Marc Benioff taunts the awakened dinosaurs

Disparaging large competitors is part of Salesforce.com CEO Marc Benioff's marketing offensive. He characterizes Microsoft as a dinosaur, past its prime, as if it will hold off the company that Gates built from eating his lunch someday.

Charlie Cooper and I interviewed Salesforce.com CEO Marc Benioff last week. Following is part of the exchange, where I asked Benioff for his thoughts on Microsoft. He has called Microsoft a dinosaur, incapable of innovation, and a monopolist.

Salesforce.com CEO Marc Benioff Dan Farber/CNET News

Disparaging large competitors is part of Benioff's marketing offensive. He has taken shots at SAP, Oracle, Siebel, and others, dismissing them as 20th century fossils who are making feeble attempts to adapt to Web and cloud computing.

His braggadocio has garnered Salesforce.com loads of attention since its inception nine years ago. What's somewhat mystifying is how competitors have stood by while Salesforce.com heads toward $1 billion in revenue for its next fiscal year, ending January 31, 2009.

During the interview Benioff said of Microsoft, "...there is no acknowledgment to some of the core tenets of this new paradigm." He is not overly impressed by Microsoft's newfound and aggressive focus on the Web as a platform, as driven by Chief Software Architect Ray Ozzie.

Microsoft has been slow to adopt the multitenant architecture. The company is prepping Dynamics CRM 4, also known as CRM Live, to go after Salesforce.com, as well as bringing other products in the Dynamics family into a hosted, multitenant environment. Phil Wainewright pointed out in his ZDNet blog post, Microsoft hasn't publicly put services fully at the forefront of its strategy:

Publicly, Microsoft talks up the merits of its 'software-plus-services' strategy. In my view, the message is bunkum, even though it reflects the reality of Microsoft's business today: mostly software, with a few early-stage service offerings. But Microsoft has its message back-to-front. Until Microsoft reverses the software-plus-services mantra and puts services at the forefront of its vision, it will continue to disappoint.
I know many people want to believe Microsoft still remains in charge of its destiny and won't let cloud rivals walk all over it. But time after time, history shows that it's fresh startups, not incumbent giants, that gain leadership in new technologies and markets. I guess we're just wired to expect those who wield power to stay in place. But the truth is that, at times of change, it takes a change of leader to adapt to the new circumstances.
Recent pronouncements by chief strategy officer Ray Ozzie suggest that, despite the public bluster, Microsoft's top brass already secretly realize that they must put services, not software, at the center of their worldview (the world of the mesh, Ozzie calls it).

But, if you listen to Ozzie carefully, he is sending clear signals that point to software services and synchronization across all devices, online and offline. It's not a pure services model, because users do want to work offline at times. Even Salesforce.com and Google recognize the hybrid working model with their efforts to provide offline access.

Microsoft's oligarchs and other large software companies recognize that the shift to the cloud is a critical path. Benioff better run even faster, before the dinosaurs catch up a la Jurassic Park. You can bet that if the dinosaurs start to close in, he will run into the arms of one of the older dinosaurs, including Microsoft, or the new breed, such as Google.

Following is a portion of the full interview:

Q: In 2005 you said that Microsoft was a dinosaur facing the obsolescence of a technology and a business model. Fast-forward to 2008 and Microsoft just had a big event in Las Vegas, where Chief Software Architect Ray Ozzie got up onstage and articulated a vision that had a lot of similarities to what you're talking about vis a vis platform as a service, such as its SQL Server data services. So, has your opinion changed?
Benioff: No. If we had waited for Microsoft to create any of those, nothing would be created yet. Look at the whole software service phenomenon. Where are they? I think Microsoft is still a dinosaur.

Q: But what I'm asking today is whether you have changed your opinion. Do you think that Microsoft is still a dinosaur?
Benioff:I think Microsoft is still a dinosaur. More than ever, it tries to hold onto its monopolistic position around technology that they hold, whether it's SQL Server, whether it's NT, whether it's Windows, whether it's Office--these are their cash cows they don't want slaughtered.

Q: But are those cash cows monopolies?
Benioff: Well, I think one was ruled a monopoly.

Q:Right, but we're talking about SQL Server. We're talking about their software-as-a-service strategy, and so on. Can we consider those monopolistic?
Benioff: Well, not in the same way, of course. But the point is that they're trying to hold onto their past more than trying to create their future. This has been the great failing of Microsoft over the last 10 years. I haven't seen the level of innovation from them that we see from other vendors.

Q: As the concept of the platform as a service becomes more of a reality over the next decade, do you think that Microsoft has an opportunity to be one of the big platforms?
Benioff: The evidence is that history, more or less, will repeat itself because there is no acknowledgment to some of the core tenants of this new paradigm. I think only in the cases where they will be dragged, kicking and screaming, and I think the best example probably is Gmail.

Google is doing really well with Gmail. I think that's why now you will see Microsoft have to respond with a multitenant e-mail solution. They have Hotmail, but not Hotmail for business per se. They're definitely going to have to do that.

Q: With Ozzie taking over as chief software architect, Microsoft is talking more about how to take the plunge in software services. So where do you see the chief obstacle preventing them from turning this into a success? They've got all the developers in the world.
Benioff: I am not the CEO of Microsoft so I don't really know. You'd have to ask them why they haven't delivered on the vision. We're not unique in saying that it's the end of software. That's our phrase, but Microsoft has not delivered on the promise. They haven't used their power to innovate in the way that others have.

 

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