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Risk

1/25/2010
08:13 AM
Bob Evans
Bob Evans
Commentary
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Global CIO: Salesforce.com CEO Benioff On IT Scams And Cloud Power

In Part 2 of our Salesforce.com analysis, Benioff describes the power of the cloud and proves it with his company's incredibly lean IT infrastructure.

When Salesforce.com CEO Marc Benioff talks about "what a scam traditional enterprise software and hardware is," maybe he's only saying that because he's the leading proponent of cloud computing, which is traditional IT's worst nightmare.

Maybe, but maybe not.

In fact, Benioff felt justified in making that "scam" charge because he runs his entire company's infrastructure on 1,500 Dell PCs and 100% cloud software. That's a $1.3 billion global company with 70,000 customers, 15 billion database transactions per quarter, five 9's of reliability, and transaction times of less than 300 milliseconds.

On 1,500 PCs and nothing-but-cloud software.

Now I think we can all agree that "scam" is a bit harsh to describe the entire traditional enterprise IT landscape—I think even Marc Benioff himself would admit that. But in a separate comment, he was dead-center perfect in saying that a "sea change" is underway due to the rapid rise in not only cloud-based applications but also cloud-based platforms, a combination that is winning converts among CIOs who are gaining confidence in the cloud as they see more and more viable cloud options available to them.

And as we've discussed before—particularly in a column called Global CIO: Cloud Computing's Deadly Vulnerability—it's not just Salesforce.com and a few teenagers who are saying that cloud computing's time has come. In fact, it's exactly the opposite: the CEOs of Hewlett-Packard, Oracle, IBM and many mid-sized companies have also said that cloud computing offers enormous promise and have begun aligning their strategies, products, and services around the cloud.

In fact, we put "The Cloud Imperative" at the very top of our list of CIO priorities for the coming year in Global CIO: The Top 10 CIO Issues For 2010.

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But Benioff stands alone in his combination of passionate advocacy and proven cloud achievement—did I mention that Salesforce.com runs its entire global infrastructure on 1,500 PCs?—and his next wave of cloud leadership will take several shapes: the new Chatter social-media application for the enterprise; an expanded professional services organization that will help large enterprises with complex cloud/on-premise integrations; an increasing emphasis on the Force.com platform; helping large enterprises develop new cloud apps in areas such as global supply chains; and broadening the company's role as an "enabler" of the cloud-computing imperative.

And while Benioff stresses that there is an enormous amount of work still to be done before cloud computing begins to reach its potential, he's equally pointed in his efforts to prove it's an idea whose time has come.

"A year ago, liquidity was such a big issue, and so CIOs looked at alternatives like the cloud more aggressively than ever before," Benioff said in a recent interview at Salesforce.com's San Francisco headquarters. "But today, not only is the economic environment a little better but you've also got analysts and cloud-computing customers and investors who've all become very bullish on the concept."

That bullishness is shaking up the entire IT industry, Benioff says, with feisty new companies and technologies and approaches emerging while established companies try to find the right balance between their traditional models and the new cloud opportunities. I asked him about an opinion shared by IBM CEO Sam Palmisano and HP CEO Mark Hurd: that cloud computing has enormous promise, but is an "unfortunate" name (Palmisano) and simply a bad name (Hurd: Global CIO: Hewlett-Packard CEO Hurd's Strategy: The Infrastructure Company"I don't like it—no, I don't like it").

"A whole new generation of companies have emerged, and a whole new wave of innovation has emerged: companies that run apps in EC2, or another Facebook app that runs off the internet," Benioff said. "And in the midst of all this, we want to be the catalyst for change and innovation in the software industry.

"Our premise is this: instead of having to buy more software and more servers, you can just get going—and in much less time and at a much lower cost. And inevitably in times of such extreme change, some companies get left behind, and they have difficulty meeting their customer needs and embracing some of these bold new ideas, so they resort to naysaying and get caught in the status quo and they have a very hard time trying to get out of that. You have to understand that the pace of acceptance is different for every company," he said, and that their current uncertaint about the cloud "has a great deal to do with their tolerance for change."

As we wrote last week in Part 1 of this 2-part series about our Global CIO conversation with Benioff, he's got a soft spot for customer-side companies struggling with that pace of acceptance, even though it often means that while they philosophically grasp the cloud's power and potential, they are still not mentally ready to make the leap. From that Part 1 column:

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