Salesforce CEO Shares Strategy

Last Updated Oct 30, 2009 5:03 PM EDT

Salesforce.com CEO Marc Benioff's new book, Behind the Cloud, is remarkable if for no other reason that it's a candid account of the company's growing pains and isn't just the usual self-serving claptrap when it comes to Benioff's own career. Benioff also shares strategy about how the company intends to maintain its edge, even after having established itself as the market leader in the cloud-based software market.

Competitors, both cloud vendors like NetSuite (N), as well as traditional business software vendors like SAP (SAP), Oracle (ORCL) and Microsoft (MSFT), should take heed that while Salesforce.com (CRM) will probably not reject its basic principles (such as a multi-tenant architecture, in which all customers share the same instance of the software and have their data stored on common servers), the company isn't afraid to reverse field and adapt to changes in the market and its own fortunes.

One of the most compelling stories Benioff tells is about his company's controversial decision to ditch giving customers free access to the site for some of the more complicated implementations. At the time, Salesforce.com was giving away free trials of the company's cloud-based software (the company marketed this as "try and buy") in order to convince customers that it was easy to implement and user-friendly. But the approach also encouraged business users to circumvent corporate IT departments, which some Salesforce executives realized wouldn't help Salesforce's long-term ambitions in the enterprise market.

Benioff resisted this change, but eventually gave in, as he describes:

One of the changes we made was the introduction of a more complex trial--a proof of concept that demonstrated to larger companies that we could customize the solution to their needs. In acknowledgement of the increased costs of building more complex trials and our desire for a greater investment from users, we evolved the free trial to a "buy and try" experience. We found that with skin in the game on both sides, we were able to connect more easily with the appropriate business and technical constituents and win organization-wide support.
Salesforce contends that a third of its business is generated by enterprise customers, and it has by and large proven its business model, at least to the user and analyst community (although shareholders may have reason to worry about margin growth).

Benioff writes that the company remains a guerilla marketing engine at heart, even as it's outgrowing childish stunts like staging mock protests outside user conferences organized by rivals.

Our current strategy: evolving our unconventional tactics to beat bigger competitors and overcome new challenges-- We might be the market leader now, but that doesn't mean we're complacent or see our work as done. We have evolved our mission from replacing one legacy company to toppling the entire traditional software establishment to transforming the entire industry. Our current battle: we have to save the customer from Microsoft, Oracle and SAP.
[Image source: mkrigsman via Flickr]
  • Michael Hickins

    Michael Hickins has written about technology and business for BNET, InformationWeek, InternetNews.com, eWEEK -- where he was executive editor from 2007-2008 -- The Curator, Pseudo.com, Multex Investor, Reuters, and Conde Nast's WWD.com. Hickins is the author of The Actual Adventures of Michael Missing, a collection of short stories published by Alfred A. Knopf in 1991. He also published Blomqvist, a picaresque novel set in 11th century Europe, in 2006. Hickins remains passionately interested in the intersections of business, technology, politics and culture, and endures a life-long obsession with baseball. He is married with two children and lives in Manhattan.