A head in the cloud: Exclusive interview with Marc Benioff

On the eve on its CloudForce conference, Salesforce.com CEO Marc Benioff talks exclusively to Stuart Lauchlan about the future of cloud computing, why he's shunned the Open Cloud Manifesto and why Oracle's approach to cloud computing is causing some amusement.

By Stuart Lauchlan, news and analysis editor

This time last year, Salesforce.com held its first Dreamforce Europe conference at the (frankly rather overcrowded) Barbican Centre in London. This year, it was planned that the conference would be a multi-day affair, housed in the massive ExCel conference centre in Docklands. But that was before the global economy went into meltdown and everyone started to count the pounds and Euros that bit more closely.

So it is that today a smaller scale event kicks off – the CloudForce conference; still housed at ExCel but now limited to a one day main event. But there's still a lot to be crammed in and no lowered expectations about the level of interest in the conference. "We're expecting about 3,000 people," says Salesforce.com CEO Marc Benioff in an exclusive eve-of-conference chat with MyCustomer.com's sister site, BusinessCloud9.com.

"This has replaced Dreamforce Europe because we feel that customers are being more cautious about their spending and about the amount of time they are ready to be away from the office. We're trying to be respectful about that and about what customers need. We'll go on and do other CloudForce events around Europe, so instead of everyone having to fly into London on Tuesday, we'll be able to go to them. We can bring the event to France and Germany and so on."

"CIOs have been assuming that their budgets will continue to expend through periods of global growth, but when the global economy contracts then there is no elasticity."

Marc Benioff, CEO, Salesforce.com

Those 3,000 expected attendees will contain a higher number of CIOs and senior IT decision makers – reflected in a parallel executive summit running alongside the main event – as cloud computing increasingly encroaches on the mainstream IT agenda. "CIOs are going through a very difficult period right now," notes Benioff. "They are going through a significant compression. Basically, they're faced with the old enterprise software companies charging them up to 22% in maintenance fees. In many cases, that's being charged on licences that they bought many years ago for products that have never been upgraded.

"CIOs have been assuming that their budgets will continue to expend through periods of global growth, but when the global economy contracts then there is no elasticity. They can't easily collapse their investment against the recession. You end up with this innovation gap that means that CIOs are having to do more with less. That innovation gap is caused by the legacy of client service maintenance."

Benioff likens this to buying an entire office building and only using half of the offices. "Those maintenance agreements have stacked up over the years," he says. "As IT budgets fall in the global recession, there isn't as much left over for innovation. We can offer those CIOs ready relief by accelerating innovation through cloud computing and lower costs and ease of use. We can relieve the fixed costs."

Benioff believes that the cloud computing message is getting through to CIOs at all levels. "We offer an alternative to traditional IT architectures. CIOs more than ever before understand what that means and are going for that," he enthuses. "We are more than a decade into the software as a service (SaaS) revolution. CIOs are now looking for platform as a service. The nature of the technology adoption curve means that it is happening incrementally. You just need to look at our revenue growth to realise how far we've all come."

Storm clouds gathering

One subject that doesn't attract much enthusiasm is the recent attempt by IBM and assorted vendors to promote an Open Cloud Manifesto. Salesforce.com – in common with cloud champions Google and Amazon – chose not to sign up and it's clear that there's little prospect of a change of heart in that direction. "I think they've had their 15 minutes of fame," says Benioff with a smile. "It's pretty much over. What we need is for vendors to provide strong APIs that are proven and meta data APIs, so that you can read and write the definition of applications and the field names.

"If you have that and are standards-based, then you are in really good shape for interoperability. None of those things are talked about in this Open Cloud Manifesto. Web services are the most important thing. Our API is deeply integrated with the APIs for Amazon – how much more integration do you want?"

Benioff also points out that SAP has signed up to the Open Cloud Manifesto and his wry smile perhaps suggests that this in itself might be enough reason not to join! Proclaimed bafflement over the progress (or rather the lack of the same) of SAP's BusinessByDesign seems to remain the official Salesforce.com party line. As for Benioff's old alma mater Oracle, there's continued amusement at CEO Larry Ellison's seeming inability even to say the word 'cloud'.

"Larry is my mentor - he's really smart - but Oracle just doesn't understand cloud computing," says Benioff. "One day they want to be the cloud leader, the next they don't want to have it at all. One day cloud computing is ridiculous, the next day they're saying that they're the dominant player. They're just having a hard time in articulating the vision for the company in general. They don't know where cloud computing goes in their world."

But Benioff adds with evident amusement and satisfaction that Salesforce.com has won a fixed place on Oracle's competitive radar. "In every analyst conference call, they have to mention how many wins they have against us," he chuckles. "The only companies they always mention are SAP, Microsoft and us. The only companies we always talk about are SAP, Microsoft and Oracle. So that suits us just fine."

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