By Michael Hickins  |  Posted 2008-02-06 Print this article Print

We understand you can't reveal individual revenue numbers, but what can you tell us in the aggregate about how much value your partners derive from being on AppExchange?

We have seen that partners have tracked us at about 10 to 20 percent of our revenue. So, we really think as we move into this $1 billion-a-year revenue next year ... we think that 10 to 20 percent of that will be partner revenue. It's possible that [the number] could be larger than that, but I think that's a solid, conservative number.

Traditional software vendors such as SAP and Oracle are beginning to push SAAS, as well. Microsoft is about to release Microsoft CRM 4.0 as a hosted, multi??ítenant application, and it has 400,000 feet on the ground. How will you fend off that competition?

What we need is more competition, more companies; what we need is the mainstream providers coming in and saying, "Hey, we're a multibillion dollar company, and we think the future is software as a service. And it's the end of software. And Marc Benioff, what does he know anyway?" ...

It's not very interesting if you're the only company in an industry because you're not an industry, you're the only company in it. It's better to be part of an industry and be part of a huge effort than to be one person on an island. So that's why we are now part of the mainstream. ... Now Microsoft is saying, "We're software as a service;" and SAP, "We're software as a service;" Oracle, "We're software as a service." And these 2,000 startups, they're software as a service, and we're like, "Well, I guess it's the end of software."

What you don't have that some of your competitors do have is CRM integrated with ERP [enterprise resource planning], and your customers seem to want that integration. Doesn't that pose a competitive threat to you?

We can't do it all, and we don't think in this new industry that you should do it all. This is a new industry, a new generation of technology. We're not going to build mapping technology; we're going to use Google maps. We're not going to build VOIP [voice over IP] technology, either; we're going to use Skype. And in terms of other capabilities, we define what we do really well and then we can bring in these other providers through Web services.

This is not the old monolithic days, where you're trapped in a stack of code that runs on your PC that's under your desk and that everything that's in your company is in that PC. This is a new day, where you're operating in the cloud, and the cloud has all of these resources and technologies, and you can easily integrate these systems. And that's the power of Web services. And the power of Web services is simple, easy integration, and our customers have proved it.

We do 1.6 billion integration calls every single month. That is the evidence of this statement that Web services is real-that we've done 24 billion calls in our history. Those 1.6 billion calls are calling Oracle at Cisco Systems, and they're calling SAP at DuPont. But for us to say that we're going to build ERP so that Cisco can replace Oracle and so that DuPont can replace SAP would be crazy. Instead, we can focus on what we're really good at and then use the power of Web services and integration to make those calls. ...


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