Salesforce.com adopts Amazon.com, eBay model

SAN FRANCISCO (11/17/2003) - Salesforce.com Inc. this month will make available the latest version of its hosted CRM application and developer platform, Sforce 2.0. Touting Sforce as a hosted application server marks a significant shift in the company's value proposition. As Salesforce.com Chairman and CEO Marc Benioff explained in an interview with InfoWorldExecutive News Editor Mark Jones at the company's inaugural Dreamforce User Conference last week, the company can now host any enterprise application.

InfoWorld: What is your vision for Sforce?

Benioff: Our customers have had the kind of psychology that Salesforce.com was not easily customizable, integrateable. But that isn't true, we were a lot more customizable and a lot more integrateable because we were already starting to implement these APIs. We had an XML interface. When it was clear to us that we had an architectural advantage but we were not articulating it, we said "what we need to do is a) invest more in the Web service protocols and XML interfaces, SOAP interfaces, WSDL; and b) start working with companies to provide the tools so that our customers can customize and integrate." We got ready to announce this as a separate initiative and we gave it a name, Sforce. As a developer platform for customizing and integrating Salesforce.com, we recognized it really could be used for more than just Salesforce.com, it could be used for other applications also. And that became the second part of it. That is when we said "we need to really let people know we have this whole platform that you can use: a database, a document server, an operating system, an application server, all these various things, but it's all online, it's all on demand." It's a fantastic alternative to the traditional on-premise server.

InfoWorld: Was this always your plan when you first started Salesforce.com?

Benioff: It wasn't really always in our plan (but) we always knew it was an option. It just became really clear this would be an exciting opportunity. We didn't know in 1999 the way Web services were going. But much in the same way that Amazon has become a platform for companies to do e-commerce -- you can build a Web site, the front end is Amazon, you don't know you're using Amazon -- also you can do that with Salesforce. That is what is exciting about Sforce. You can integrate Salesforce.com between Salesforce and Oracle, SAP -- or whatever your internal or external system is, or Amazon itself -- and you can customize, you can build new forms, whatever. But now you could also do that independently. We took it to another level with Sforce-to-go in basically three areas. One, custom objects: Now, not only can you use our existing tables but you can create your own tables. That's exciting for database developers. We gave them also a query language based on our objects in our database. It's object query language. And we also gave them this concept of an S-controller, an Sforce control, which is the ability to store their code in our server and then we call it on demand when they want it and run it inside Salesforce.com. That is, they can really modify our screens using a lot of different types of code, and that was a huge breakthrough for us.

InfoWorld: How significant do you think Sforce will be in the context of what you perceive to be Salesforce.com's core business?

Benioff: I think Sforce will become the foundation. Sforce is key because it gives that customization and integration and messaging. But then if we (want to) get this independent developer community emerging, we have 50 to 100 really serious people (at Dreamforce) who are trying to build applications on Sforce. And maybe that means in the world maybe there's 3,000 registered in total. A year from now (they could build) 20 really killer apps, and it'll be real interesting.

InfoWorld: What implications does Sforce have for traditional middleware vendors selling on-premise app servers?

Benioff: It doesn't really change at all, actually. I think that their market is still their market, and this is a new market and a new opportunity and a new level of demand. I've talked to all their CEOs, and they're incredibly focused on their on-premise opportunity. For example, let's say you're an InfoWorldand you want to build a Web site for advertisers to come in and check their ads, view the PDFs of the ads and when the ads ran, and look at the whole history of the account. So InfoWorldalready has a Salesforce.com database with the customer information, but now they want to build this Web site so they could use BEA's application server but not buy a database, not buy an operating system, not need to buy another server behind it, which they would normally have to do. I think that's very powerful because we're reducing the cost of the application deployment in that example.

InfoWorld: So you're also suggesting that the worlds of on-premise and hosted applications will always coexist?

Benioff: In that example, there isn't anybody who has delivered that J2EE run-time environment as a service. Is that an opportunity? It absolutely is a huge opportunity and I don't know why (nobody's) doing it. We are the first to put the words "on demand" and "application server" together.

InfoWorld: You're also talking about building ERP functionality into Salesforce.com.

Benioff: We demonstrated it (at Dreamforce).

InfoWorld: So clearly Salesforce.com's strategic focus is not just CRM anymore. It's also about third-party applications and your ERP applications. Does this mean you will become an ASP in a broader sense of the term?

Benioff: CRM is the big, big, big market opportunity. A lot of companies have the financials, but the (traditional on-premise) CRM thing just did not work. You're more likely to get QuickBooks running, or Solomon or Great Plains or SAP, Oracle, PeopleSoft financials than your CRM version from those guys.

InfoWorld: You frequently reference Amazon.com and eBay, indicating you want to create communities around your service. Do you think people will start front-ending Salesforce.com?

Benioff: I think that they already are doing that in many situations, but that's what we want them to do. We want them to build applications that front-end us. And customers don't even know that their data or whatever is being stored in Sforce or Salesforce.com. We want to encourage people to do that, and I think that it's in their interest to do it. It's lower cost, it's easier, it's more secure, it's more reliable, it's more available than even their internal systems. But it's a big consciousness shift from where they are today.

InfoWorld: Does that therefore mean developers will now assume responsibility for developing Salesforce.com's CRM functionality?

Benioff: I think that it's both. I think that we will always add more features and functions, like we're doing, and that we will integrate them and make them easier to use. But we also want to amplify what's happening down below architecturally.

InfoWorld: Looking ahead, how challenging will it be catering for the majority of Salesforce.com clients that move to a wireless model over time?

Benioff: I think that there's a lot of demand now that there wasn't before. I took my BlackBerry from San Francisco to London to Paris last week, and my e-mail and my wireless Salesforce.com still worked everywhere I was, and my HTML browser. I think that as we sell more units and expand the market and there's more revenue, that (the carriers) will fix (the wireless networks). They will make it more solid and have higher throughput because they have to.

InfoWorld: What is Salesforce.com's biggest challenge now that your platform is becoming more mature?

Benioff: I think it is growth. We're still growing at an unbelievably high rate, which is incredibly difficult. We need more capacity, we need more salespeople, we need more consultants just to fill the customer demand. If you listen to the users, they want more and we have to get it to them. So we need a bigger channel because the old channel is dedicated to the old product lines.

InfoWorld: What does that channel look like?

Benioff: I think the channel is a combination of us directly selling and directly servicing, and being in with new systems integrators because the old systems integrators are asleep, which is why their businesses are falling apart. (Traditional systems integrators) think that somehow, magically, the Oracle or the PeopleSoft and the Siebel businesses are going to come back and those glory days are going to be here again. They need to realize they need to either change or move away.

InfoWorld: So you think the next-generation integration business will focus on integrating legacy apps with Salesforce.com type platforms?

Benioff: It's the new channel.

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