Salesforce.com’s Benioff Says We’re on Verge of ‘Cloud 2’ Era

SAN FRANCISCO — GigaOm founder Om Malik’s third annual Structure conference here at the University of California, San Francisco’s new eastside campus June 23 and 24 brought out the heavy hitters in the cloud computing business, and they certainly delivered cogent insights for attendees to think about.
For example, Marc Benioff, CEO of super cloud service provider Salesforce.com, put forth the idea that a Cloud 2 era is about to dawn — never mind that Cloud 1 is still in the process of discovery by a fair number of old-school enterprise IT folks.
“The idea of Cloud 2 is what I would call a combination of cloud computing, social networking, and mobile applications,” Benioff said. “I used to think, back when I started Salesforce, that why isn’t all enterprise software like Amazon? Now I’m thinking: Why isn’t all enterprise software like Facebook?”
Facebook, with its more than 450 million regular users, is the most complex popular application ever, Benioff said. “It’s got a half-billion users going to more than 1 billion users. How can we bring that kind of capability into the enterprise?” he asked.
“There’s a shift going on from Amazon to Facebook: Where I was having to pull information from the Internet, now it’s being pushed at me,” Benioff said. “[We use] computers that we are touching, not clicking. We’re adopting this new technology really fast; you’re walking around with your iPad, but it’s subtle what kind of a change this is.”
The big existing players — IT companies such as Microsoft and IBM, Benioff said — are getting “dropped away, they’re just gone, in terms of new purchase decisions, new technology decisions, and great new technologies getting dropped straight into the mainstream of the market. That’s what’s really exciting to me right now.”
Salesforce.com is exceeding a $1.5 billion-per-year run rate, Benioff said, and is now at the 77,300-customer level. “That was the first shift — us [Salesforce] moving our customers from the client-server model of the old Siebel/Oracle/SAP stuff into the cloud,” Benioff said.
‘A door has opened and we’re all walking through it’
Cloud 2 is another shift that’s happening, Benioff said. “That’s where a door has opened that we’re all walking through that’s going to create more value and more capability,” he said.
Benioff cited Morgan Stanley analyst Mary Meeker’s recent report on the mobile Internet asserting that “Apple’s iPhone, iPad and iTunes ecosystem might well become the fastest-ramping and most disruptive IT product-service launch the world has ever seen.”
“These ideas that we’re moving into a new mobile, social world — this is going to create more value and more capability for the industry than the last shift, which I kind of characterized as Cloud 1,” Benioff said.
Fundamentally, Cloud 2 is an enterprise IT system that takes into account on-demand cloud computing services, making sure they are all adapted for use by mobile devices, and that they are interwoven with, and working hand-in-hand, with social networking services like Facebook, LinkedIn, and Twitter for immediate communication purposes.
If companies don’t recognize and embrace this soon, they will be left behind, because that’s where the future of business is going, Benioff said.
This coming shift means that Salesforce also will have to do some updating, Benioff said. Salesforce.com on June 23 released its new Chatter collaboration tool on June 23 as part of this upgrade.
“We have to transform. We’re working hard at that. We’ve been working on rewriting our core apps, a new version of our sales app was actually released on Friday (June 18); a new version of our customer service call center and contact center; a customer portal app that we also released on Friday; and a new version of our platform that will utilize Java,” he said.
Benioff cited Apple CEO Steve Jobs, “who has not only rolled out the iPad and now the iPhone 4 — you have to take that leadership imperative that he has, drop the gauntlet on it, and say: ‘Everybody needs to move forward again.'”