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enterprise| enterpriseauthorTom KrazitNoneAre you keeping up with the latest cloud developments? Get Tom Krazit and Joe Williams' newsletter every Monday and Thursday.d3d5b92349
December 17, 2020
IBM CEO Arvind Krishna will also take over as chairman of the tech giant's board of directors, the company said on Wednesday evening. Former CEO and current chairman Ginni Rometty will retire from the position on Dec. 31.
Krishna is trying to turn around "Big Blue," which has struggled to compete with the likes of Google and AWS as cloud computing becomes more popular. Now, he's aiming to carve out a leadership position for IBM in the hybrid cloud and AI industries. Krishna previously spun-off IBM's legacy IT infrastructure business.
Joe Williams
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
Big Tech benefits from Biden’s sweeping immigration actions
Tim Cook and Sundar Pichai praised President Biden's immigration actions, which read like a tech industry wishlist.
Newly-inaugurated President Joe Biden signed two immigration-related executive orders on Wednesday.
Photo: Chip Somodevilla/Getty Images
January 20, 2021
Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.
January 20, 2021
Immediately after being sworn in as president Wednesday, Joe Biden signed two pro-immigration executive orders and delivered an immigration bill to Congress that reads like a tech industry wishlist. The move drew enthusiastic praise from tech leaders, including Apple CEO Tim Cook and Alphabet CEO Sundar Pichai.
President Biden nullified several of former-President Trump's most hawkish immigration policies. His executive orders reversed the so-called "Muslim ban" and instructed the attorney general and the secretary of Homeland Security to preserve the Deferred Action for Childhood Arrivals, or DACA, program, which the Trump administration had sought to end. He also sent an expansive immigration reform bill to Congress that would provide a pathway to citizenship for undocumented individuals and make it easier for foreign U.S. graduates with STEM degrees to stay in the United States, among other provisions.
<p>Biden's Day One moves suggest that immigration reform will be one of the key areas for allyship between Silicon Valley and the Biden administration over the next several years. The industry is sorely in need of common ground as Democrats pledge to use their power over Congress and the White House to crack down on Big Tech. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>"We welcome President Biden's commitment to pursuing comprehensive immigration reform that reflects the American values of justice, fairness and dignity," said Cook in a statement to Protocol. "This effort will strengthen American communities and the pathways to opportunity this country has long fostered." </p><p>Cook, who is the chair of Business Roundtable's immigration committee, said he looked forward to working with Democrats and Republicans on a "permanent solution for Dreamers that includes a path to citizenship."</p><p>"We applaud @POTUS's quick action on COVID relief, the Paris Climate Accord, and immigration reform," Pichai <a href="https://twitter.com/sundarpichai/status/1352021111479832576?s=21" rel="noopener noreferrer" target="_blank">tweeted</a> Wednesday. "Google has supported action on these important issues & we look forward to working with the new administration to help the US recover from the pandemic + grow our economy."</p><p>An Uber spokesperson also affirmed the company's support for President Biden's actions. "At Uber, we have long supported positive immigration reform and an effective system that upholds core American values," the spokesperson said. "Uber will continue to support Dreamers, and we welcome the new Administration's effort to reform our nation's immigration system."</p><p>The tech industry, which relies heavily on foreign workers, has spent the last four years <a href="https://www.usatoday.com/story/tech/2017/08/31/tech-industry-prepares-new-trump-fight-over-daca-dreamer-protection-program/622897001/" rel="noopener noreferrer" target="_blank">battling with the Trump administration</a> over efforts to shut down vital talent pipelines from countries including India, China and Iran. Over the last four years, tech giants have filed <a href="https://abcnews.go.com/Business/dreamers-embody-apples-innovation-strategy-apple-ceo-tim/story?id=66030999" rel="noopener noreferrer" target="_blank">amicus briefs</a> in high-profile <a href="https://www.vox.com/2020/1/16/21069827/twitter-microsoft-linkedin-public-charge-trump-immigration-tech-companies" rel="noopener noreferrer" target="_blank">court cases</a> and lobbied in favor of opening up U.S. borders to high-skilled workers. Despite protestations from Silicon Valley leaders, the Trump administration continually added uncertainty to the H-1B visa application process, resulting in significant backlogs. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Biden's immigration bill would put money towards clearing visa backlogs, eliminate visa caps on certain countries and make it easier for people on temporary work visas to get green cards. Perhaps most significantly, it would immediately give the 11 million undocumented immigrants in the U.S. a pathway to become citizens. </p><p>The executive orders on DACA and the Muslim ban will immediately appease immigration advocates, including those inside the tech industry, but the toughest battle still lies ahead: rallying support in Congress for immigration reform, which has failed for years. Still, there may be some in the Republican party who are willing to work with the Biden administration on key pillars of the proposal. On Wednesday, Sen. Lindsey Graham, who was a leading player in immigration talks during the Obama years and a top Trump ally, told CBS he is open to creating a path to citizenship for undocumented immigrants.</p><p>"What we are really looking for is making sure there is congressional action and there is a legislative solution," said Karolina Filipiak, senior director of government affairs at the Information Technology Industry Council, a tech trade group. "We don't want to be in the same position four years from now or eight years from now [with] a new administration that could rescind the program." </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Companies including Facebook and Google are hoping to work with lawmakers in Congress to create bipartisan support for reform, particularly as they face regulatory headwinds of their own. </p>
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Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.
Protocol | Enterprise
Twilio CEO Jeff Lawson explains how he decided to face off with Parler
Also, why he thinks the $3.2 billion purchase of Segment will help Twilio's customers help their customers and why he's OK with being reliant on AWS.
"I think in a society, words matter, actions matter," Twilio CEO Jeff Lawson said. "That's why companies have things like Terms of Service and acceptable use policies."
Photo: Twilio
January 13, 2021
Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.
January 13, 2021
Cloud computing companies were one of the few segments of society that enjoyed 2020. But even companies like Twilio, whose stock price tripled over the last 12 months, have had enough of 2021 already.
Last Friday, in the wake of the deadly attack on the Capitol, Twilio sent a letter to the right-wing social media app Parler notifying the company that it was violating Twilio's acceptable use policy for two of its authentication services. Parler decided to turn off Twilio's services rather than moderate calls for violence against elected officials on its app, which became a moot point after AWS cut Parler off from its own computing and storage services Sunday evening.
<p>This was not the way CEO Jeff Lawson wanted to kick off a round of publicity for his new book, "<a href="https://www.amazon.com/Ask-Your-Developer-Software-Developers/dp/0063018292" rel="noopener noreferrer" target="_blank">Ask Your Developer</a>." But little that has happened this month has gone according to plan, and he is quick to defend his decision from last week.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>"If you walk into a movie theater and yell 'fire,' or you walk into an ice cream parlor and start yelling racist epithets, don't expect to be a customer of that establishment for very long," he said in an interview with Protocol Tuesday.</p><p>Lawson built Twilio into a $60 billion company based around communications APIs that allow app and web developers to build customer service and support capabilities into their own products. Just as Stripe became a central hub for payment technology for a generation of developers, Twilio enjoys a similar position when it comes to communications technology.</p><p>In his conversation with Protocol, Lawson explained the thinking behind Twilio's decision on Parler, the strategy behind <a href="https://www.protocol.com/newsletters/protocol-enterprise/why-did-twilio-pay-3-billion-for-segment-developers" target="_self">last year's $3.2 billion acquisition of Segment</a> and why developers should be free to choose no code, low code or "yo code" tools when building their apps.</p><p><em>This interview has been edited and condensed for clarity.</em></p><p><strong>Given everything that's happened in the last week, I was wondering if you could walk me through your decision to suspend service to Parler?</strong></p><p>I think in a society, words matter, actions matter. And we all have to work together to build a society. That's why companies have things like Terms of Service and acceptable use policies, because they say "What is acceptable?" There's a wide variety of things that are acceptable, but there's also fringe things that aren't.</p><p>This is not new to the online world, but think about the offline world. If you walk into a movie theater and yell "fire," or you walk into an ice cream parlor and start yelling racist epithets, don't expect to be a customer of that establishment for very long. I think what you see is the online world doing the same thing.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>When people at the fringes of society are doing things like advocating for violence, overthrow[ing] the government, murder and hate, those are things that are largely illegal. And therefore companies like Twilio are saying: That's not how you're allowed to use our products, our platform,</p><p>This is fringe, extremist stuff. And if this were some other religion we'd be having a very different conversation. I just think that because it is happening in America, and it's largely white, it's "why are we shutting it down?" But when it's religious extremism of other varieties? People have a very clear sense: "Oh, yeah, that's wrong. And that shouldn't be allowed."</p><p><strong>What was the motivation behind the Segment deal?</strong></p><p>Our goal is to build the leading customer engagement platform. And customer engagement is essentially the sum of all of the interactions a company has with its customer that makes the customer love the company and want to buy products and want to be a loyal customer and repeat customer. And there's really two parts to building a great customer experience or customer engagement.</p><p>One is knowing your customer, and then, two, engaging with them using communications to say relevant things and to actually be a good communicator. Twilio has long played in the second category of helping companies to communicate with their customers, with text, with voice, [with] video, with chat across many different parts of the customer experience spectrum, whether it's on the ... marketing side, or the sales side, or the customer support side, or while you're using a product.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>But the first thing you need to do is really understand your customer: understand who they are, what products they're looking for and how they use your product. That's what helps you be really good at engaging with customers. And that's what Segment does.</p><p>If you think about especially B2C companies, the way the story of who you are, what products you're interested in, what your purchase history is, that is all told through data that is on various systems throughout the company. The marketing system knows which emails you clicked on, maybe indicating that you liked those products; the ecommerce system knows which products you bought, historically; the customer support system knows how many times you've interacted with the company and the problems that you've had. The sum of understanding you is the sum of all those data points about you.</p><p>Segment allows companies to take all those bits of data that are siloed, all throughout the company and all those different computer systems, and actually pull them together to build a cohesive picture of, you know, you.</p><p><strong>The way that your customers go about this is they build these customer service products for themselves, using some of your basic plumbing tools. Do you see yourself increasingly competing with companies that sort of just provide that whole experience as a service?</strong></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>Generally speaking, companies need to be able to build parts of their customer experience that their customers value, because that's how you differentiate in the market. If you have the exact same customer experience as all your competitors, you're not going to be very differentiated, especially in the digital era where the perception that customers have so many companies is the digital experience you have.</p><p>Companies who win are companies who are good at building software that differentiates them in the eyes of their customers. Now, you do that by buying some things and building some things. And so a lot of companies will have, you know, SaaS products that they bought, but they need to make those SaaS products do new and interesting things to answer their customers' needs. </p><p>Many of the problems that arise are from companies having bought a whole bunch of SaaS applications that can't talk to each other. They become data silos, and getting the data out of one into the other in order to build a really cohesive experience is tremendously hard. Segment and Twilio allow you to take the investments you've made in a bunch of SaaS products and make them better.</p><p><strong>It appears you're all in on AWS from an infrastructure standpoint, behind your own platform. As you get bigger, have you considered multicloud, or bringing in other providers as you scale?</strong></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>We do have other vendors in the mix at Twilio, although the majority of our infrastructure is with AWS. That doesn't trouble me per se, because if you think about it, what do I want my product teams at Twilio doing? I want them building the things our customers care about.</p><p>Our customers don't really care about where our CPU and storage is. They care about what our products do, and how our products are making our customers' lives better. The more time that we get to spend doing those things that our customers care about and are buying from us, the better.</p><p>That's the great role of infrastructure; infrastructure lets you focus on the things that you do well as your core competency. We are very happy Amazon customers, they provide a great platform. Of course, it helps that I worked there in the very early days of AWS and I know a lot of the people there. But ultimately it's about picking the best tool for the job and then allowing your teams to focus on building the differentiation that your customers care about.</p><p><strong>You mentioned picking the best tool for the job. Increasingly, there are options from Microsoft and Google that are best-in-class tools for a job depending on different needs. But there is obviously some convenience of being all in on AWS, they have a certain way of doing things you understand, so your engineers don't have to learn different tricks. How do you balance that?</strong></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>Developers have the freedom to propose the tool for the job. Now, if it's a new tool we've never used before, there may be an architectural review, there may be a security review, etc. But ultimately, we want developers at Twilio who are building products to be able to essentially pick the right piece of infrastructure that's going to facilitate them building the best product.</p><p>That's one of the points that I make in my book, which is that company policies are useful to protect customers: say, security, and things like that. Of course, you want those things to be taken care of, but you also want to trust your developers to make the right technical decisions for the products they're building.</p><p>In fact, in the areas where we don't use AWS, that's because a developer thought that some other service would be the best tool for the job. And having gone through the appropriate reviews, we let them do that.</p><p><strong>How do low code and no code strategies play into your thinking over the next few years?</strong></p><p>There's three varieties of building tools, if you will: There's low code, no code, and I like to call it "yo code," for the traditional developer approach. There's the right place for each and the right audience for each.</p><p>I think there's builders of many different kinds in the world: There's builders who want to open an IDE and hammer out code, there's builders who want to drag and drop and there's builders who want something in the middle. And we support all those methods of building; we're not religious about saying, in order to build something, you have to write code, you have to love Python, or C or whatever it is.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div></p><p>We've got a variety of low code and no code solutions on our platform already. And I think the traction that we're getting with those really speaks to the fact that there's a lot of different ways to build and a lot of different types of builders out there. And ultimately, what we care about is that people are able to innovate at the pace and speed and with the tools that they're most comfortable with.</p><p><strong>Even "yo code" has incorporated a lot of abstractions over time, right? I mean, no one's doing assembly.</strong></p><p>I like to think of it like how we've used Moore's law over the last 40 years. Computers haven't gotten that much faster in terms of how we use them. It's not like your word processor is 10 million times faster than it was in 1990.</p><p>But how we've used Moore's law is to create abstractions that make it easier and easier to build complex, sophisticated software, including the internet itself, right? The fact that you can use Google Docs, which is a word processor, delivered entirely inside the web browser, that's so many layers of abstractions that basically compost the layers below, and make it so that, as a developer or a user, you don't have to care about those details anymore.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
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</div></p><p>That frees you to actually build more sophisticated, more agile software that gets updated more frequently. In many ways, as technologists and as [a] society, we've used Moore's law to do that, instead of to make our computers all that much faster for the user.</p>
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Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.
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Tom Siebel takes a victory lap after C3.ai’s blockbuster debut on Wall Street
C3.ai raised $651 million in its first day of trading on the New York Stock Exchange.
C3.ai shares closed at $92.49 on Wednesday.
Photo: NYSE
December 10, 2020
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
December 9, 2020
Tom Siebel strikes again.
Shares of C3.ai, the company he founded in 2009, just went gangbusters on the company's first day of trading on the New York Stock Exchange. Living up to its ticker "AI," the firm offers catered solutions that help clients like Shell and the U.S. Air Force, among others, predict when their machines may need maintenance.
<p>It's part of a booming industry to arm enterprises with the latest and greatest AI technology. Alongside startups that offer industry-specific applications, AWS, Google and the other tech giants of the world also stack AI-based products on top of their bread-and-butter cloud computing software. </p><p>But to Siebel, there are no competitors. In fact, he thinks no one is remotely close to offering what C3.ai can. SAP and Oracle? Siebel says they have "nothing but white papers" when it comes to enterprise AI. Salesforce? A laggard when it comes to innovation that only offers AI to suggest the next step in the sales process. AWS and Microsoft? Go-to-market partners that can't match the sophistication of C3.ai's offerings, but still play a critical foundational role. (Microsoft is a key ally and <a href="https://www.protocol.com/bulletins/shares-tom-siebel-c3-ai" target="_self">now shareholder of C3.ai</a>.) </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>"Every company in the world would like to be in the enterprise AI business," Siebel told Protocol. "Right now, I think we have a free run at it. I don't know where the competition is going to come from." </p><p>The secret weapon, according to Siebel, is what he calls "model-driven architecture," a form of software development that Siebel claims he's <a href="https://c3.ai/c3-ai-receives-u-s-patent-for-advanced-data-processing-methods-for-enterprise-ai-applications/" rel="noopener noreferrer" target="_blank">protected with a patent</a>. </p><p>"If you want to use a model-driven architecture, which is our secret sauce, you get to call 1-800-C3 and you license it from us," Siebel said. "If Microsoft thinks they can deliver it tomorrow, why would they be partnering with me? And if they want to build it, I can assure you we own the intellectual property rights to the idea." </p><p>Some <a href="https://www.businessinsider.com/the-shape-shifting-startup-tom-siebel-c3-ipo-2020-12" rel="noopener noreferrer" target="_blank">criticism has been levied at C3.ai</a> and its products, but Siebel brushes it aside, instead touting that companies are paying upwards of "$80 million and euros over time to license this technology from us." </p><p>"Every company is using me with one of Azure, AWS or Google," he added. "If they already have this stuff, why would they be paying me scores of millions of dollars?" </p><p>It's tough to bet against Siebel, a legend in the enterprise software world who was also <a href="https://www.forbes.com/sites/alexkonrad/2017/07/11/siebels-second-act/?sh=59209e7664d2" rel="noopener noreferrer" target="_blank">infamously attacked by an elephant</a> in 2009 (he's since recovered). It could get even harder following such an impressive public debut. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Back in 1995, Siebel created the customer relationship management industry with t before selling the company to Oracle for roughly $6 billion. Now, the company most identified with the software is Salesforce. But Siebel is charging hard at Marc Benioff's brainchild, <a href="https://news.microsoft.com/2020/10/26/c3-ai-microsoft-and-adobe-combine-forces-to-re-invent-crm-with-ai/" rel="noopener noreferrer" target="_blank">launching a new partnership</a> with Microsoft and Adobe to sell AI-backed CRM software.</p><p>While Siebel will quickly attack any attempt to compare C3.ai to Salesforce, the company does offer AI capabilities in the form of Einstein — which Salesforce says <a href="https://www.salesforce.com/news/press-releases/2020/11/24/einstein-now-delivers-80bn-predictions/" rel="noopener noreferrer" target="_blank">churns out over 80 billion predictions each day</a>. The key difference, according to Siebel, is that while Salesforce's Einstein only analyzes information included in a company's CRM system, C3.ai, Microsoft and Adobe's products will <a href="https://www.businessinsider.com/tom-siebel-adobe-microsoft-c3ai-salesforce-crm-ai-2020-11" rel="noopener noreferrer" target="_blank">also include valuable information from external sources</a>, like analyst reports and social media feeds. </p><p>"I've interviewed everybody who is a senior manager in Einstein, and I have a pretty good idea what they are doing," said Siebel. "I don't think there's anybody there who knows what AI is." </p><p>Now, armed with $651 million in new capital, Siebel is looking to capitalize on what he labels as demand that, until now, was outpacing C3.ai's ability to deliver. And 2021 is going to be all about "sales capacity, service capacity, and more people working with our market partners."</p>
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Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
Salesforce's Asia-Pacific CEO leaves as part of regional leadership revamp
APAC CEO Ulrik Nehammer is just one of four executives leaving the company.
Salesforce is shaking up its leadership in the APAC region.
Photo: Stephen Lam/Getty Images
December 7, 2020
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
December 7, 2020
Salesforce is overhauling its leadership team in the Asia-Pacific region, Protocol has learned.
APAC CEO Ulrik Nehammer, Chief Customer Officer Stan Sugarman, Chief Operating Officer Dan Bognar and EVP Lee Hawksley are all leaving Salesforce, according to a company spokesperson. Nehammer, Sugarman, Hawksley and Bognar did not respond to requests for comment.
<p>At Salesforce, Nehammer led the vision for the whole APAC region. Some of his direct reports will now report to Pip Marlow, the CEO of Salesforce Australia and New Zealand, per the spokesperson. Sugarman was in charge of stimulating growth in the market, a lucrative region that includes China and burgeoning corporate hubs such as India and Singapore. Hawksley helped lead the APAC sales team, while Bogner oversaw operations including sales strategy and workforce development.</p><p>It's unclear what prompted the executive revamp. Sales in the region were up 24% year-over-year in the nine months through October to $1.4 billion. That's compared to a 34% revenue growth in Europe and 24% rise in the U.S. in the same time frame to $3.2 billion and $10.7 billion, respectively. Overall, the APAC region accounted for roughly 10% of Salesforce's total revenue in the last full fiscal year. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>The shakeup comes nearly 10 months after <a href="https://www.forbes.com/sites/martingiles/2020/02/25/salesforce-co-ceo-keith-block-leaving-marc-benioff-in-sole-charge/?sh=4f651c2824b4%27" target="_blank">former co-CEO Keith Block left Salesforce</a>, a departure that led to Gavin Patterson assuming the role of CEO of Salesforce International, which includes Europe, Latin America and Asia. It also comes shortly after the company <a href="https://techcrunch.com/2020/08/27/salesforce-confirms-its-laying-off-around-1000-people-in-spite-of-monster-quarter/" rel="noopener noreferrer" target="_blank">laid off roughly 1,000 employees across the globe</a>, including in the Singapore office, Salesforce's regional APAC headquarters.</p><p>More recently, Salesforce made the splashy $27.7 billion purchase of workplace collaboration provider Slack, the company's most expensive acquisition to date. It's generally viewed as a move by CEO Marc Benioff to<a href="https://www.protocol.com/salesforce-buys-slack#:~:text=The%20rumors%20were%20true%3A%20Salesforce,door%20for%20all%20things%20Salesforce." target="_self"> more directly challenge Microsoft and its Teams platform</a> in the lucrative and increasingly competitive workplace collaboration marketplace. </p><p>Some analysts and industry experts praised the deal and labeled it a key opportunity for Salesforce to expand beyond customer relations management software. Others have raised concerns that the acquisition might signal that organic growth is slowing, a point underscored by a major sell-off of Salesforce's stock in the days following the announcement of the purchase. </p><p>Ultimately, Slack could be a key driver to help Benioff achieve his <a href="https://techcrunch.com/2018/01/04/salesforce-wants-to-be-a-60-billion-company-by-2034/" target="_blank">lofty goal of reaching $60 billion in annual revenue by 2034</a>.</p>
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Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
The New Enterprise
Software ate the world. Now it’s eating software companies.
Enterprise software juggernauts are trying to emulate (or just acquire) the smaller, specialized companies. It's not as easy as it looks.
Nom nom nom.
Image: Bloomberg/Getty Images/Protocol
January 11, 2021
Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.
December 3, 2020
Do you want excellence, or convenience?
Cloud computing allowed a generation of enterprise software companies to flourish, providing them the freedom to tinker with laser-focused ideas that could streamline stodgy business workflows within a browser or an app. That has led to a proliferation of different enterprise software vendors offering high-performance but niche products: According to data from Okta, which makes identity management software, its average corporate customer is using 88 separate apps across their business.
<p>One of the main things that made this shift possible was the decentralization of technology purchasing ushered in by the cloud. That allowed the leaders of different business units — from marketing to HR, purchasing to legal — to pick and choose the technology tools best suited to their team's needs. Those leaders were fed up with the top-down approach that dominated the early years of information technology, when a senior executive would pick a suite of software that everyone was forced to use regardless of whether it made sense for a given business unit.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Fast forward a decade, however, and some of the most in-demand enterprise software businesses <a href="https://www.protocol.com/manuals/new-enterprise/cloud-saas-spending-expensive" target="_self">help their customers keep track of all the money they're spending</a> on different software tools across different vendors. And depending on the pace of the economic recovery from the effort to fight the pandemic, the next few years could be lean ones inside corporations around the world, potentially forcing tech buyers to pick and choose just which of those many software products they really need.</p><p>That presents an opportunity ripe for the massive enterprise software players of the world — Microsoft, Salesforce, Workday and ServiceNow, to name a few — to continue acquiring smaller enterprise software companies while building an integrated platform of all the tools needed to run a modern business. Just this week, we've seen <a href="https://www.bloomberg.com/news/articles/2020-11-30/servicenow-to-buy-element-ai-in-artificial-intelligence-push" rel="noopener noreferrer" target="_blank">ServiceNow buy Element AI</a>, and, of course, <a href="https://www.protocol.com/salesforce-buys-slack" target="_self">Salesforce's massive $28 billion bet on Slack</a>.</p><p>And so there looks set to become a tension: one of balancing cost savings from buying good-enough software from the giants against the inexorable move to department-level IT purchasing that prizes functionality above all else. In other words, technology leaders will have some decisions to make about how they procure software over the next several years.</p><p>"My focus is on ensuring my employees are successful and productive wherever they are," said Alvina Antar, CIO of Okta. "Obviously, I am also committed to driving efficiencies [but] within the lens of ensuring my employees are empowered to be successful."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><h3>Good enough
</h3><p>The past decade was a golden age for enterprise software delivered as a service, either through a browser or a mobile app. Salesforce and others had proven the concept could work. Then the maturation of cloud infrastructure services just as companies were recovering from the Great Recession allowed enterprise entrepreneurs to very easily start successful companies.</p><p>Those founders usually focused on building one type of enterprise service — file storage, payroll, help desk management — and building it well, moving faster than more-established enterprise software companies such as IBM, Microsoft and Oracle to meet a new generation of workers where they wanted to be. More and more, those purchasing decisions were being made by the heads of vertical departments like marketing or finance who had a far better eye for quality and utility than a senior executive who was unfamiliar with the day-to-day needs of their group.</p><p>"People are by default going to SaaS in general. Nobody's saying, 'Hey, let's spin up a bunch of developers, or hire IBM to build this for us,'" said Jerry Chen, a partner at Greylock who has backed cloud upstarts such as Docker, Blend and Notable.</p><p>Many of those entrepreneurs now run large public companies and find themselves at the confluence of new trends.</p><p>Subscription fatigue is setting in among some software buyers, where the need for cost efficiency suddenly became a lot more important this year. Even Microsoft, which corrected its course after Satya Nadella took over and is riding high on the surge of interest in cloud services, asked employees in its security division last year to reduce the number of different SaaS tool vendors they used to reduce management burden.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>At the same time, early SaaS companies that were built around a single product or service are branching out into new areas in search of growth. Salesforce paved the way for this market, and it has grown far beyond its sales-productivity roots by acquiring dozens of companies over the last decade, most recently adding Slack and shelling out $15.7 billion last year to acquire business intelligence specialist Tableau.</p><p>That activity gives the enterprise software buyer something new to think about. For many years, the focused SaaS companies — here's <a href="https://blog.box.com/salesforce-slack-and-future-work" rel="noopener noreferrer" target="_blank">the obligatory "best of breed" mention</a> — were simply much better than the "good enough" alternatives from the largest enterprise players.</p><p>"The reason why we invest in best of breed is because we're betting on innovation," Antar said. "We're betting that the person that's living and breathing the capability that we're investing in will innovate much faster than the consolidated solution, because it's not [as much of] a focus."</p><p>But a flurry of acquisitions over the last several years — it's not just Salesforce — has brought some very talented enterprise product executives into the larger players, in hopes of helping them stay current and encouraging their customers to buy new, different services from a vendor they trust. Google Cloud's acquisition of Looker, SAP's deal for Qualtrics, and Twilio's acquisitions of SendGrid and Segment are all part of the same movement.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><h3>Learning from the best
</h3><p>There will always be enterprise software experts with the itch to start their own business, ensuring this cycle will continue for years to come. But it's certainly now the case that the product gap between startups and larger players — like Microsoft, Google Cloud and Workday — has narrowed.</p><p>The largest software companies have the most data, and they are getting better every year at extracting insights from that data. As they build a platform of enterprise software, they can design new products based on those insights as well as the best level of interoperability between those products.</p><p>Take Salesforce and Tableau: Salesforce already offered a business-intelligence tool called Einstein Analytics when it announced the deal for Tableau, but has since redesigned that product around Tableau's vision. Einstein Analytics, however, was designed to work in concert with Salesforce data stored in its Sales Cloud or Support Cloud products, and blending the two will theoretically give Salesforce customers a better analytics product that still works closely with all their existing data.</p><p>Yet there's work to be done. If the big companies want to disrupt a whole generation of thinking about enterprise software buying, they will need to get far better about actually integrating data between the startups they acquire and their most popular services, such as Sales Cloud or Microsoft 365 or Twilio Flex.</p><p>As a customer of both Salesforce and Tableau prior to its acquisition, Antar is waiting to see how that promised integration plays out.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>"The vision would be for us to be able to take advantage of the fact that a lot of our source of truth data sits within these clouds, that it allows us to be able to then understand and drive the quality of data, and [improve the] accessibility of the data, much more seamlessly as one platform," she said. Without that integration — which is harder to do than it sounds during the analyst call announcing a new acquisition — enterprise software buyers like Antar will continue to be cautious about acquisitive platform companies.</p>
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Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.
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