Process and Service Innovation 2012

Process and Service: Marc Benioff, Cloud Computing

Marc Benioff, Chairman and Chief Executive Officer of salesforce.com, says his mission is to “destroy the software industry.” In the process, he has reinvented it and has created a fast-growing company that leverages new technology and business models and provides businesses an alternative to the traditional model of buying and installing software on their own equipment.

Instead of selling physical packages of software, salesforce.com uses what is known as the software-as-a-service (SaaS) or cloud computing model. There’s nothing physical to buy or install. Users access software via the web. The company charges customers a monthly fee for each registered subscriber that uses its web-based software and platform.

The rapid acceptance of cloud CRM applications has compelled other software companies to follow the salesforce.com model. Research firm IDC said that by the end of 2009, 76 percent of all organizations in the US used at least one SaaS-delivered application.

SaaS delivers applications over the Internet, generally through a web browser. Following the success of the SaaS model, other vendors began offering infrastructure-as-a-service (IaaS), the delivery of services such as computer processing and storage via the web; and platform-as-a-service (PaaS), whereby developers can access tools and build applications without the need to purchase any software or hardware.

In May 2008, salesforce.com became the first publicly traded cloud computing vendor to receive ISO 27001 Security Certification, the internationally recognised standard for certifying that a provider's information security management system protects its information and that of its customers.

The SaaS model has moved beyond CRM to include other types of applications, including accounting/finance, supply chain management, enterprise resource planning and human capital management. The worldwide SaaS market is estimated to grow 17.9 percent, reaching sales of US$14.5 billion this year, according to the Gartner Group. The research firm predicts that SaaS will become a US$22.1 billion market by 2015.

Founded in 1999, Salesforce.com has more than 100,000 customers and 8,500 employees worldwide. After going public in 2004, it posted total revenues of US$2.3 billion in the year ended January 31, 2012, up 37% from 2011.