First Coffee for September 12, 2005

David Sims : First Coffee
David Sims
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First Coffee for September 12, 2005

By David Sims

The news as of… well, now, here in San Francisco for Dreamforce '05 First Coffee's just going to post as needed, next week we'll be back on the early-morning stuff:

One thing to realize: There is never, ever such a thing as a sold-out sporting event. Went to SBC Park here in San Fran yesterday with a great old friend from the Chicago area, as the Chicago Cubs were in town to play the Giants. Bought, ah, secondhand tickets out in front of the stadium during the second inning, $50 club seats for $25. Great game – the Cubs won – great seats, great day, great stadium, great beer, great kickoff to San Francisco.

Thanks to W. Sibusiso "Sibu" Tshabalala, President and CEO of Pro-SAAP Solutions, LLC who First CoffeeSM mentioned in a piece a while back, who wrote in to say “You are correct; I 'never' have to spell my name over the phone (smiley face).”

Might as well change it to John Smith, right?

As one can imagine there was quite a bit of tittering over Oracle buying Siebel here at’s Dreamforce. Referred to simply as “the news this morning,” CEO Marc Benioff’s keynote address a couple hours ago led off with that. You might have seen this by now, but here’s the full text of his internal memo on the subject:

Oracle put Siebel investors out of their misery today. We have been doing that for Siebel customers for years. Our announcement today at Dreamforce will accelerate that. It’s the end of software. Client/Server software is being consolidated by Oracle just as mainframe software was consolidated by Computer Associates. Oracle’s strategy is simple, instead of innovating, buy as much installed software as possible, call it all Oracle Fusion, and make sure it all uses Oracle’s database.

Now, the same thing that happened to Peoplesoft will happen to Siebel, it will die. Customers will look for new solutions and new providers. Employees will look for new employers. Siebel on Demand, a joint venture between Siebel and IBM, will be the first to be buried. Siebel on Demand is written exclusively on DB2 and Websphere and runs in IBM data centers. Oracle will kill it. Oracle does not sell DB2.

Now, the opportunity to be the global leader in the CRM market has opened for Our dream is becoming a reality as the world will move to new on demand solutions. Already the fastest growing public CRM company in the world, with over 50% market share in On Demand CRM, is well poised to become the world’s new global CRM leader.

It is auspicious that this is the very day that we are announcing our new strategy at Dreamforce with AppExchange and our Winter ’06 release.

Aloha, Marc

Certainly this doesn’t reflect the sheer glee and sense of triumph that Benioff certainly feels at seeing Siebel go under. There was business competition between the two, certainly, as there is between anyone in the space, but with these two it was always personal. Tom Siebel mercilessly blasted when they came out with the idea of on-demand CRM software, saying things like that company won’t be around in a year, and of course is known for their vicious jabs at Siebel over the years.

All to say the people have an extra spring in their step this morning, sparkle in their eyes, and, in their estimation, one whopping validation of the entire hosted model.

The keynote this morning focused on… drum roll please… AppExchange,’s vision to be the eBay of enterprise software.

“Calling all developers,” Benioff said in the keynote. Their idea is to let anybody and his brother write applications that run on the platform, list ‘em all and anybody who wants to, can download them and use them, paying whatever price the developer wants.

It’s so key to what wants to be when it grows up that Benioff said the name of the platform going forward will be AppForce.

Benioff said won’t even take a cut of everything that gets posted. Not now, anyway, First CoffeeSM’ll be surprised if this hands-off policy lasts.

There’s a certification process you can go through if you want to, and whether your stuff is certified or not will be noted on the site, but according to Benioff it’s not necessary to actually have the certification to post your stuff. Caveat emptor, baby.

You can test-drive the apps before buying, though.

When it went live this morning there were 35 apps provided by to seed the directory, and 35 apps written by development partners. Benioff said he wants it to be as easy to download apps as it is to download iTunes to your iPod, in service of what he calls “breaking the applications backlog.”

It is a great idea, First CoffeeSM agrees, to be able to create and distribute applications with no software, no hardware, and no IT complexity, as Benioff said. If you have a Web browser and you know how to operate it, you’re good to go.

As Woody Driggs, Accenture’s Systems Integration for CRM head, said during the keynote “This is the first time I got my head around an open-source environment in business applications.” He went on to say that frankly he was a skeptic that his biggest customers would take up the on-demand world, but he was wrong – “They’re asking us to implement this,” he said.

So is hewing closely to the eBay model – eBay doesn’t guarantee that the CDs you buy from their site won’t be scratched and unplayable, but as that vendor sells crappy things her feedback’ll reflect that, and basically Benioff sees the AppExchange environment as self-regulating through such methods.

EBay, iTunes – there are worse business ideas to emulate in delivering business apps.

Questions of liability – if you download an app through the system, it destroys your entire server and wipes out all your company data, can you sue – weren’t addressed. First CoffeeSM imagines Benioff’s had lawyers working on that question and others like it, however. Smart guy, Marc Benioff.

Although, as an industry friend of First CoffeeSM’s said at the press-investors-analysts luncheon afterwards, he kind of misses the Hawaiian shirts Benioff used to sport, he kind of misses the irascible temper and flaming darts he used to throw a lot more frequently. He wondered where were the kind of jokes about the Oracle-Siebel acquisition like "Whaddya get when one dinosaur mates with another dinosaur? Two dead dinosaurs," that Benioff'd crack out in the past.

As Benioff was describing’s strategy for using CRM as an app to get into a company, and once you’re in there cross-sell more stuff, he said to First CoffeeSM that was “exactly Siebel’s strategy.”

There were flashes of the old Marc Benioff: Talking about Microsoft’s threatened entry into the hosted CRM market Benioff dismissed it, saying that while they “are a huge monopolistic factor in our industry,” drawing a laugh from the audience, he’s not extremely concerned since “they’ve somehow misplaced Version 2.0 of their CRM product,” moving straight into Version 3.0, which’ll be released… sometime. “Microsoft still has that early-90s idea of how computing was,” when everything was proprietary, that Benioff sees as so passé. does practice “co-opetition” with Microsoft, basically, Benioff said, whatever they do we have to acknowledge and find a way to make that work for our customers. He’s realistic.

One just hopes he isn’t growing up.

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