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Marc Benioff and Salesforce.com

May 10th, 2004 · No Comments

NYTimes profiles Marc Benioff, the CEO of Salesforce.com, which is the other big forthcoming tech IPO:

His company’s revenue has at least doubled every year since 2001, and was $96 million in the fiscal year that ended on Jan. 31. The business has had a profit for three quarters in a row, but showed a $1 million loss in the most recent quarter.

Salesforce also provides the perfect lens for watching one of the more interesting – and potentially significant – trends in computers.

Mr. Benioff is inclined to use the word “revolutionary” to describe his service, and not without reason. Unlike most software makers, Salesforce does not sell a product that is installed in the buyer’s computer. Instead, the company leases software to subscribers who pay a monthly fee. The company maintains its customer-related software on its own computers; subscribers can visit Salesforce.com whenever they choose, courtesy of an Internet browser much like one that would connect to, say, Amazon.com.

Mr. Benioff did not invent this notion of software as a service. It dates back to mainframe computers in the 1960’s. But he has become its most forceful advocate, taking any opportunity to declare the era of installed software dead and to taunt larger foes who use that method. He has focused mostly on the $7 billion customer-relations market, now dominated by Siebel Systems. But he has said in the past that the simplicity of his software-as-service strategy will allow him to cash in on other rich markets, including human resources software and invoice management.

His formal career began in 1986, when he was 22: he was offered a phone sales job at Oracle shortly after it went public. Mr. Benioff quickly climbed the Oracle ladder, working a variety of sales and marketing jobs with increasing responsibility. At 26, he was named marketing director of the company’s fledgling efforts to secure its core database product a place on personal computers – in no small part, he said, because he had quickly become a favorite of Mr. Ellison.

Salesforce has signed up 10,000 customers and nearly 140,000 users, each of whom pays $65 to $125 a month for access to smartly organized storehouses of information about their customers and potential clients that Salesforce maintains on its computers. Mr. Benioff says he is convinced that more and more companies will lease their software via the Internet.

One percent of Salesforce’s profits are diverted to a foundation that Mr. Benioff created when founding his company, and employees get six extra days off a year to volunteer in any community program. The foundation also owns 1 percent of Salesforce’s stock. That, too, has become a cause. Just as he has spent much of the last five years declaring the end of software, he now calls for an overhaul of corporate philanthropy.

Tags: Enterprise Software

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