Sidebar: Benioff Sees Hosted Apps as 'the Future of Software'

Computerworld - It could be easily argued that Marc Benioff, Salesforce.com's chairman and CEO, has done more to promote the idea of hosted CRM and make it seem credible than anyone else in the software industry has. Benioff, a former Oracle Corp. executive, founded Salesforce.com in 1999. Now the company claims that its hosted applications are used by about 12,500 customers with a total of 195,000 end-user subscribers. Benioff recently spoke with Computerworld about the hosted CRM market.
How have things gone since you went public in June? I think our business is very strong. We're starting to see large companies come to us for mega-implementations, such as SunGard Data Systems, SunTrust Bank, ADP and Cisco Systems. We're seeing a model where we're doing something unusual and not done in other enterprise software companies - it's a true democracy. Very small companies, medium companies and even large mega-implementations are all done on the same piece of code.
Did Siebel's entry into the hosted CRM market validate Salesforce.com offerings? If you go back and look at the history of all the things Tom Siebel said about us, it was that we won't be around in a year, this will never work, and big companies will not be interested in this. It's all on the record. Now it is the future of software [for Siebel as well as for us], and that's interesting.

Do you think the number of vendors in the hosted CRM market will eventually shrink? Like in all markets in software, there's going to be a leader. Typically, the industry tends to aggregate around a leader -- [Microsoft] in office productivity and operating systems, and it's true in databases with Oracle. The [hosted CRM] market is still young, and Salesforce.com is a young company, only in business five years. I'm still seeing the market take shape and form, and how it will turn out is up to the customers.

What about integration of your applications with back-office systems? Is that getting any easier? It's an irony of the market that people think it's hard to integrate with our service. We have a lot of customers with SAP or PeopleSoft or Oracle. They run Oracle applications like the [E-Business Suite] 11i payables and receivables, and it's integrated with Salesforce.

In a sense, doesn't hosted CRM put internal IT staffers at your customers out of a job? I've never found that to be true. I've never had anyone contact me and say, "You cost me my job." It's more likely a truestatement when someone says they bought XYZ [software] and never got it up and running, and it's more likely that cost them their job.