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After the Revolution
Salesforce.com was careening toward bankruptcy. Even Marc Benioff secretly feared his company's days were numbered. But then revenues picked up — and the revolution began in earnest. He's shown he can topple an industry — but can he lead one?
For the rest of the November 2009 issue of CRM magazine please click here
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"The last 10 years have been about these apps. The next 10 years will be a lot about the platform."

Well, for starters, the question’s already a bit outdated. Having blown right past the billion-dollar mark, and scoffing at—or even welcoming—a recessionary economy, Salesforce.com’s up to a $1.2 billion run rate, and projects its 2010 fiscal year (ending in January) will top out near $1.3 billion. (See “The 10-Year Timeline” for more on the company’s revenue growth and milestones.) 

So “the next billion” will require only (only!) another $700 million or so a year—but that still means generating 50 percent more revenue than Salesforce.com makes now. Can the company close that distance? 

Perhaps, but if a precipitous decline in the rate of annual revenue growth is any indication, Salesforce CRM’s days of massive expansion may be over. Even as the company successfully hammered away at its billion-dollar revenue goal, its growth rate is what got nailed: 2006’s 76 percent jump in revenue over fiscal year 2005 became 60 percent in 2007, then 50 percent in 2008, slipping to 44 percent in 2009, and, if projections hold true, just 16 percent in fiscal year 2010. 

Salesforce.com, in other words, needs a new spigot—and Benioff, to his credit, not only has already found one, but claims to have been priming the pump for several years, eager for the moment to turn on the tap.

“The last 10 years have been about these apps,” Benioff said, in an exclusive interview with CRM. “The next 10 years will be a lot about the platform.” (For more excerpts from that interview, see “The Cloud Pleaser,” page 28.) The success of that transition hinges on Salesforce.com’s—and Benioff’s—ability to shift gears from a software-as-a-service (SaaS) vendor delivering applications to a cloud-computing ecosystem focused on platforms and infrastructure.

Industry observers have long known (or long ago learned the hard way) not to bet against Benioff, who in a typical room of software folks or corporate executives stands head-and-shoulders above the rest—metaphorically and, at 6 feet, 5 inches tall, literally as well. Even those most passionate about Benioff—and passions about him and his company run to both extremes—may discover newfound ammunition in his latest book, Behind the Cloud. The memoir, cowritten with Carlye Adler, is structured as a kind of playbook comprising 111 plays derived from the company’s origins and Benioff’s own inspirations and processes. (See this month’s Required Reading, page 36, for our frank conversation with Adler about the challenge posed by Benioff’s legendary loquaciousness.)

The last 10 years in the CRM industry have been a magical mystery tour guided by Salesforce.com and Benioff, as likely to be filled with fanfare and grand innovations as with blazing misfires and abandoned initiatives. That’s been part of the thrill. But our tour guides have also been a study in outsized contradictions—and, as if in defiance of the very existence of recursion, the repeated contradictions eventually produce a kind of consistency of their very own.

“Solicit employee feedback,” Benioff writes in Behind the Cloud, “and act on it.” And yet, recalling the genesis of the iconic “No Software” logo, he allowed his love for the image to carry the day, even though, as he puts it, “almost everyone else hated it.” In fact, he writes, “even the people on the Salesforce.com team believed that moving forward with this slogan and logo was a disastrous idea.” Sure, he turned out to be right, but so much for acting on employee feedback.

Benioff professes to be “a believer in the power of public relations”—and anyone who’s spent even a short time in his presence would scarcely disagree. “If the press loves it, so do I,” he writes at one point, disingenuously reversing the equation he applies to the many times he’s hand-fed media outlets stories he fully expects them to love because he already does.

He writes that “it’s significantly cheaper to encourage a journalist to write a story than it is to buy an ad in the Wall Street Journal,” the cost of which is “an unreasonable amount considering that most people won’t buy a service because they saw it in an ad.” And yet, just a few pages earlier, Benioff recounts with well-deserved glee the response to an ad Salesforce.com had taken out to launch its “End of Software” revolution—taken out, ironically enough, in the Wall Street Journal! “Its audacity drew even more attention to Salesforce.com,” he writes.

Remarkably, Benioff admits upfront that the key to success has got nothing to do with building a better mousetrap. “A brand,” he writes, “is a company’s most important asset. A company can’t ‘own’ its facts. If the company’s facts (speed, price, quality) are superior to the competition[’s], any good competitor will duplicate them, or worse, improve upon them, as soon as possible. What a company can own, however, is a personality.” And the personality Salesforce.com owns? Benioff describes it as “future-focused and pioneering”—no wonder, since that personality happens to parallel his own.

Fair enough, but what happens when the pioneer becomes predictable? When the upstart becomes the leader? When David becomes Goliath? 

“We act the way people expect us to,” he says. No, wait—you want to defy expectations: “The most important rule in marketing [is] the necessity to differentiate your brand.” As tempting as it may be to suggest to Benioff that he can’t have it both ways, the reality is that he—and his company—have been successfully threading that needle for a decade now.

Thirteen things you may not have known about Marc Benioff:

  1. His grandfather helped create BART, San Francisco’s transit system.
  2. He had a summer gig at Apple Computer in 1984, writing code for the early Macintosh.
  3. His first job at Oracle was in the customer service department, answering calls to the company’s toll-free number.
  4. He was promoted to handle Oracle’s direct marketing based on the recommendation of his predecessor—Tom Siebel. 
  5. He invested $50,000 in Siebel’s new company—an investment that reportedly netted Benioff $20 million after Siebel Systems went public.
  6. During a sabbatical from Oracle, he had what he calls “an incredible awakening” in India that included a run-in with His Holiness the Dalai Lama.
  7. He cofounded Salesforce.com with three guys he had never even met until a few months earlier (including current Executive Vice President of Technology Parker Harris).
  8. He’s a fan of Sun Tzu’s The Art of War.
  9. His golden retriever became Salesforce.com’s “CLO” (chief love officer).
  10. For the first few months, he was still working at Oracle in the afternoons as he spent his mornings at Salesforce.com.
  11. On the night of Salesforce.com’s infamous launch party, he proclaimed, “We’re going to be the last dot-com.”
  12. In the early days, he purposefully timed Salesforce.com press releases to coincide with the days Siebel announced its quarterly re
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