Benioff and the Great Glass Elevator (with apologies to Roald Dahl)

Profile picture for user slauchlan By Stuart Lauchlan June 23, 2014
Summary:
A Great Glass Elevator ride into the clouds for a sit-down with Salesforce.com CEO Marc Benioff, evangelising the difference between the consumer cloud and the enterprise version.

IMG_1301
The Great Glass Elevator

I'm not terribly good with heights. So riding a glass elevator attached to the outside of the City of London's tallest building up to the 26th floor in a matter of seconds isn't my idea of fun at the best of times.

But last night that elevator ride was up the side of the newly renamed Salesforce Tower London and up top was CEO Marc Benioff, in town for official ribbon-cutting duties.

So into the glass elevator and up into the clouds it was to be.

I admit I was deeply curious anyway. Last month Salesforce.com announced on the UK leg of the Salesforce1 tour that a  City of London landmark would be renamed the Salesforce Tower London.

While this came as a bit of a surprise to some of the firm’s neighbors in what was then the Heron Tower, it was pitched as a significant sign of Salesforce.com’s commitment to expansion in Europe, currently the fastest growing region for the firm.

This commitment includes opening data centers across the region - one in the UK in August, followed by one in France and one in Germany by the end of 2015 - as well as opening a new office in Paris later today.

Last night though was the official opening of Salesforce Tower London, with Benioff joined by Lord Livingstone, the UK  government's Trade Minister and who as Ian Livingstone, formerly CEO of BT, had been both a customer and a partner of the cloud firm over the years.

The UK government’s very keen on Salesforce.com increased investment in London as it fits nicely alongside the tech inward investment drive currently being pursued.

Salesforce.com might not have the brand recognition among the general public of, say, Microsoft or Google, but it’s a good name to add to the list. Hence Livingstone’s praise for

such a visionary decision to expand into the UK…we're not just pleased to have you in the UK and looking for you to expand more, we're proud to have you in the UK.

We are very much open for business. It's not just the tax rate of 20% or the special rates for R&D - it’s because our future lies in being of the most international countries in the world.

But first

But all that was to come. First, after a stomach-wobbling ride up 26 floors in that glass elevator, I sat down with Benioff for a chat before the official opening ceremony of what is the first, but inevitably now not the last, building in London to be renamed for a technology company.

Screen Shot 2014-06-24 at 10.57.46
Benioff and Livingstone

Rather to my surprise, I found that rather than his usual haunts of San Francisco and Hawaii, Benioff’s been living in Europe for the past month, something he did last year as well by way of a deep-dive into the region and its business and technology climate. This year, he’s impressed:

We’re in a very good place. We see a lot of the most innovative things happening in Europe. Europe is at a tipping point. You can remember the times when I used to come to London and camp out at the Mandarin Oriental hotel and for years we were just trying to get the message out there. We’re not having to do that anymore.

I’m seeing a lot of the same trends as in the US. Customers who want to go faster, customers who want to be more collaborative and embrace the cloud. There’s been a big shift from when I first started talking to people in Europe ten years ago, there’s just no comparison. You don’t have to rationalize the cloud any more. There is no more intellectual debate to be had there.

That said, the need for evangelism isn’t at an end. A theme that’s been percolating in recent weeks for Benioff is the difference between the consumer cloud and the enterprise cloud.

This is clearly an important distinction to establish in a post-NSA world where the party line from the enterprise cloud players has been that it is their consumer counterparts, such as Google and Facebook, that have most to lose from the scandal.

That said, when a figure as high profile as the CIO of the Bank of England pitches the line that anything put out into a US provider’s cloud is vulnerable to inspection by the US authorities, then there’s a need to ram the message home that enterprise and consumer clouds are different beasts. Benioff argues:

There is still a general misunderstanding that the enterprise is like the consumer cloud. It isn’t. With Google and Yahoo! if you’re sending an email, you put data in, but then you don’t know where that email is once it’s sent. Once you give those companies your data, it becomes their data. If you post something to Facebook, it becomes their data. Photos become Instagram’s data.

That’s not true with enterprise cloud. It’s your data. You know where the servers is. You know its location. You know which country the data is in. You can move that data around within that enterprise cloud. We can’t access our customers data. There are lots of different examples, but it really is very important to talk about that and explain this.

When we sign a contract with a customer, we are their servant. That’s not the case with consumer clouds where the masters are different.

While on this general theme of personal control over data, I wondered what Benioff’s view was on the controversial Right to Forgotten judgment from the European Court of Justice. While this directly relates to the likes of Google and Yahoo! and other search engine providers, the potential is there for the principle to extend out into the wider cloud market.

Slightly to my surprise, although less so in light of the consumer v enterprise cloud argument, Benioff is in fact supportive of the ruling:

I’m all in favor of consumers having more power and more control over their data. As a consumer, you should have all of the rights. It’s like a cloud Bill of Rights. As a consumer or as an enterprise, you should have the right to be forgotten or to add or take away you data.

Even if it extends to criminals and terrorists and assorted ne’er-do-wells, I wondered:

It should work in exactly the same way as it does in the analog world. It’s law enforcement’s job to secure the streets. It’s the consumer’s job to be able to expect privacy and transparency. We have to be able to balance the two. This should be a global thing.

Advice for Larry?

While thinking on a global scale, I wondered whether the current Salesforce.com meme of the Internet of Customers worked as well in Europe as in the US and other parts of the world, given that any Internet of Things riff is dependent on high levels of connectivity that just don’t exist universally in parts of the region.

Benioff doesn’t see this as a factor it seems:

You need to remember that the vast majority of enterprise software in Europe is purchased in three countries - France, Germany and the UK - and in a number of major cities - London, Paris, Munich, Berlin. In those intellectual centers, you have very good network coverage.

IMG_1306
It’s Paris that plays host to the next leg of the Salesforce1 tour this Thursday with 5000 pre-registered delegates. One development that’s occurred since the London version is the announcement of the Salesforce Wear initiative, pitched at the emerging market for wearable devices. Benioff explains:

We are moving to the post-PC revolution. We’ve seen the emergence of new form factors like tablets and phones. The next generation devices will be on the wrist. You can see this already with devices like FitBit. There are now next generation devices coming from other players, all of which have screens and mobility.

Most importantly the phone is on the wrist. We’re seeing a lot of phone tech moving to the wrists. I’ve seen a number of new kinds of apps, which are about notifications of new email, new messages. We will be able to interact and query and not just have information pushed to you. We launched Salesforce Wear with a vision to help our customers and partners to think about this revolution.

Meanwhile other vendors, including arch-frenemy Oracle, are facing their own travails in embracing the cloud revolution. Last week Oracle took a bit of pasting from Wall Street as its transition to a cloud services model impacted on its fourth quarter numbers.

Oracle CEO Larry Ellison quite correctly pitched the line that the firm was undergoing a shift from an upfront license model to a recurring revenue subscription one, but Wall Street wasn’t happy.

I asked Benioff what advice he’d give to his former boss on how to convince the investor community to play a long game. He demurred to comment specifically, perhaps wisely given the ongoing ‘detente’ between the two firms, but added:

People want to see the money. Traditional enterprise software players are having more of a challenge. Microsoft’s probably doing this best, SAP probably the worst and Oracle’s in the middle.

Time was running out and there were ribbons to cut and champagne to quaff, but I couldn’t help but pick up on the praise for Microsoft, once the enemy, but now Salesforce.com’s new best friend, a moniker Benioff accepts with a wry smile. It’s all down to Microsoft having a new leader with vision in Satya Nadella, he states simply.

So it wouldn’t have happened under Steve Ballmer’s regime, I asked, already knowing the answer which was delivered emphatically:

It could not have happened under Ballmer.

My take

Despite a few grumbles from some of the neighbors, the Salesforce Tower London is a very big step for the firm.

Taken alongside the data center investments and the new jobs that go with them, it’s a great commitment to the European market by the US firm.

Benioff commented after the opening ceremony just how impressed he was by the levels of growth he saw in London, a message that would have gladdened the heart of Trade Minister Livingstone.

Screen Shot 2014-06-24 at 10.51.51

Now, on to Paris and what promises to be an interesting product announcement at 9am local time on Thursday…

 

Disclosure: at time of writing, Oracle, Salesforce.com and SAP are all premium partners of diginomica.