Benioff To Ballmer: 'Now That's Efficient!'

(MoneyWatch)  Microsoft CEO Steve Ballmer didn't make a lot of friends last week when he wrote that, with corporate budgets shrinking, customers will turn to Microsoft to get more technology bang for their beleaguered bucks.

Salesforce.com CEO Marc Benioff is the most recent to express his displeasure while describing his cloud-based company's growth and introducing new features to the company's call center technology during a conference I attended at the Mandarin Oriental hotel in New York City. Benioff boasted that his company runs applications for its 63,000 customers on only 1,500 PC servers -- 500 on the West Coast, 500 on the East Coast, and 500 in Singapore. "Now that's efficient," he gloated.

It's hard to imagine Microsoft using less than ten times that number of servers, which is understandable given that the company hosts millions of consumer email accounts and applications in addition to everything else it does, but Microsoft is fragmented into so many business units that it's also fair to question its ability to ever rationalize the number of servers its running.

Ballmer also got a rise out of IBM CEO Sam Palmisano, who tartly noted that companies [read Microsoft] get trapped in the past because of their "cultural resistance to change."

Benioff had another bit of news that must have been hard for Ballmer to hear: the on-demand software vendor is reducing its upgrade window to just five minutes. (Salesforce.com updates its software three times a year to its entire customer base, usually overnight on weekends, but with the occasional hiccup keeping applications offline longer than expected.) That's not just efficient, but chips away at another taking point traditional software vendors like to use, which is that SaaS vendors have to take their applications down to upgrade them, and do it when they think it's most convenient. If Salesforce.com really does get upgrade windows down to five minutes, it will be hardly worth the time to talk about.