End of software, end of handouts

Eighteen months ago the term dotcom was a byword for massive business potential, whereas today it implies "approach at your own...

Eighteen months ago the term dotcom was a byword for massive business potential, whereas today it implies "approach at your own risk", writes Ross Bentley.

However, according to Mark Benioff, chief executive at customer relationship management (CRM) supplier Salesforce.com, the next generation of viable Internet-based businesses is emerging. Benioff recently attended the World Economic Forum as one of 100 delegates described as global leaders of tomorrow. He identifies three dotcoms that are trailblazing this brave new world.

First is PayPal, a dotcom that offers the online equivalent of cash, to allow Web surfers to exchange payments easily. Users open an account with PayPal linked to a credit card or bank account. To send money, they simply type in an e-mail address and the amount.

His second choice is E-Bay, the leading online auction Web site.

Benioff points to his own company, Salesforce.com, as the third example of an online business cutting a dash. While acknowledging that he may be biased he justifies his choice with the claim that his is the fastest selling CRM software in the world.

Salesforce.com delivers its services over the Internet via the application service provision (ASP) model.

"When I started this company I said I wanted to see the end of software," says Benioff. "For years, companies have been bullied into buying large enterprise software systems. Through the ASP model companies have no software to install, no hardware to manage - this reduces the complexity of the whole implementation. We say the subscription payment model is the way forward - the others say buy the software, own it, love it. These are two totally different models. One must be wrong."

Benioff is aware that the CRM industry has an image problem. "Fifty per cent of CRM projects leave companies with nothing to show," he says. "In no other industry would this failure rate be allowed. In the US there have been countless law suits against large enterprise software suppliers. If we want to excite and persuade our customers to buy more software and services we need to make sure that it is going to pay off."

Benioff says opportunities have dried up because companies are still trying to figure out what to do with all the IT kit they already have.

Alongside the end of software, Benioff is keen to see the end of handouts. "Rather than hand out cash donations, companies should look to build charitable donations into their business structure. I have just returned from the World Economic Forum where there were 3,000 delegates and 10,000 protesters.

"People have a problem with companies like Starbucks, for example, because if it opens a shop on, say, Hyde Park and it does well - the stock price goes up on the New York Stock Exchange and the money flows into Seattle, stripping the value from the local community where the shop is situated. This causes disenchantment."

Salesforce.com has put 1% of its stock into a foundation. "This allows us to put 1% of the profits back into the community," says Benioff. "We have built community centres in San Francisco, Israel, India, Nepal and Dublin and have dedicated 1,500 hours of our employees' time over the past few years. In this way we can deliver business services to the community and have created a new model for globalisation."

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