Having eclipsed SAP as the world’s largest provider of enterprise applications, Salesforce is now looking to position all of its competitors as tactical also-rans by claiming Salesforce is the only apps vendor capable of offering an integrated suite of systems of record, of engagement, of intelligence, and of real time.
Now, since chest-thumping in the tech industry is not exactly an unheard-of thing, and since co-CEOs Marc Benioff and Bret Taylor were making this pitch at their big Dreamforce event, and since they were speaking in the Investors Day forum, we shouldn’t be surprised that they laid on the grandiosity in an extra-thick layer.
But Benioff and Taylor also fused those comments about Salesforce’s unmatched capabilities with big talk about the new wave of vendor consolidation sweeping the market and the inevitability of the strong getting stronger.
So, let’s see: Benioff and Taylor tell investors that new innovations from Salesforce allow it to do what no other software company can do, and then they say customers want to cut way back on the number of software vendors…. Hmm, what’s the picture they want investors to see?
I’ll share the exact comments from Benioff and Taylor in a moment, but haven’t we seen this picture before? Big apps company gets bigger, pledges that it can deliver all the vital end-to-end solutions any business could possibly need, and declares all other software vendors to be inferior or irrelevant. But then reality asserts itself — as it always does — and the vibrancy and buoyance and growth and innovation of the entire software sector blast through that flimsy rhetoric and demonstrate, once again, that nobody — nobody! —gets to own first place. Instead of a deed, first place comes with a temporary lease that can be revoked at any time.
Just ask SAP, which was the world’s #1 apps player for 30-40 years and held an insurmountable lead over all of its competitors until…well, until it didn’t, and it was usurped by Salesforce.
Part of Benioff’s argument about becoming untouchable has to do with his claim that Salesforce is now a “system of record.” But wait a dang minute — how many times in the past has Benioff assailed “systems of record” as being stuffy, stodgy, stingy, and stinky? How many times has he dismissed “systems of record” competitors, such as SAP and Oracle?
But now, because being a “system of record” suits the new narrative cooked up by newly minted apps kingpin Benioff, “systems of record” are now suddenly cool and sleek and hip and happenin’?
Call me thick-headed, but I say Benioff can’t have it both ways. Again, I know he was doing the razzle-dazzle for investors, but I think Benioff — the software industry’s newly crowned big kahuna — can and should do better than that. But don’t take my word for it — here are Benioff and Taylor in their own words from their presentation at the Investors Day session during last week’s Dreamforce.
Bret Taylor: “And it’s so important because right now there’s a lot of consolidation of technology investments, right, as companies are trying to focus on the bottom line and controlling their costs. And being a strategic vendor and having those C-level conversations — I mean, our acquisitions have been incredible to drive some of those conversations.”
Marc Benioff: “This is our strategy: our strategy is to build a platform that’s deeply integrated, that will be compliant, able to run in different countries, and have high levels of security and privacy and so forth. But when we look at this platform — and this is an integrated platform, and not just a bunch of independent products — and, this is where customers really become sticky with us. And this is where customers end up here [at Dreamforce].
“Genie is kind of the next level of the platform, which is cool. We didn’t really have, two months ago when we started this journey — we had brought all of our top 500 executives together in a meeting that we have every year called Lalima and we were there and we presented and we thought we’re so great and we’re hot shit and we’ve gonna show them this thing blah-blah-blah-blah-blah, and they’re like, ‘we don’t get it.’ We knew how great it was intuitively, and from a technical perspective, but we weren’t able to communicate it, which is a huge challenge with a technology like Genie.”
Quick interjection: with great respect, Marc, with regard to Genie, you may still have a failure to communicate effectively. Back to Benioff’s commentary:
“So, it was really a breakthrough that we had on our tour: the rabbit, the name, the ability to kind of redact it and make it a little bit more fun. And this is really connecting with customers and I’m very pleased with how it’s showing up here.
“It’s also a huge accelerator for us because this is a separate product and this is something that a lot of customers have wanted the ability to have a receptacle for real-time information. For a long time, you have a system of record, Salesforce, and of course, we all understand that. We have a system of engagement like Slack — anybody here use Slack? Okay, quite a few.
“And we also have a system of intelligence Tableau, and we’re kind of we’re where we want a single source of truth from the customer information. Yeah, like, if you walk into some of our customers, even if you go down the street here, Brunello Cuccinelli, and you see the iPad, you’ll see they have a single source of truth for all our customers because they use the entire platform. Their CTO Francesco is here at the show. This idea that we have a single source of truth that it’s a system of engagement, the system of record, the system of intelligence, but then there’s one more thing which we’ve never really had before, which is a system of real-time. How do you plug these real-time streams in from Google from Meta, from that from this company from that company, whatever.”
Skipping ahead a bit, Benioff picks up on the “real-time” idea.
“So, you want to have real-time feeds. You want to have real-time information directly on the customer record. It’s never really happened before. Now in a low-code, no-code environment. The customer doesn’t have to build all this — boom! — all of a sudden, all of the real-time information that was separate is now here.”
I don’t doubt that Salesforce is up to something pretty powerful with Genie. But I think Benioff ought to take another look at that reaction from his top 500 managers at the meeting a couple of months ago: “We don’t get it.” That’s an incredibly important piece of feedback!
I don’t mean to sound like an old fogey, but the inclusion of a funny bunny rabbit doesn’t make that dissonance disappear. If Salesforce’s top 500 executives — by Benioff’s own admission — “don’t get it,” how the hell are customers supposed to get it?
I love grand ambition and big dreams and the courage it takes to put those out there. For the past 23 years, few people in the world have done that as brilliantly as Marc Benioff has, and as I’ve said before, he will be remembered as an extraordinary leader, disruptor, and business strategist.
But there’s a big difference — a huge difference — between being the feisty newcomer who’s shaking things up and annoying the crap out of the leader, and then being the top dog. At the pinnacle, it’s not about sniping at #1 and then coming up with some other way to draw attention to yourself.
It’s about leading. It’s about crystal-clear and compelling vision.
And I think that Genie needs to go back in the bottle for some fine-tuning because this is a case where Marc Benioff’s vision has outstripped the market’s ability to get it.