• November 1, 2009
  • By Denis Pombriant, founder and managing principal, Beagle Research Group

The Man Who Moved a Paradigm

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I think we have enough data to call this one: Marc Benioff should go down in history — or at least the history of the software industry — for his nearly single-handed invention of on-demand computing. 

There are numerous others who could at least plausibly lay claim to that achievement, many with stronger technology credentials and some (including Larry Ellison himself) who worked, as Benioff did, at Oracle. But Benioff’s contribution goes much deeper than any of the others’ because he was the one who knew, or figured out, how to change the software market’s paradigm.

If changing a paradigm were easy, we’d already have universal healthcare and electric cars would’ve been a hit. But changing a paradigm is hard: You have to scrape one idea out of the minds of millions of people and replace it with your idea — and you have only the existing tools to do that with. 

Yet Benioff accomplished the feat with apparent ease. It’s already difficult for many of us to recall how entrenched the software industry was before Salesforce.com. There simply was no other way to deliver software back then, and few of us could imagine any alternative to buying a license, installing it, and hoping for the best. Multiple operating systems, databases, middleware — the hat trick of modern computing was to get all those planets to align. Then you needed to have the applications actually do something that could improve your productivity. Oh, and did I mention the cost?

Forgive me if I sound a little too much like a fan but I believe it’s reasonable to place Benioff in the pantheon that includes Henry Ford and possibly (though he resides on a higher plane) Thomas Edison. Ford and Edison did some amazing things but each had the relative advantage of starting with a clean slate. There were virtually no assembly lines before Ford, and no one before Edison had seriously considered how wonderful the world would be with recorded music, electric light, or motion pictures.

A shift of such magnitude requires a moment of crisis, one that provides a catalyst to change people’s minds, to reverse the inclination to say “If it ain’t broke….” Benioff found the broken part of the software industry, held it up for all to see, and never let us forget that it was broken.

“No Software” wasn’t just a marketing slogan — it was a mantra. Sure, we all laughed at Benioff’s seemingly quixotic battle against Siebel Systems — but he needed the biggest target he could find in his market. Along with a growing band of believers, he hammered away relentlessly. The Salesforce.com initial offering had few of the features and little of the functionality of the traditional CRM product but, in a world buffeted by a succession of long, expensive, and often failure-prone implementations, Salesforce.com’s solution delivered the one virtue the traditional vendors could not: It worked. Within an incredibly short time, users could be up and running and productive. 

Competitors tried to emulate Salesforce.com’s success but always seemed constrained by the conventional software box. It’s doubtful that any of them fully shared Benioff’s vision of a wholly on-demand world, and most were happy to compete on low prices rather than the true advantages of software-as-a-service. In the end, even the most-probable contenders proved unable to compete, and companies such as UpShot and Salesnet were absorbed into other entities.

Today, 10 years on, Salesforce.com is a billion-dollar company and the software industry has been irreversibly changed. This disruption and the industry spawned by Benioff and his company and his vision represent the epitome of business evolution, which, after all, has no goal other than to produce the most fit result for the present moment. It remains to be seen whether Benioff, in this new moment he helped create, will uncover another quixotic quest of the same magnitude. No matter what, it’ll certainly be interesting to watch. 

Denis Pombriant, founder and managing principal of CRM market research firm and consultancy Beagle Research Group, has been writing about CRM since January 2000, and was the first analyst to specialize in on-demand computing. His 2004 white paper, “The New Garage,” laid out the blueprint for cloud computing. He can be reached at denis@beagleresearch.com, or on Twitter (@denispombriant).

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