Salesforce.com and the cloud

analysis
Nov 5, 20082 mins

What can open source companies learn from Mark Benioff? Plenty.

This week at Salesforce.com’s annual DreamForce conference, CEO Marc Benioff was touting their latest cloud computing announcements, enabling customers to run a broader range of applications on Salesforce’s platform known as Force.com. For those who missed it, Benioff will also be at O’Reilly’s Web 2.0 Summit on Thursday.

It was interesting to see just how big the Salesforce.com eco-system has grown in recent years. It has more than 1 million users and is generating around $1 billion in revenue –not bad for a subscription business! Not only were there nearly 10,000 attendees at the conference, there were close to 100 third-party solutions, add-ons, and partner offerings ranging from InsideSales.com sales call productivity software to Zuora, a subscription billing system. They also had the Foo Fighters play at their Monday evening party. Not quite Lenny Kravitz, but still pretty good.

[ Delve deeper into cloud computing in InfoWorld’s special report ]

While Salesforce isn’t open source (like SugarCRM) it has disrupted the traditional expensive “on premise” solutions of Siebel, Oracle, and others. Why? Because it works. For a few hundred bucks, a customer can get started with Salesforce, get results, and fly under the radar of IT. Ever the marketer, Benioff did well by not trying to compete with Siebel and Oracle on their terms. He changed the game by focusing on ease of adoption with a SaaS offering and built a passionate community of users and consultants. Maybe not as passionate as OSCON attendees, but pretty good for business application software.

In many ways, Salesforce’s adoption is a lot like open source: Focus on one specific area of the market. Disrupt the incumbent using both price and technology. Get large-scale adoption and leave opportunities for partners. Many of these same techniques apply when you’re building an open source company.