Cramer admits he can be a bit negative at times. So when he read some recent reports about the competition that Salesforce.com can expect from Microsoft and Oracle, he didn’t hesitate to voice his concerns. But on today’s show, Salesforce.com’s Chairman and CEO Marc Benioff got a chance to tell his side of the story.
CRM is trying to end the use of software by offering a basket of internet services that would replace traditional enterprise software, which is what Microsoft and Oracle sell. The company’s focus is on-demand computing, where a client subscribes to a service instead of buying old-fashioned CD-ROMs. Bennioff says that Salesforce.com just signed some major deals with Merrill Lynch, Cisco and Dell, to name a few.
But what Cramer wanted to know is how CRM plans to survive – compete, even – against two dominant players like MSFT and ORCL when no one else seems to be able to.
“The companies that win in our industry are the companies that change the game,” Benioff says. “They have to change the game in two ways: in the technology model and the business model. That’s what we’re about,” he says.
On the technology side of the equation, Benioff points out that CRM provides an on-demand service like Amazon or eBay or Yahoo! – but instead the customer runs his or her business with it. That’s very different than what MSFT or ORCL offer, he says.
On the business side, Benioff claims to have changed the model. Salesforce.com signs contracts that are recognized ratably over time, which he says are better for the customer.
Sounds like a good argument for Salesforce.com, Cramer says. But this is one instance where he reports and you decide. He won’t make the decision for you. Guess you’ll just have to do your homework.
Jim's charitable trust owns Yahoo!.
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