Web 2.0 – Marc Benioff, SalesForce.com

Web 2.0 – A Conversation of Marc Benioff, Salesforce.com
with John Battelle
10/6/04 John:
Marc’s a little gun-shy about saying things in public forums because of the SEC and their quiet period. But this is being webcast and streamed to the saleforce site so everyone can see it. What happened during your quiet period?

Marc:
As with Google, and any high profile company, there are a number of issues you have to be aware of that you didn’t have to before. But at least we didn’t give an interview to Playboy. We announced our customer and subscriber numbers today. We have about 185,000 subscribers and have 12,000 customers. Our problem know is how we’re going to make those customers successful and grow the business to show that this is a new paradigm and a new platform.

John:
I know you have opinions about the SEC and the quiet period. What do you think of the process? Can the new paradigm stand? All eyes are on a company, but they can’t communicate.

Marc:
Reuters did an interview with the SEC Chairman and he said that a lot of these rules came from a time when communication was a lot different than today. And they’re going to take a good hard look at that.

John:
What type of advice do you have about that?

Marc:
I’m a software executive, I’m not planning on running for office. I am co-chairman for ptech which is the President’s advisory board on technology. We analyze trends and see if the government is funding the right things. We recently posted the health care report. I can’t understand Washington DC. It took me 2 decades to understand Silicon Valley.

John:
Do you find the ptech process invigorating?

Marc:
Ptech is the most fascinating thing I’ve done. I get to hang out with top computer scientists. You can really see the huge amount of change happening in the depth of technology itself and the potential of it. It’s up to us to harness it. Security has a lot of work in it. We’re benefiting today as an industry from the tremendous amount of research which was funded by the government decades ago. We need to radically increase some of those areas of research to keep the pole position.

John:
Google had an auction process in their IPO. Did you consider that and did you think that was revolutionary?

Marc:
I’m a very naive person in this stuff. I thought the auction was supposed to create efficient Market price so the company received the correct Market valuation. That was not the impression I got with the Google IPO. I don’t think the auction process worked as they would have liked.

John:
In the space you inhabit, what is it about this space (the IT industry) that creates these characters when software is so pedestrian? Such as Oracle and all the ego jousting that goes on in this industry.

Marc:
You see that in a lot of companies. IBM executives have created tremendous things. They have a secret network that makes deals with each other. Lots of other executives are doing things too. Microsoft has incredible people but you haven’t seen the same spread of executives as you have seen elsewhere running next generation companies.

John:
We have Larry Ellison and the SEC Chairman yachting against each other. This is theatrics. You’re good at it too. Your company is successful in its own right. In the midst of the 2001 bust, you had a party that felt like 1999. We asked Henne about your model, about software as a service. He said that they’re looking at it but revenues are huge over here.

Marc:
That’s the same comment we’ve heard before. Larry saw software service before anyone, but Oracle has a hard time executing because they’re so invested in their software ecosystems. It is a technology opportunity, Marketing opportunity, business model opportunity and distribution opportunity. There are many dimensions and you have to execute across all of them. The problem is how. When I started my company, I had conversations with all these guys. None of them took it forward with veraciousness that we did because it’s hard with a big company. Oracle is driving an aircraft carrier, not a speed boat.

John:
In a perfect world where the world turns and see your vision of software enterprise. When they realize that, what does the industry look like? Great vertical stacks of services or what?

Marc:
The industry will be much bigger. We’re on the threshold of the greatest opportunity in the history of the Tech Industry. You just need the ability to execute on that. The industry has the ability. When you look at web services, it was a big change of how technology was architected. Client-server computing was over a decade ago. We saw the browser emerge 10 years ago. It’s a whole new game and web pages are the repository of your data, living in a browser or on some other device. This is a radical departure from only a few years ago. When I look at that and the potential of new applications, we’re looking at the surface of birth of the software industry colliding with traditional Internet computing.

John:
With ptech and the CFOs of traditional companies, they seem very conservative and don’t want to try anything new. The new Web OS feels new. Salesforce is new. These guys rather spend 10 times more with Henne and SAP. What do you say?

Marc:
That’s the curve of technology adoption of Jeff Moore. If you’re scared by that you shouldn’t be in the industry. The people in this room are at the beginning of the curve. Most people in IT have no idea what this is yet. That’s how new businesses are made. That’s the power of our industry. If you can catch on to a paradigm, you’ll have the tiger by the tail. We can see the potential.