The Cloud Pleaser
Myron: What advice have you been giving these customers?
Benioff: I have encouraged customers and my own staff to really focus on the basics, to really focus on making sure they’re invested in their core niches, and to not take as many risks right now with regards to new geographies or new levels of expansion, but rather to focus on their core customers and then worry about the new areas when the economy starts to recover, probably next year.
Weinberger: Does that apply as much to Salesforce.com as well? In terms of product development, you’ve launched quite a few products recently.
Benioff: Yeah. We’re planning on launching a lot of new, exciting products and working on some big, new products for Dreamforce. [Editors’ Note: In the weeks following this conversation, Salesforce.com launched or announced several of these products: Salesforce Contact Manager, for low-end one- and two-seat deployments; the updated Service Cloud 2 with Salesforce Knowledge and Salesforce Answers; and a telephony integration with Cisco Systems for contact centers.] We’re introducing a lot of innovation and new product development, but at the same time we are really doubling down on that core customer.
Weinberger: In terms of adoption, are you looking to get existing customers to take on more seats, more functionality? How are you trying to get them to adopt?
Benioff: A lot of them are Sales Cloud customers already and I want them to look at customer service in the platform as a way that we can expand with them and do a better job of helping them improve their overall cost structures and be more successful with cloud computing. That’s why you’re seeing us close so many more new call center and contact center opportunities. We just got placed in Gartner’s Magic Quadrant on Customer Service. That was pretty impressive. I think the reason why we’re the only cloud offering in the Leader Quadrant is because customers need these new solutions.
Weinberger: You didn’t have a [complete] customer service option for the longest time. At what point did you realize that you needed to go out and buy it?
Benioff:We had been working on it for a long time. Your question is a good indication that we weren’t doing a very good job of communicating. We added to it with the [August 2008] InStranet acquisition…with the knowledge-base capabilities, but we had already at that point had about 5,000 customers using it. I just don’t think that we were doing an effective job marketing and selling it. InStranet took us to a new level.
Myron: You say in your book to attack the market leader—in your case, it was Siebel Systems. When competing against Siebel you maintained that the on-premises model is too expensive and takes too much time to implement. With so many competitors offering CRM in the cloud and SaaS CRM, when you position yourself against competitors is your message as compelling as it once was?Benioff: It’s as compelling, but it’s made the market so much bigger. For CRM, it may be that the only opportunity is in the cloud now. All these guys coming in have really helped us to make the market size bigger and change the consciousness…. [Microsoft has] certainly done a good job with onpremises, but they haven’t done a good job in the cloud. But they’ve helped us and others have helped us to validate the cloud structure and to make every decision a cloud decision. We have the most struggles with customers trying to decide between on-premises and cloud. If they’re going to choose cloud, then they probably should go with us, because we’re the best.