From software area product to software as a service
In 1999, 35 year old Marc Benioff founded salesforce.com in his San Francisco apartment. Benioff wanted to make customer relationship management software more affordable and accessible to more companies.
His vision included a game-changing plan to use the internet as a platform to deliver business software as a service rather than as a product as it was currently sold.
Instead of paying exorbitant licensing fees and ongoing maintenance costs that the Siebels and SAPs charged, salesforce.com would host the CRM service on the internet and charge on a ‘pay as you go’ basis.
But in 2001 software as a service (SaaS) was seen by many potential customers as a risky way to buy software. Large competitors ridiculed Benioff and questioned the security and scalability of the SaaS model. In April 2001, Tom Siebel, CEO and founder of Siebel predicted salesforce.com would be out of business by 2002.
Most CEOs of tech start-ups would have responded to these virulent attacks by promoting salesforce.com’s technical features. But Benioff kept passionately and continuously communicating the value of SaaS not only to cost-conscious technology buyers but also to flexibility seeking C-level executives.
Benioff knew customers were struggling to afford software and they desperately wanted a software solution that would adapt to their rapidly changing needs.
He told corporate leaders that with the explosion of mobile devices the SaaS model would allow their staff to access the business – anytime, anywhere – something that wasn’t possible with the current centralized software delivery model. It was these insights that eventually overcame business customers’ skepticism about SaaS and salesforce.com.
Over the next seven years, salesforce.com’s subscriber base grew 1,500 percent. It now serves over 100,000 customers. In 2013, salesforce.com reached annual revenue of $3.5 billion, an increase of 35% from the prior year.
Benioff is now regarded as one of the pioneers of cloud computing. In 2012, he was names as Businessperson of the Year by Fortune. Benioff is also recognized as a brilliant salesperson. Business Week calls him the Oprah of Silicon Valley