Salesforce Riding High, Opens Dreamforce
Salesforce.com is riding the crest of wave after wave of good news as it starts Dreamforce, its annual convocation for customers, prospects, the press and analyst communities. Forty thousand people are expected in San Francisco for the event at some point in the week.
In a sign of how big this event has become, last night I saw work crews closing down Howard Street by the Moscone Center. They were erecting what looked like a structure on the street to turn it into some kind of pedestrian area. Only Oracle, one of Salesforce’s biggest competitors (and curiously Salesforce is among Oracle’s largest database customers) ever does this when they attract similarly sized crowds to their annual meeting, Oracle OpenWorld. If you need symbolism for how large Dreamforce has become, you can’t do better than that.
But back to Salesforce.
The company is riding high after reporting strong revenue numbers and that it is on track to generate well over two billion dollars in business in its current fiscal year. The company has raised its guidance to financial analysts.
Salesforce CEO, Marc Benioff, is on the cover of Forbes magazine, which announces a cover story on the “Fifty Best Companies Of Tomorrow”. Salesforce has the number one spot and the ranking was done by none other than Clayton Christensen, the Harvard Business School professor, who coined the term “innovator’s dilemma” in a series of books by that title.
Forbes is the same magazine that once ran a cover story on Tom Siebel with the headline “The Man Who Can See Around Corners”. It was about how Siebel and his customers, using analytics software, were able to spot a slowdown in the economy and adjust their businesses well ahead of their competition.
But Benioff took a page from Christensen’s book and completely disrupted Siebel and he is well on the way to disrupting the whole software industry and beyond. Salesforce is in the process of doing nothing less than introducing a new paradigm for the way that companies do business, deal with customers and fit into the world.
Remarkably Salesforce’s competition is comparatively stuck in the mud trying to figure out how to move beyond traditional enterprise computing with its high costs and long delivery cycles. Salesforce has forced them to take a fresh look at computing and customers and they have largely responded with bandages for their legacy products. They’ve adopted what is easiest about software as a service (SaaS) and borrowed the term “cloud computing” to lend it the cache of relevance. But while that might be enough to continue making money on legacy software, it’s a dead end and other CEOs — notably Tien Tzuo of Zuora, a billing and payments solution for subscription economy companies — are making bold predictions. For example, earlier this week Tzuo predicted the death of conventional ERP software. Tzuo had a single digit employee number at Salesforce before he started Zuora, by the way.
So if you are Salesforce and Benioff, what better day is there for Cornell University to come out with a new study on creativity — “The bias against creativity: Why people desire but reject creative ideas.”
According to Jack Goncalo, assistant professor of organizational behavior at the Cornell University ILR School and the co-author of the research, which will be published in an upcoming issue of the journal Psychological Science people love creative ideas but they reject them because we all have a bias for certainty and creative ideas raise uncertainty.
That is in microcosm what the software industry has been going through for the last decade. Many of the people who sell and buy legacy software might be afraid of change for the disruption it may cause. But if you read Christensen you understand that disruption is the key to innovation and profits. It’s an idea Benioff and his tribe have no trouble dealing with and they have no trouble dealing with the rewards either.
Over the last decade you could have discovered what the Cornell researchers discovered just by watching Salesforce. Today you can read the Cornell study or just buy a copy of Forbes.
Facebook Adds Email
The social media market reached a kind of saturation point yesterday when Mark Zuckerberg, CEO of Facebook, announced a new service that is not email but that looks suspiciously like it.
According to various reports, the new service assigns an email address to each Facebook user which provides a consolidated look at all of a user’s email, Facebook messages and SMS and chat as well. The service can sort incoming messages into three groupings—all messages, full conversation history (regardless of medium) and messages you want. Inside the inbox messages are sorted into “Messages” i.e. the good stuff, “Others” or the things you might get to and “Junk” where offers for cheap Viagra, timeshares and letters from foreign widows with millions of dollars to launder and bad spelling will be shunted.
My analysis
This may represent the social media market’s saturation, a kind of shark jumping, because it breaks no new ground, adds no new media or communication channels. It simply consolidates digital/social communication and perhaps makes using it a bit faster. Previously, if I received a new message on Facebook I would get an email. I hope that doesn’t change because I don’t live on the service and I need another email address like I need another credit card whose offers fill up my snail mailbox.
Mike Isaac covered the announcement for Forbes. Isaac’s blog post describes Zuckerberg as follows:
“Whenever I get the chance to talk to high schoolers, I always ask them what they’re using” to communicate with one another. But it was the type of messaging they weren’t using that caught Zuckerberg’s attention.
“‘We don’t really use email. It’s too slow,’ they told me.” Zuckerberg found the statement “completely boggling.”
But most of us aren’t in high school and Zuckerberg’s attempt at high school relevance does nothing to help me see how this innovation can be germane to the business world. As another form of email it is at best redundant and some of its deletions or “improvements” over email, such as not having a standard subject line, make me wonder how applicable it will be in a broader context. I know there are several levels of sort within the messages folder but I worry that something might be incorrectly sorted like an order or an order cancellation. Then how do you find it?
If I take my curmudgeon hat off for a moment, it’s just possible that this innovation in social media is simply a new solution looking for a problem to solve. That happens all the time. The early adopters, in this case kids, take it on and in a year or two you have something that hundreds of millions of people can make use of. Facebook and Zuckerberg have proven adept at this so it’s likely prudent to reserve judgment.
