microsoft have to respond with a multitenant e-mail solution. They have Hotmail, but not Hotmail for business per se. They're definitely going to have to do that.

Q: With Ozzie taking over as chief software architect, Microsoft is talking more about how to take the plunge in software services. So where do you see the chief obstacle preventing them from turning this into a success? They've got all the developers in the world.
Benioff: I am not the CEO of Microsoft so I don't really know. You'd have to ask them why they haven't delivered on the vision. We're not unique in saying that it's the end of software. That's our phrase, but Microsoft has not delivered on the promise. They haven't used their power to innovate in the way that others have.