Give Benioff some room, boys and girls…

I have to admit, the terseness and severity of the words used in the headlines surprised me a bit, but thinking back I wonder why such surprise? Why wouldn’t Salesforce.com react strongly to Microsoft’s SaaS plans which caused such a buzz this week? Well, Salesforce.com did. Specifically, Salesforce.com CEO Marc Benioff did. The headlines today told of Benioff’s words and emails and some really good quotes. The only unknown is whether Benioff imagines this pro-level trash talking is from fear or from a position of strength. SFGate.com ran the story under the headline “Salesforce.com blasts Microsoft SaaS plans,” with a sweet New York Times-style long-winded panicked subtitle, “Salesforce.com Inc has interpreted Microsoft’s recent statement that it will host its own CRM application to mean that Microsoft has admitted that the future of software is doomed.”

This piece is mostly devoted to the axis of Benioff’s theory, which revolves around Bill “The Big Man” Gates’ announcement that he was turning his title of chief software architect over to Ray Ozzie. Ozzie, as most in the CRM industry recall (with the rest surely to follow as Benioff gets more and more press), is the author of a memo of October 2005 entitled "Services Disruption,” which, with a little spin from Benioff, “stress[es] the importance of SaaS and Microsoft’s failure to grasp the change.” In the SFGate piece, Benioff goes on to say that "The world has changed. Everyone and everything is becoming a service. … Now, everyone agrees that the future of software is not software at all, but rather an industry … of heterogeneous services. All companies and executives now agree: no software application will remain standing at the end of this widespread transformation." These statements echo previous remarks from Benioff and indeed are at the heart of the once-revolutionary Salesforce.com strategy.

The online Tech Chronicle covered the story under the headline “Marc Benioff tees off.” Though Tech Chronicle actually managed to get in touch with Benioff while the exec was doing business in Singapore, not much new is added here. The one facetious comment is pretty funny, though: "Well, its 7:29AM in Singapore, and I just read that Microsoft announced a new offering to compete with us while I was asleep.” Benioff, of course, had been billing Microsoft’s then-imminent SaaS release as “the worst kept secret in the business” for weeks. Benioff offered for public release his interoffice memo yesterday. The full text runs below and can also be read here. And perhaps tomorrow, some snappy Microsoft PR will shoot return fire across the bow. I sure hope so…

Is it the end of software as we know it? 

Just three weeks ago, Bill Gates announced he would leave his day-to-day responsibilities at Microsoft, and turn his title of Chief Software Architect over to Ray Ozzie. Why did he choose Ozzie, a relative newcomer to Microsoft? Ozzie had made his views widely known in his October 28, 2005 memo called, "Services Disruption," where he stated the future would be dominated not by software like that made by Microsoft, but by services offered by companies like Google and salesforce.com who were changing the software game forever by delivering a new paradigm.

Simultaneously, companies like Google and Yahoo have announced their intention to compete against Microsoft Exchange by offering a version of their consumer email services repurposed for business. Gmail for Domains (http://www.google.com/hosted) and Yahoo Business Email (http://smallbusiness.yahoo.com/email/) are serious competitors to the traditional email server franchise. And, it’s not stopping there, as competitors to Microsoft Excel spreadsheets (http://www.google.com/googlespreadsheets/tour1.html) (www.numsum.com) (www.irows.com), and even those taking on Microsoft Word processing (www.writely.com) (www.writeboard.com) (www.tracker.com) begin to take hold as serious and viable alternatives to Microsoft Office software. Ozzie was right. Steve Ballmer has publicly fretted that he would not be "out hustled by anyone," but the fact is that Microsoft is being out hustled by everyone.