Dreamforce 2012: Is Benioff Right To Follow Facebook In All-Social Strategy?

Following in the footsteps of Facebook and pushing on with a social-led strategy, despite the recent troubles the social network has experienced, is not risky, CEO of Salesforce.com Marc Benioff has told TechWeekEurope.

Facebook has been under plenty of scrutiny from the tech and financial communities after its IPO did not go as planned. Not only did Nasdaq fail to send notifications of some successful bids to investors on the day of the IPO, leading to some losing money by rebidding, the company’s stock price has halved since Facebook went public in May.

The company has also been under fire for not finding ways to make more money from ads, which it has been attempting to address by placing an emphasis on mobile.

A lot of Likes for Facebook

Yet Benioff and Co still have a lot of love for Facebook, which is a customer of the cloud company. Salesforce.com has been adding various social features to its lineup, such as the Marketing Cloud, which lets customers buy and deploy Facebook adds or updates from the Salesforce dashboard. Chatter, it’s chief collaboration play, is described as “Facebook for the enterprise”.

This week it has pinched some Facebook terminology too, incorporating it into its own marketing spiel, such as “social graph”, which it has used for its own “enterprise social graph”.

Earlier in the day at Dreamforce 2012, Benioff described Zuckerberg as a “prophet” of the industry. Even one of Salesforce.com’s recent acquisitions, HR software vendor Rypple, which has now become Work.com, was partly based on advice from Facebook CIO Tim Campus, Benioff revealed. It’s clear he is a big Facebook fan.

And Benioff told TechWeekEurope today that a company that has almost a billion users could not be written off. “I wouldn’t judge a company based on its IPO. I really think Facebook is an incredible company and what they’ve done in eight years is exceptional,” he said.

“I don’t think you can dismiss a company that has a billion users, half of which logged on today. I think you’d like to have that company and I know I’d like to have a company like that myself.

“It bodes very well for their future opportunity because of that.”

As Benioff has previously said, he believes a couple of mistakes were made on the IPO, saying Facebook probably should have gone for the New York Stock Exchange rather than the Nasdaq. He also suggested Zuckerberg should have taken the company public a “couple of years earlier.”

A social enterprise

Following the social strategy certainly hasn’t done Salesforce.com much harm. It was named the most innovative company in the world in both 2011 and 2012 by Forbes. Whilst the company still records losses, its revenue is growing well. In August, it reported $732 million in second quarter revenue, up 34 percent from the year before, and raised its forecast for third quarter income.

The only issue Salesforce.com has come up against was around the ‘social enterprise’ term. When groups complained that the term should refer to certain non-profit groups, and asked Salesforce.com to stop using the term, Benioff said it would quit using the term and stop trying to trademark it. Yet at Dreamforce there were still references to the ‘social enterprise’ on the Dreamforce official website and in a rap by MC Hammer before the first keynote.

Benioff went into more detail on what happened over the use of the phrase. “In the UK especially, that term has a political orientation that we are not sensitive to in the US, where it does not have that orientation,” he told TechWeekEurope.

“We’d been using it for a couple of years really without incident and then it came to my attention over a period of a couple of weeks that there were a number of people who were doing very good work in the UK, all of which we support with our products – that’s how they know about us.

“So we agreed we would transfer our marketing from ‘social enterprise’ to ‘social revolution’ or ‘business is social’. I thought they made a great case and accepted their argument.”

Whilst IDC research manager David Bradshaw said going social and following Facebook was a risky strategy, as it targets younger audiences rather than the older, non-social demographic, it was the right one, given the state of the market. He, like Benioff, believes that many pieces of software will look like Facebook in the future.

“Facebook have defined how you do things. Anybody else has to follow the paradigm that they’ve set now. There’s no point in departing from it,” Bradshaw said. “Facebook set the rules, just as Saleforce has set some of the rules in cloud.

“It’s the correct strategy for the current environment. It’s hard to name a good player in the market space because many of them have very database-driven marketing. That was good for the time but there has to be something better than that. Social has to be better than that.

“It’s a risk, but it is the right risk to take. The contrary risk to take is not having a social strategy, which is much more of a risk.”

Expect Salesforce to continue borrowing ideas from Facebook then and proselytising about social for some time to come. That does beg the question, however, of how Salesforce.com can be seen as such an innovative company if it borrows so much, ideologically speaking, from Facebook?

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