Despite Salesforce.com holding the biggest vendor-led conference in the world this week, and despite it having over 100,000 customers and a 13-year history, the company is still a start-up, according to its chief scientist JP Rangaswami.
It’s difficult to agree with the urbane former BT man, considering the scale of the Dreamforce 2012 conference and the company’s sizeable customer base. Few start-ups can boast about $2 billion of revenue in a fiscal year either. Then again, the lack of profit, and loss making, does hint that Salesforce.com at least acts like a start-up. It is taking the scale first, profit later approach that is synonymous with start-ups, especially cloud-focused ones that have to devote a lot of capex to data centres.
Even the conference itself, now in its 10th year, has an air of youth, eschewing the fuddy-duddy miasma that followed tech conferences of yore around the globe. Red Hot Chilli Peppers played this year. As did MC Hammer… OK, so the moribund musical talent on show wasn’t quite reflective of the vendor’s vibrancy, but putting on such lavish shows proves Salesforce.com is quite literally making a song and dance about what it claims to be doing – namely, innovating.
And Rangaswami wants the company to stay that way – forever young, as Bob Dylan (and Alphaville) once sang. “When you look at the way we behave we are like a start-up – in how people make decisions, how we talk,” he says.
“I hope it never stops being a start-up – with the ability to have a relatively flat organisation with passionate people prepared to put all their time and energy into it, the ability to ship a product out quickly and to learn from it and adapt, to keep the customer as a key stakeholder within the process, and the reliance on being able to attract and retain really dynamic, progressive talent to make that happen.
“Those are the sorts of things I consider representative of a start-up. I see them in this 13-year-old company and I’m delighted to say that. If it had become fossilised I would never have joined.” Rangaswami joined the company less than two years ago.
But where does Salesforce.com’s vitality come from? Largely from other people’s ideas. Salesforce.com has handpicked what it considers the best technological and strategical aspects of Amazon and Facebook and sold them to enterprise.
Many believe the cloud and social worlds will start to gather around the ideas of those two firms. All clouds will start to look like Amazon, and all software will start to look like Facebook because of how they have defined their respective industries. Or so the theory goes. And Rangaswami thinks the two are related. “Rather than see them as two competing factions, while there are differences, I think they are part of an evolution. I’ve seen, in observing Salesforce, that we’ve been tracking that evolution,” he told TechWeekEurope.
Indeed, in the early days of the company, when Marc Benioff and Parker Harris co-founded the firm, they looked at Amazon’s business model of offering digital goods online in a consistent, global way and wondered why business apps couldn’t be delivered in a similar way.
Facebook then represented an evolution of Amazon, Rangaswami says, happily admitting that Saleforce has been influenced by both. “Between 1995 as Amazon was being formed, and 2006 as Facebook was being formed, the proliferation of devices and ubiquity of access meant that data moved to being more real-time,” he says. “Facebook was saying you have to be about feeds rather than tabs. And we are now used to a feed-based world rather than a tab-based world.
“Amazon set up the right construct and Facebook evolved that construct and we’ve learnt off of both. Our customers are saying they want the real-time data, they want the feeds.
“I think all software will start looking like Amazon, in terms of being cloud-based, device independent, etc. I think all software will start looking like Amazon and Facebook in terms of being reliant of good analytics and personalisation.”
He also sees Amazon, Facebook and Google as three of the finest examples of the power of web analytics, using it in a social way to acquire and influence customers. “They learn and refine everything.”
Salesforce.com is clearly following the lead of those three tech giants in its social and cloud-led strategy, whilst adding features that businesses are hungry for. Benioff himself heaped praise on Facebook this week, and Chatter, one of its key products, is modelled on Facebook and Twitter in providing enterprises with social streams of data.
But there are some areas where Salesforce.com is not following Facebook or Amazon. In the data centre space, it is still relying on an ecosystem of different vendors, although it is believed much of its server infrastructure is based on Dell.
But Amazon, Facebook and Google are thought to be disassociating themselves from core server sellers, such as Dell, HP and IBM. Instead, they have reportedly chosen to design their own hardware, using the power of super-smart software to have significant scale-out capabilities, and going direct to original device manufacturers (ODMs) to get their gear or even making it themselves. According to a recent Wired article, Google is now the fifth biggest server maker in the world, meaning it doesn’t even go to ODMs.
Yet Rangaswami says Salesforce won’t be going down that route anytime soon. “Our attitude has been not to be all things to all men, so if someone else has built those services, we will use those services rather than decide to get into the hardware business service ourselves and engineer our own stuff,” he says.
“We really believe in ecosystems. It’s a different form of ambition. We want to provide services to all enterprises and help them transform, but we will help them do it in part by getting the infrastructure from people who are the domain experts in that.”
It was also notable that Salesforce.com did not bid for any gTLDs when ICANN put them up for sale earlier this year. Google and Amazon have put vast sums of money aside as they look to get their hands on names like .cloud and .mail. Certainly, those are names that Salesforce is associated with, but Rangaswami said the company just didn’t see it as a wise investment.
“You’re not buying a domain name there, you are bidding to be a registrar. You take over all the responsibilities for taking over that top level domain. We don’t believe we need to be in that business… It’s not a happy [place].
“If we found that a percentage of our activity was used up on providing domain name registration services to third parties, there would be a lot of us very upset, asking ‘is that the business we want to be in’?”
Perhaps the fact that the .com TLD is a key part of its brand message was a key influencer too. Salesforce.com will continue to buy more domain names, Rangaswami adds. But it’s unlikely they will have anything other than the .com suffix.
In some key new areas then, Salesforce does differ from its cloudy muses of Amazon, Google and Facebook. But, much like Apple under Steve Jobs, Salesforce.com is borrowing good, fresh ideas from hugely successful, young vendors – all of whom can be considered as rivals. As we’ve seen this week, Salesforce.com is also very good at convincing customers that those ideas are what businesses need.
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