Mr. Benioff, Tear Down That Wall

Marc Benioff, CEO of Salesforce.com, talks about how Salesforce is all for sweetness and love and openness and all the good things. As VentureBeat reports:

Comparing Microsoft and Salesforce, Benioff said: “They hate everybody and we love everybody, and that’s pretty much the difference. We even love Microsoft. … This is our core strategy, love.”

Now, where do I begin? As I have recounted elsewhere, our dalliance with Salesforce began with their invitation to us to take part in their AppExchange (now renamed Force.com) ecosystem. They said they knew we had a CRM offering of our own, but still felt our online office suite would be a good addition to their ecosystem. We assigned an engineering team to do the integration, had a bunch of meetings and calls with their technical team, and with their full support, we completed the integration work. It was literally days from launch when we got the call: the VP in charge of AppExchange told us the project was on hold and  Benioff would be calling me.

That’s when I got the full measure of the man: Benioff told me he could not permit us to play on the AppExchange as things stood, but he would be happy to acquire us. We had several rounds of meetings on this,  finally I told him I really don’t see any cultural compatibility between the companies. He changed tack and repeatedly tried to get us to discontinue Zoho CRM, in return we would get to play on AppExchange. I was furious because both Benioff and his team clearly knew we had a CRM offering going into this engagement, and if they had set this as a pre-condition for us to integrate into AppExchange, we would never have put in the resources we did.

Since then, Salesforce has repeatedly tried to block customers from migrating to Zoho CRM, by telling them (falsely) that they cannot take their data out of Salesforce until their contract duration is over. We have emails from customers recounting this.

Now, realize that we face a far, far bigger competitor in Google, and yet we have nothing but praise for the way they have worked with us. In the grand scheme of things, we are not going to be killed by Salesforce, that’s for sure. I have no personal animosity – even today, we would integrate Zoho into Force.com if they would let us, because that would benefit our customers and theirs – but when I read an interview where he blatantly spins a story starkly in condradiction to reality I have personal knowledge of, I have to call him on it.

35 Replies to “Mr. Benioff, Tear Down That Wall”

  1. Sridhar – I sell integration for an even larger company than sf & I’ve integrated appexchange a few times – so I think I know what your guys did.Question – If Marc Benioff wont tear down that wall, why wouldn’t you build the nicest ladder going across it. A bunch of smart professional services guys can put together a repeatable solution – no one can stop your customers & or you to give them credit for the remainder of their term with sf… Its a free market economy …

  2. Sridhar – I sell integration for an even larger company than sf & I’ve integrated appexchange a few times – so I think I know what your guys did.Question – If Marc Benioff wont tear down that wall, why wouldn’t you build the nicest ladder going across it. A bunch of smart professional services guys can put together a repeatable solution – no one can stop your customers & or you to give them credit for the remainder of their term with sf… Its a free market economy …

  3. Clearly Zoho and SFA are abject competitors. Whether Benioff personally was involved with the integration initiative or not, Zoho ought to have realised that the proposal was commercial; when two competitors want to integrate it must mean merger/acquisition. There are hundreds of such stories in the history of the industry.Kudos on not getting sold. Zoho, Google and SFA offer three different takes on software for businesses; the latter two have some things in common, and it isn’t quite correct to say Zoho competes with Google -you are competing with Open source.

  4. Clearly Zoho and SFA are abject competitors. Whether Benioff personally was involved with the integration initiative or not, Zoho ought to have realised that the proposal was commercial; when two competitors want to integrate it must mean merger/acquisition. There are hundreds of such stories in the history of the industry.Kudos on not getting sold. Zoho, Google and SFA offer three different takes on software for businesses; the latter two have some things in common, and it isn’t quite correct to say Zoho competes with Google -you are competing with Open source.

  5. Here’s what I learned at Dreamforce this year:
    1) I can pay salesforce.com $25 per user if I build on Force.com. It costs me 25 cents oer user on Amazon EC2.
    2) The two Force.com showcases are Coda and Fujitsu Glovia. Two foreign companies. Both ERP. No web-driven innovation. Both are old companies. So in 3 years of playing there are no startups building on Force.com that salesforce can point to as successful.
    3) The SaaS companies Marc has personally invested in (ie, zuora) don’t seem to be building on Force.com in any meaningful way.
    4) I can host my “Web Application” on “Sites” and pay $1000 per month for 1m page views. But I don’t get authenticatation for my Salesforce integrated offering. Huh? So what are the benefits?
    5) According to Marc, if I build on Force.com, somehow I can get “bursts of processing power from EC2 for a very short period of time”. A very short period of time? I guess that means he views EC2 as a competitor.
    6) In his Monday keynote, Marc said we’ve moved away from a world of mashups and web service integrations to a world of platforms. Huh? And if I build on your platform it costs me 100x, cuts me out of 80% of the market opportunity, and only gets me help from the salesforce.com sales team after I’ve closed a bunch of deals on my own? Huh? I think Marc has been drinking too much tea with Alice.
    7) If you’re a partner and hire anyone away from salesforce.com you’ll be put in the penalty box, meaning you can’t attend their events until you’ve done penance.
    8) You can get some sales help from salesforce.com only if you are a select or premium partner. You must have proven success in order to be in either category. That means you get zero help if you’re just starting out.
    9) The more successful SaaS partners of salesforce.com were getting 80% of their leads through the salesforce.com ecosystem last year. This year it has drifted toward 50%. This shift is to the Oracle ecosystem. The Oracle On Demand team is bringing bigger deals and doing joint selling.Here’s what I learned at Oracle Open World this year:
    1) Oracle owns the sales channel to the enterprise, and they’ve discovered that they can acquire innovative technology cheaply and their sales channel takes it from there. One example: Sigma Dynamics. Oracle acquired them in the single digit millions of dollars, yet just one customer deal brought in over $80m.
    2) Signs of increased focus on CRM On Demand. They announced a new partner program for Oracle CRM On Demand, held a joint event, and were doing joint demos in the Oracle section of the trade show floor. Oracle picked the top SaaS companies in the salesforce.com ecosystem. Then they started bringing them into deals. Everything Marc has done wrong with its big ISV partners the Oracle CRM On Demand team is doing right, as least for now.
    3) Their new partner program has resulted in an immediate uptick in deals and win rates for the Oracle sales team. Oracle is getting access to and winning many more deals against salesforce.com, RightNow, and SAP as a result of their new partnerships.
    4) In the current environment, Oracle could probably buy all of their CRM On Demand partners for less than $500m. Their sales channel could drive more than in first year incremental revenue alone. And all of those big Dreamforce booths would suddenly be empty.
    5) Get ready for a big gulp.

  6. Here’s what I learned at Dreamforce this year:
    1) I can pay salesforce.com $25 per user if I build on Force.com. It costs me 25 cents oer user on Amazon EC2.
    2) The two Force.com showcases are Coda and Fujitsu Glovia. Two foreign companies. Both ERP. No web-driven innovation. Both are old companies. So in 3 years of playing there are no startups building on Force.com that salesforce can point to as successful.
    3) The SaaS companies Marc has personally invested in (ie, zuora) don’t seem to be building on Force.com in any meaningful way.
    4) I can host my “Web Application” on “Sites” and pay $1000 per month for 1m page views. But I don’t get authenticatation for my Salesforce integrated offering. Huh? So what are the benefits?
    5) According to Marc, if I build on Force.com, somehow I can get “bursts of processing power from EC2 for a very short period of time”. A very short period of time? I guess that means he views EC2 as a competitor.
    6) In his Monday keynote, Marc said we’ve moved away from a world of mashups and web service integrations to a world of platforms. Huh? And if I build on your platform it costs me 100x, cuts me out of 80% of the market opportunity, and only gets me help from the salesforce.com sales team after I’ve closed a bunch of deals on my own? Huh? I think Marc has been drinking too much tea with Alice.
    7) If you’re a partner and hire anyone away from salesforce.com you’ll be put in the penalty box, meaning you can’t attend their events until you’ve done penance.
    8) You can get some sales help from salesforce.com only if you are a select or premium partner. You must have proven success in order to be in either category. That means you get zero help if you’re just starting out.
    9) The more successful SaaS partners of salesforce.com were getting 80% of their leads through the salesforce.com ecosystem last year. This year it has drifted toward 50%. This shift is to the Oracle ecosystem. The Oracle On Demand team is bringing bigger deals and doing joint selling.Here’s what I learned at Oracle Open World this year:
    1) Oracle owns the sales channel to the enterprise, and they’ve discovered that they can acquire innovative technology cheaply and their sales channel takes it from there. One example: Sigma Dynamics. Oracle acquired them in the single digit millions of dollars, yet just one customer deal brought in over $80m.
    2) Signs of increased focus on CRM On Demand. They announced a new partner program for Oracle CRM On Demand, held a joint event, and were doing joint demos in the Oracle section of the trade show floor. Oracle picked the top SaaS companies in the salesforce.com ecosystem. Then they started bringing them into deals. Everything Marc has done wrong with its big ISV partners the Oracle CRM On Demand team is doing right, as least for now.
    3) Their new partner program has resulted in an immediate uptick in deals and win rates for the Oracle sales team. Oracle is getting access to and winning many more deals against salesforce.com, RightNow, and SAP as a result of their new partnerships.
    4) In the current environment, Oracle could probably buy all of their CRM On Demand partners for less than $500m. Their sales channel could drive more than in first year incremental revenue alone. And all of those big Dreamforce booths would suddenly be empty.
    5) Get ready for a big gulp.

  7. Thats really unfortunate. I mean, I can see the reasoning behind not wanting another CRM player to integrate, but when they claim their strategy is “love to everyone” that seems a bit counter-intuitive.

  8. Thats really unfortunate. I mean, I can see the reasoning behind not wanting another CRM player to integrate, but when they claim their strategy is “love to everyone” that seems a bit counter-intuitive.

  9. InsideView and SuccessFactors, Jenzabar and JFK School, ABI Mobile Study, Sybase Release, …The news as of the first coffee this morning, and the music is ex-Jefferson Airplane guitarist Jorma Kaukonen’s Quah, an overlooked gem from the mid-70s and a welcome acoustic folk-bluesy counterpoint to the crashing glam rock and twee prog-rock fripp…

  10. InsideView and SuccessFactors, Jenzabar and JFK School, ABI Mobile Study, Sybase Release, …The news as of the first coffee this morning, and the music is ex-Jefferson Airplane guitarist Jorma Kaukonen’s Quah, an overlooked gem from the mid-70s and a welcome acoustic folk-bluesy counterpoint to the crashing glam rock and twee prog-rock fripp…

  11. Perhaps the first time I have ever seen the words love and Salesforce in the same sentence. Does seem like classic Benioff though.

  12. Perhaps the first time I have ever seen the words love and Salesforce in the same sentence. Does seem like classic Benioff though.

  13. It would be a dangerous move for salesforce to allow you to integrate. Their bread and butter SFA customers would jump ship in an instant especially now that companies are all in cost-cutting mode. It is unfortunate that Salesforce handled the situation with little ethics or courtesy.I wish I was a salesperson selling Zoho CRM i could pick off salesforce.com customers like shooting fish in a barrel.

  14. It would be a dangerous move for salesforce to allow you to integrate. Their bread and butter SFA customers would jump ship in an instant especially now that companies are all in cost-cutting mode. It is unfortunate that Salesforce handled the situation with little ethics or courtesy.I wish I was a salesperson selling Zoho CRM i could pick off salesforce.com customers like shooting fish in a barrel.

  15. Well said… and kudos for taking the initiative and willingness to share a private dealing that customers of both Zoho and Salesforce would benefit from hearing.

  16. Well said… and kudos for taking the initiative and willingness to share a private dealing that customers of both Zoho and Salesforce would benefit from hearing.

  17. Dreamforce… While Microsoft and Amazon have been dominating the headlines of late when it comes to new cloud computing services, Salesforce.com is touting its existing accomplishments at this year&#39s Dreamforce user and developer conference. With a series of k…

  18. Dreamforce… While Microsoft and Amazon have been dominating the headlines of late when it comes to new cloud computing services, Salesforce.com is touting its existing accomplishments at this year&#39s Dreamforce user and developer conference. With a series of k…

  19. […] Benioff’s message certainly raised hackles with Sridhar Vembu, Zoho’s CEO. In a blog post today, Vembu recounts how Benioff tried to strong arm Zoho into giving up on its CRM development: Benioff told me he could not permit us to play on the […]

  20. […] Benioff’s message certainly raised hackles with Sridhar Vembu, Zoho’s CEO. In a blog post today, Vembu recounts how Benioff tried to strong arm Zoho into giving up on its CRM development: Benioff told me he could not permit us to play on the […]

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