Microsoft Hires Callidus Leader

After more than two years at sales performance management software vendor Callidus Software, Robert Youngjohns stepped down Monday as the company's president and chief executive officer. Leslie Stretch, senior vice president of global sales, marketing, and on-demand, will replace him as president and CEO of Callidus. Youngjohns will become president of Microsoft's North American sales and marketing team. San Jose, Calif.-based Callidus, which makes software that ties companies' employee compensation to business goals, scrambled Tuesday to articulate a message about the change in leadership. "This happened fairly quickly," says a Callidus public relations representative. Youngjohns, who had been with Callidus more than two years, will now manage an 8,500-person Microsoft sales force. That team is a major contributor to Microsoft's revenue -- which totaled more than $51 billion in fiscal year 2007 -- according to a Microsoft statement. A Microsoft spokesperson credited Youngjohns with doubling Callidus' size during his tenure, and achieving 45 percent year-on-year growth. "Callidus has a good traditional product and enjoyed a large market share under Youngjohns' leadership," says Denis Pombriant, managing principal of CRM analysis firm Beagle Research Group. Pombriant notes Youngjohns' long-held belief in on-demand software, and suggests it will be interesting to see the impact of those beliefs at Microsoft. Callidus originally sold on-premise software but recently released an on-demand solution that implements single-tenant architecture. Earlier this year, Youngjohns authored a widely circulated essay under the attention-grabbing headline: "The On-Demand Cult." On-demand, Youngjohns wrote, is seen by many as the only true path for success in the software industry. "So what exactly is it?" he asked in the essay. "At best it's a marketing catchphrase. At worst it's a cynical attempt to separate eager venture capitalists from their cash." In particular, the essay skewered multitenant on-demand software, Pombriant says. Youngjohns then went on to speak about Callidus's own single-tenant on-demand offering: "We believe that infrastructure is best done by others," he wrote. "I want every cent of our development budget going into enhancing the value of our application, not devising ways to build ever-more-complex infrastructure. With this in mind, we decided to exploit the fact that our software is already grid-enabled, and to team with the Sun Microsystems grid computing initiative to deliver our own software on-demand." Microsoft has been turning to on-demand in recent days, Pombriant says. "Microsoft is trying a lot of different things with CRM and it's recently announced it'll be providing a flavor of on-demand for its resellers," he says. In fact, last summer, the company announcing a pricing structure for its Microsoft Dynamics Live CRM on-demand product intended to undercut the competition. That particular on-demand mode of Microsoft Dynamics uses the same code base as the on-premise and partner-hosted versions of Microsoft Dynamics CRM. "It remains to be seen what direction that'll take under Youngjohns," Pombriant says, who adds that the newest Microsoft Dynamics release "both is and isn't an on-demand flavor." Before joining Callidus, Youngjohns spent 10 years at Sun Microsystems in a series of leadership positions, including executive vice president of global sales. He also spent 18 years in various roles at IBM. He'll continue to serve on the Callidus board of directors after he joins Microsoft on Dec. 3.

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