Gains Cloud Rivals

For a decade now, Marc Benioff had to deal with the comments that his company had been fired with. Recently, however, Salesforce received a sincere flattery from its rivals when most of these companies started to acquire more firms to set up their own cloud platform, which is a pioneer strategy from Salesforce.

One example is IBM’s announcement that it would acquire for $440 million the firm DemandTec, a cloud vendor that sells data analysis software. Another is SAP’s acquisition of SuccessFactors, a developer of Human Resource software for $3.4 billion. And still another is Oracle’s move to buy RightNow Technologies for $1.5 billion; RightNow is a cloud product for customer service and research.

Benioff said, “It’s great that Oracle and SAP are buying cloud companies. Amazon Web Services is making over $1 billion in revenues with cloud software. Google Apps is close to that. We’re on track for revenues of $3 billion in 2012. That is $5 billion, and that is what has them worried. Where are SAP, Microsoft, Oracle? Why haven’t they taken our customers?”

Benioff is so pleased that other companies are following the strategy he created. Cloud is definitely here to stay and to change a lot of things with business, profit and technology. In fact, the global spending on enterprise technology has been forecasted at $2.7 trillion in 2012. Major revenues come from cloud product and services sales like servers that are run from SAP and product licensing software.

Cloud software continues to change the way personal and business computing is done by offering lower costs for services and real-time accessibility. Cloud applications run conveniently on smartphones and tablet PCs that has increased sales from these products tremendously.

SAP President for Global Solutions, Sanjay J. Poonen said, “There is a lot of good marketing Benioff has done. Now that he has energized it, you’ll find bigger companies coming in.”

SAP that made huge $16.7 billion sales in 2010 plans to haggle its way into the cloud business, and one of the major strategies they made was the acquisition of SuccessFactors. SAP plans to offer cloud-based services for travel, accounting expense management and collaboration products.

Oracle and Salesforce continues to battle for the cloud in words. Oracle’s chief executive and a previous mentor to Benioff, Lawrence J. Ellison said Salesforce is like a “roach model.” Ellison recently kicked out Benioff from the initial plan to have him deliver a keynote speech at a user conference in October.

Ellison said, “Everyone’s got a cloud, we need a cloud. Ours is a little different, it supports full interoperability.”

John Wookey a former SAP and Oracle staff and is now on Salesforce said, “Ninety-nine percent of their business is still traditional. The economics are different, but what is really different is the relationship with the consumer. We issue a new version of the product every four months. If the customer doesn’t like it, he stops paying.”

Benioff plans to move ahead of the competition in spite the presence of more rivals. Salesforce will continue to build more business-friendly software in the likes of Facebook. Salesforce product, Chatter was introduced in 2010, and hopes to do more internal communications and collaboration services for the workplace. Currently, Toyota is using Chatter to make communications between employees, employees to customers and vice versa as seamless and efficient.

Rival VMWare recently bought Socialcast to boost their social software, IBM has also upgraded their Twitter-like social feeds, and SAP will also build their social media through SiuccessFactors.

Not a bit worried, Benioff said, “I have a $10 billion vision for Salesforce. It consists of customer success.”

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