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Chairman's Network Lunch 10 June 08 - Event Review

What will the next billion dollar software company look like?

• Steve had been an executive at Oracle, Siebel and Salesforce from start-up to billion dollar company, so is uniquely positioned to judge.
   
• He quoted John Paul Getty who said that we only need to 3 things in life in order to be happy and successful:
•   Get up early every day
•   Work hard every day
•   Find oil........ !!

Steve admires the work ethic – he was brought up amongst a ‘poverty of expectation’ in Liverpool but, thanks to a great and encouraging maths teacher, went on to do a maths degree and PhD then started work at Oracle, Siebel & Salesforce.com.

Steve outlined some management styles and the future of software technology.

• First management style - Think and execute global, create huge compelling visions like Oracle wanting to be bigger than IBM, Siebel bigger than SAP and Salesforce ending of the traditional software industry. Build detailed plans to back up the vision, e.g. salesforce use a planning methodology called V2MOM which stands for Vision,Values,Methods, Obstacles, Metrics for ALL employees, not just executives.
   
• Second: Revenue solves all problems - set aggressive revenue goals and reward employees with a share in the company.
   
• Third: Certify all customer facing employees - all customer facing employees should be able to articulate the company as well as the CEO, test and certify them. Poor performers can and must be fired.
   
• Fourth: Philanthropy - You can do well as a company and do good - all great companies will build a philanthropic core value like salesforce.com's 1:1:1 model of giving 1% of their stock, 1% of their product and 6 days a year of employees to work on charity. It's good for business, employees and those less fortunate. Like the green wave, Climate wave, corporate philanthropy will become increasingly important to hire the best talent.
   
• The traditional software world is rapidly dying because the web is dramatically changing the world and the software industry.

Steve joked on a quote from Einstein’s who when adjudicating a physics exam paper which turned out to be the same paper as the year before said: ‘that’s OK, the answers are different this year’.

• All Venture Capital investment and innovation is on the web and not in traditional client server models.
   
• Microsoft, Oracle and SAP are facing three huge challenges to move to the new world, re-writing their technology, change of revenue model to subscription and the inevitable employee resistance to change, all three companies are wedded to the past.
   
• Salesforce created a $9b software as a service company in the most competitive software market place CRM others will do the same in ALL other software markets.
   
• The driver is the customer, ease of use, faster time to vale and no complexity in house.
   
• Using the power of the crowds "wikinomics" will be important - let your customers, partners and employees shape the best business ideas using the web.
   
• The next billion dollar company will build its product on a Platform-as-a-service like Force.com from salesforce, just like SAP built is product on an oracle relational database 20 years ago.
   
• The consumer world on the web like Google, eBay, Amazon and others are shaping the way business software applications will be delivered.

There will be some consistent factors i.e. great people with great ambition but the next hugely successful company will be a ‘software as a service’ company.