What Salesforce.com's CEO Needs to Understand About Enterprise Software

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Includes: AMZN, CRM, IBM, MSFT
by: Dennis Byron

Marc Benioff, chairman and CEO of salesforce.com (NYSE:CRM) wrote an op-ed/blog post recently that is getting a lot of attention. It proves that there is nothing like posting a gangbuster financial year in down times like 2009, as Salesforce did on February 24, to get picked up in the mainstream media.

In his post, Benioff asks a couple of simple questions relative to enterprise software:

"Why isn't all software like Amazon.com (NASDAQ:AMZN)?"
"Why isn't all enterprise software like Facebook?"

By being "like Amazon.com," he is advocating that all software be like most Salesforce offerings that "run from a simple website, without software or hardware to install, and pricy consultants to hire." By being "like Facebook," he is asking why all enterprise software lacks the characteristics "of feeds, profiles, and groups", particularly "feeds." He says,

"Everything I care about and need to know is pushed to me; it requires no work on my part."

It's interesting that an enterprise software company executive is hyping FaceBook-like features just as comedians such as Colbert on Comedy Central said something along the lines that 90% of employees spent all day on FaceBook instead of doing their work (the way he said it was funny). Even the evening TV news programs dumped all over the lost productivity caused by FaceBook in business when the service went down for a few hours last weekend.

Benioff also claims IBM Lotus Notes and Microsoft (NASDAQ:MSFT) SharePoint lack these characteristics, "that these tools haven't kept up with the changing times." I don't believe the last statement because I think that except for some platform restrictions, Notes, Microsoft Office products (not just Sharepoint), and their predecessors such as DEC All-in-One, Wang Office, and DG's CEO have had these features all along, as long as 30 years ago. I'll let IBM and Microsoft defend themselves but the reason that workers don't use these characteristics the way Benioff thinks they ought to is that they slow down the work process, not speed it up. There's a lot to be said for a simple phone call.

And the reason that all software is not like Amazon.com and salesforce.com is because not all companies sell books. And not all software tracks sales calls. (I assume Benioff means "like" Amazon.com's in-house developed retail point of sale software because we don't see its merchandise management or other most likely more complex but less trendy back office software.)

The real issue is that many people, presumably including Benioff, need to work on "the cool stuff" (or "what's hot," depending on whatever the popular phrase for "in" is these days). But, sorry, charts of accounts, bills of material, pick/pack lists, bills of lading, demand-deposit accounting, managing acturarial tables, and so forth just aren't cool. If you want to be in the enterprise software business, Mr. Benioff, just accept that.

Disclosure: The author has no financial interest in the companies mentioned above.