Q&A: Marc Benioff, Salesforce chief executive

Benioff answered questions about security and rival offerings from SAP and Microsoft

SAN FRANCISCO: Salesforce chief executive Marc Benioff answered questions from the press during his keynote at this year's Dreamforce customer and partner event in San Francisco.

Questions covered the security and regulatory implications facing customers moving to the cloud, Salesforce's launch of its new Chatter product, and the latest cloud attempts from SAP and Microsoft.

Press: As businesses go global, how do you manage their regulatory requirements?
Marc Benioff: The customer has to understand what kind of requirements they are working towards, and then we work with them to ensure that they comply.

How are you dealing with what you have termed a David and Goliath situation in the software industry?
Salesforce is still 160th the size of the top software companies. We are showing customers a new way to lower costs, and easier to use applications than traditional software companies offer.

With the launch of Chatter, you are entering the collaboration market. How big is this market?
It's hard to say because it's so wide-ranging. For example, the sales automation market is worth $2bn to £4bn [£1.2bn to £2.4bn] and the customer service market is worth about the same. When you look at the customer application and deployment market, it is like $150bn [£90bn] because it includes all the different types of servers. So my guess is that the market is at least as big as the sales and service market, and the reality is that it is probably larger.

What business processes need to change to make room for Chatter?
The power of Chatter is that all the transactions are already happening. The system is just illuminating them, so we're just turning on a stream of illumination that is already there. We are just exposing audit trails, which is why the platform was so easy to build because we have done so much work with financial institutions. If you asked me how will Chatter enable our customers to make their next business change, I wouldn't know the answer. But I do know that people will be smarter just by using the application. Learning how to use the application is also easy. Just like if you use Amazon, you will be ready to go on Salesforce. If you use Facebook and Twitter you will be ready to go on Chatter.

How do you filter the information on Chatter?
Through the Sharing Model. Salesforce Chatter leverages Force.com's proven multi-tenant sharing model, enabling companies to decide which employees have access to what information.

How are you going to deal with customer security concerns about cloud computing?
Cloud computing is the future. If not, then Google and Amazon are in trouble. The key to security is transparency, and that is why if you go to Salesforce.com, you can look at the current state of the service cloud, such as downtime. We also give new customers our code. What we understand is that there is no finishing line when it comes to security.

Why are so many of your customers still unaware of the Service Cloud?
The Service Cloud is still not as popular as the Sales Cloud. Even though I have toured all the major cities to publicise it, people did not know what it was.

Do you need to hire more sales representatives or marketing professionals?
Our focus has to be like that of Microsoft's: to keep going until it becomes a standard. The good news is that we're not facing a lot of competition in this space, so we've still got a lot to sell.

Lastly, you said that Microsoft and SAP don't get cloud computing. Have your opinions changed since Dreamforce 2008?
I believe that Microsoft does get it now. I was impressed by their launch of Azure. However, SAP are in a whole lot of trouble. SAP have a religious and fundamental denial of the cloud that may have just ruined their company. If you look at all their on-demand attempts, such as NetWeaver and CRM-on-demand, they have never happened. SAP will remain an innovation-less company, although it has nice people. Oracle do get things, but I think they are disabling those things with the Fusion migration.

VIDEO: Salesforce.com on the new Chatter service