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Business Report

The King of Cloud: Q&A with Marc Benioff

The CEO of Salesforce.com explains why traditional software is dead and how giants like Oracle are twisting the meaning of cloud computing.

Back in 1999, when the first Web boom was in full swing, Marc Benioff, then an executive at Oracle, had a vision for the future of software.

No more software: Salesforce.com CEO Marc Benioff was an early believer in cloud computing.

Benioff’s idea was that business programs could be used directly over the Web instead of being installed on users’ machines. He quit his job and founded Salesforce.com, which began offering software for managing sales and customer relationships that was accessed only through a browser. Benioff took the company public in 2004 and saw it added to the S&P 500 in 2008. Today, he is credited as a pioneer of cloud computing and as the man who proved software “as a service” could be a big business.

Benioff exchanged e-mails with Technology Review’s IT editor Tom Simonite about where cloud computing is headed.

TR: A few years ago, you declared the “end of software.” Could you give a brief progress report on how that’s going?

Benioff: The End of Software—a revolution we called for more than a decade ago—is now here. Cloud computing has exploded into a $150 billion phenomenon and supplanted traditional business software, even in the biggest companies. Corporations like NBC/Universal, Dell, and some of the largest conglomerates in Europe and Japan use our service.

In the future, all software will be delivered in the cloud. Businesses will be freed from buying infrastructure that goes out of date, depreciates in value, and requires a hefty investment to keep running. People will access all the services they need via the Web and have them upgraded without doing a thing.

Will the established giants of enterprise computing successfully adapt to the cloud era, or will a new set of born-cloud businesses dominate?

The only constant in our industry is change. We are in a new paradigm, one that is built on three pillars—cloud, social, and mobile technologies—and the companies that understand this will dominate.

Oracle didn’t architect its products from the beginning for the cloud. And it hasn’t rebuilt them for the cloud. That’s a problem. It built the wrong product and is now trying to justify it. That won’t work. We are in the most exciting time in our industry, one that’s about innovation, collaboration, and going social—and Oracle is talking about the same old proprietary mainframes. The whole of their recent Open World conference was about buying computers. That’s not the cloud!

I’m not selling any hardware or software. That’s the right vision for our company and that’s the right thing for our industry. The existing companies are trying to resell their cash cows—and missing the most exciting opportunity of the next decade.

So some takes on cloud computing are taking it in the wrong direction?

Yes. Beware of the false cloud! The false cloud is the anti-cloud.

Clouds don’t come in boxes. As Amazon’s technology chief once said, “Litmus test: if you have to buy more hardware just to get started, it is not a cloud.” Cloud computing is built upon a multi-tenant technology model that allows users to benefit from a shared architecture. That makes computing democratic; it serves companies of all sizes. It is not just for the rich, but for governments and organizations in the developing world.

You’ve recently launched Chatter, a service for companies to create private social networks. Why do social media and the cloud go together?

We are in a new era of computing, which is being radically transformed by the social networking sites like Facebook and Twitter and advances in mobile devices like the iPhone and iPad, which are replacing the desktop. The number of social networking users has surpassed e-mail users. Nearly a quarter of all time spent online is spent on social networks like Facebook. And people access the Internet more from mobile devices than from desktops. Salesforce.com was born cloud and now we are being reborn social.

You acquired a company last year, Heroku, that provides computing infrastructure where companies can launch apps, like Facebook games. Will Heroku extend Salesforce to become a platform for other companies’ cloud software?

One of the most pivotal decisions we made was to make our code available to let other companies build their own applications. This was the way to grow our company, and it was a way to help further the industry. There was a huge audience of developers, both in our customer base and at a number of startups, looking to get into the cloud. We knew if we could make our infrastructure available as a service, we could help level the playing field—and unleash their innovation. Today, there are more than 400,000 developers on the Force platform who have created more than 250,000 custom apps.

Heroku helped us further that reach and better serve customers because it is more open. It currently supports six programming languages and a growing community of more than 100,000 developers. It enables the proliferation of social and mobile apps. Look at how Warner Bros. used it to develop a streaming movie app on Facebook, where customers can watch and buy movies within the social-networking site (see video).

You often describe the cloud as inherently more “open” and less “proprietary” than conventional software. But if you’re using, say, Salesforce’s Chatter, aren’t you still locked in to that product?

Chatter is really a stream of information that can be captured by proprietary UIs like ours, or it can be integrated into others. We have open APIs so that every social network can participate in Chatter. We have 100,000 customers on Chatter, and I think they are becoming addicted to it, but that’s another story. “Sticky” and proprietary are two very different things.

You can use all of our services anywhere, on any device, and you can write your own apps in any language. If you use Heroku, developers can write in whatever language they want. If they decide they want to move their app, they can take that code and data and run it on other clouds. Nothing’s proprietary, no one’s locked in.

Is there an area of business that the cloud has barely touched that it will utterly transform?

I do believe that there are industries that will still be transformed by the shift. One area I’ve been watching is health care. We’ve all been waiting for the health application that will revolutionize how we share and communicate with our doctors, and help us make better health-care decisions. The shift ignited by cloud plus social plus mobile will allow the proliferation of these new apps and automate the industries and professionals left behind by the last generation of technology. As I’ve said before, this is the most exciting time I’ve seen in my 30 years in the technology industry.

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