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Salesforce CEO Bullish about Year Ahead, Scornful of Competition

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Posted May 18, 2012 By Sean Kerner     Feedback

Buoyed by rising revenue, Salesforce CEO Marc Benioff increases guidance for the year and blasts SAP for lack of innovation.

Salesforce (NYSE:CRM) reported first quarter fiscal 2013 financial results late Thursday that paint a rosy picture for the company. Revenue was reported at $695 million, for a 38 percent year-over-year gain.

Looking forward, the strong quarterly results led Salesforce to raise its full year guidance for the year ahead. “After becoming the first enterprise software company to achieve the $1 billion run rate and the $2 billion run rate, now we're guiding to $3 billion for the year, fiscal year 2013," Salesforce CEO Marc Benioff said during the company's earnings call. "That's an amazing new milestone for our industry."

Salesforce’s Social Strength

Benioff attributed his company's success to the combination of its social enterprise vision and the clear leadership in each of its core markets. As an example, he cited the largest transaction in Salesforce's history, which was closed at the start of the quarter with an insurance company.

"They are building a customer social network to connect hundreds of thousands of employees with millions of customers, prospects and even Facebook fans," Benioff said. "Their vision is to empower their entire customer-facing team, including their sales forces, their customer service organizations, their marketing organizations, their claims agents with a single view of customers across any of their chains."

Benioff also highlighted the overall pace at which social enterprise applications are being built, noting the company now has nearly 2 million applications built on its Force.com and Heroku platforms. "Our ability to deeply integrate our social front office solutions with back office systems like SAP and Oracle, the core back office systems of our customers combined with our social front office systems, is helping many of our customers," he said.

Taking a Slap at SAP

During the earnings call, Benioff was asked about his views on the lifespan of the on-premise software model still used by Oracle, SAP and other large enterprise software vendors. Not surprisingly, Benioff is not impressed by Oracle’s or SAP's license growth and argued that the growth rate for Salesforce is now higher.

“If you're going to start a software company today, you're not going to start it as an on-premise company," Benioff said.

Going a step further, Benioff took aim at what he perceived to be the lack of innovation coming from SAP, which this week hosted the SAP Sapphire conference, where it debuts new product innovations. Again, Benioff was not impressed – and didn’t hesitate to say so.

"If the newest and most exciting thing at SAP is the acquisition of SuccessFactors, well, then God help SAP, because that just isn't that exciting," Benioff said.  "I mean, that was a sub-$1 billion company that makes a human performance management software that you log into once a year. So where's the action and the vision?"

That said, Benioff noted that in his view SAP is a great company with a great product line that customers use in their back office, even if SAP’s future-looking vision is lacking. When it comes to vision, Benioff noted that he recently watched a replay of Apple’s Steve Jobs rolling out the iPhone in 2007.

"It just inspired me that the world can change so fast, that so many exciting things are happening, and now you do have these great new prophets emerging, like Mark Zuckerberg and Jack Dorsey, and our job is just to listen and follow them, because I think the enterprise is going to get pulled into the future through these consumer services," Benioff said. "And that's what Salesforce.com is going to help our customers do."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network,  the network for technology professionals. Follow him on Twitter @TechJournalist

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