As more companies run business applications not on their own networks but entirely on the Web, the concept of cloud computing has gone mainstream. Perhaps no one can explain the phenomenon better than Marc Benioff, chairman and CEO of Salesforce.com, and the father of the enterprise cloud computing industry. In less than a decade, Benioff took Salesforce.com from the bedroom of a rented apartment to being a leader in the SaaS market with more than 63,000 customers and $1 billion in annual revenue. On the eve of the company's tenth Anniversary, Benioff has authored Behind the Cloud, a book that explains how he built one of the world's fastest-growing software companies that has helped businesses big and small transform their operations. Inc. reporter Tamara Schweitzer sat down with Benioff.
When you started Salesforce.com in 1999, Web-based software was virtually unheard of. Looking back, what convinced you that the idea was going to work?
When I was at Oracle in 1996, we were working with Amazon.com in architecting their system. And I said, If Amazon could build a system to deliver books, then we can deliver business functionality through the same technology model. What we were really able to do is stand on the shoulders of giants like Amazon and eBay and other consumer services who had pioneered this idea but for consumer ecommerce, or search, or for auctions. What we were able to show is how companies could run all their business information that same exact way.
How are companies that use cloud computing different from those that aren't?
Companies that use cloud computing don't have to worry about upgrades, maintenance, security patches, hardware tuning or any of that stuff. Businesses that use our applications can focus on their customers, grow sales, and deliver great service. At small businesses that don't have formal IT departments, this frees up critical resources. At larger ones with IT departments, IT can start delivering new apps, and stop worrying about hardware and software hassles. It's a completely different way of managing your data and your business.
Do you have an example of a small business that is using cloud computing particularly well?
There's a great company called Vetrazzo: They crush recycled glass and turn it into kitchen counter tops—it's very cool. The CEO is a guy named Jim Sheppard and he's able to take our services, not just CRM, but our platform called Force.com and he runs an entire business on Salesforce and Force.com. He's built manufacturing, inventory, and customer management systems on it—and he's one of the fastest-growing companies in environmental products. The power of that is as he grows and gets bigger and scales and gets more successful, he doesn't have to change systems because we can go higher when he goes higher. You can be a business of any size—small, medium, or large—but if you're a small business about to turn into a big business like Vetrazzo, we're ideal for you because you can focus on your business, not your software.
You pioneered the idea of CRM, or customer relationship management. What do small businesses need to know about effective CRM?
I think the most important thing is that companies don't need to buy software and hardware and take on complexity and risks in deploying their computing solutions. Instead, they can use cloud computing and have the same power of big business but at a fraction of the price. A good example of that is in the computer industry. We at Salesforce run systems for some of the biggest companies like Dell and Cisco and others, but new technology start-ups that are just coming along with five-to-ten employees are using the same systems. So they're having the same power as Cisco and Dell to run their businesses. That's new, that's exciting.
In a tough selling environment, what should small businesses be focusing on in their sales and marketing efforts going forward?
When the economy is booming, companies spend a lot less time worrying about their sales and marketing productivity. But in times like these, you need to know which marketing dollars are performing, and which ones aren't. Which sales reps are crushing their quotas, and which ones need help. In a macro environment where there is little growth, these questions become a matter of survival for small businesses.