A Series of Forbes Insights Profiles of Thought Leaders Changing the Business Landscape: Alex Dayon, President of Salesforce.com’s Applications and Platform Products…
There is a wave of digital disruption coming at CMOs from all fronts. The world has shifted over the past five years, mostly because of the emergence of the “internet of things”–a world where nearly everyone and everything is interconnected in a web enabled network. But according to Alex Dayon, former co-founder of Business Objects and now president of Salesforce.com’s applications and platform products, “we could call ourselves the “internet of customers” because we’ve always connected devices and apps. It means there’s a customer behind it. By 2020 there will be 50 billion connected devices. And behind every device, whether it’s a smartphone, a car, a toothbrush, or a light bulb, there is a customer. What does it mean for the world of advertising? What does it mean for the world of the CMO? What does it mean for any business? It makes our world so exciting today because it’s a complete and profound rethinking about the meaning of the term customer,” reflects Dayon.
Alex Dayon, President of Salesforce.com’s Applications and Platform Products
Alex feels there’s never been a better time to be in technology. He started 25 years ago in Paris as part of the founding team of a company called Business Objects. He was the first employee and part of the three founders. It was the emergence, in 1989, of the client server era. Business Objects’ claim to fame was that it created a database system that anyone could use through a very simple intuitive interface query – ask a question and get an answer. They patented the technology for what they called the semantic layer. As a result, any user could talk the language of the database without the intercession of an IT professional.
Business Objects became the first non-American company to go public on NASDAQ in ’94. “It was an interesting experience when I started my career. I was running the product there. Then I went to start my own company in 2000 called InStranet. It got acquired by salesforce.com in 2008 , which was another interesting journey because in 2008, salesforce.com, was only a $748.7 million revenue company. This fiscal year we expect to reach $5.3 billion. It makes an interesting ride in six years in terms of growth–driven by a profound shift in terms of how enterprises see our future,” says Dayon.
Dayon’s job at Salesforce.com centers on the product organization and meeting with CIOs and CMOs and to a much greater extent than ever before–CEOs. Alex sees the technology agenda now becoming top of mind for the CEO because business is being completely disrupted by the fact that their customers, their products and their apps are connected like never before. “That means you need to rethink the way you run your business. You even need to rethink your value proposition,” says Dayon.
The software and services business is itself transforming—where the focus is on design for usage and not about features anymore. It’s not about how complex is your product. It’s about how to make it easy to use, how fast it’s going to be onboarded. It’s all about how many times a day and many hours customers use the product. Certainly Salesforce.com was among the vanguard to disrupt the IT industry based on this new model.
“That’s really the first key driver we see in our industry. The second one is it’s about connected products and experience. Those products are connected like never before and it changed the whole concept of what the customer relationship is with my brand and my product. It’s really about subscription models and the need to share your customer journey. So if you build a product for usage, if you leverage the amount of connectivity that your customers have for your brand today, then you should build a business model where you need to earn your business every month and create value for your customers every month and make your business out of it,” continues Dayon.
“When I joined Salesforce.com after it acquired my company, I was running an application for call centers and in 2008 Salesforce.com was the leader in selling software for salespeople, but not for call centers. Within two months of having been acquired, Marc (Salesforce.com founder and CEO) said to me, ‘You’re launching the Service Cloud’ which is a big generation product. And at the time it was a small product. It probably represented closer to $50 million in revenue for salesforce.com in 2008 and this year it’s about a $1 billion revenue opportunity. It has been a very successful product,” says Dayon.
Dayon sees how the digital world is changing every business and feels salesforce.com has become a partner for digital transformation. For example, Coke has built an application using Salesforce so that truck drivers carrying Coke to customers have a Google App run by Salesforce where they’re in direct contact with the back office. On the consumer side, Dayon says “When I use my soda vending machine at the office in San Francisco, I have this App with all of my preferences recorded. In the morning I love to drink Dr. Pepper with vanilla. And in the afternoon I like to drink caffeine free Coke with cherry. So I have all those preferences recorded on my iPhone. I don’t even touch the machine. I just stick my iPhone by the machine and my phone is geolocalized and it automatically links with the machine. I can order what I want before I’m even in front of the machine. That’s the new world we’re now in. For clients like Coke they now know me as a consumer like never before.”
Dayon is also working to extend the company’s leadership position beyond sales and customer service and is especially focused on the marketing function. “We acquired ExactTarget last year which is now at the center of our Marketing Cloud. This is a platform that can receive billions of customer signals every day. One of ExactTarget’s significant customers is actually Microsoft. Microsoft runs the entire Office 365 customer experience on ExactTarget. Microsoft also has an enterprise blueprint that’s all about subscription, cloud, and connected customers. We’ve been the partner to a lot of very exciting businesses in the world,” says Dayon.
While salesforce.com and Microsoft compete on many level, they just inked a major technology agreement initiated between salesforce.com CEO Marc Benioff and Microsoft’s new CEO Satya Nadella. The two companies have a two year road map to integrate Salesforce within Office–within the Windows operating system on mobile device. Dayon runs the product groups and is deeply involved with that technology partnership. “We’re living in a world where there’s overlap, but if you look at where Microsoft’s revenue comes from, we clearly have way more synergies in terms of a product portfolio. This is really driven by our customers asking us to have better integration with the Windows environment and the cloud. I think the new CEO at Microsoft is willing to ponder these kinds of development more than ever before,” continues Dayon.
With marketing representing a $1.2 trillion activity globally, marketing technology will command $100 billion to $200 billion of that spend, creating an arms race among the major software companies to gain a share of this huge and fast-growing market. “We see the CMO with more technology budget than the CIO in the coming two years. That’s clearly a huge trend. We really see a major shift into what technology means to businesses. Technology used to be about the back office–maximizing your ERP, your inventory, your financial system and your HR. That was actually what the CIO was in charge of. But that’s the back office. Today there is a whole new wave of applications with those connected customers that it is much bigger and much more important in terms of value creation, because it’s completely disrupting the definition of your customer experience. And we have acquired three companies (Radian6 in 2011, Buddy Media in 2012, ExactTarget in 2013) in the past three years to build our marketing cloud because its where the action is today in the technology world,” says Dayon.
Dayon is an engineer by training and holds a master’s degree in electrical engineering from Ecole Supérieure d’Electricité (SUPELEC) in France, but became an entrepreneur very early in his career contrary to the usual path for French student. “I went to a top university and I was an engineer in computer science and was a geek when I was 18 and 20 years old. I was one of those guys on Apple II coding stuff and trying to build something. If you look at France, France I think is a country of engineers. The French are very good at technology. But they’re very poor at monetizing technology,” says Dayon.
Dayon describes his unique journey as an engineer. The French engineering schools are considered world-class, but most people end up working for the big French companies, where they’re going to build Airbus planes or fast trains or the Concord. Dayon remembers receiving Byte magazine every month and was inspired by its reporting on all of the disruption happening in technology at that time. And as it turned out, his first job out of school at the age of 24 was to become a founding entrepreneur.
“I bumped into two guys. One was a product manager at Oracle. The other one was a sales guy at Oracle–Bernard Liautaud and Denny Payre. We had dinner and they showed up with the Oracle annual report from 1989. Oracle at that time was not that big. They said, “This is us in five years.” I love guys like this. I thought ‘that’s exactly the type of business I want to be in.’ I love to ‘burn the boats’ and just go where there’s no way back to where you were before. We thought we could help people in business by solving this big problem around accessing and managing data. That’s how Business Objects was born. We had a crazy idea and we built that company that became one of the biggest French success stories by focusing on the user and building a business. My first job was an entrepreneur so we probably made plenty of mistakes. We learned that whatever ideas you have you need to crash test it. And that’s why I love entrepreneurship. You never have the right idea at the beginning. I am sure no entrepreneur really had the right idea on their on their own, but it’s when you want to really execute that idea and the sooner you make it public, the sooner you pitch people, the sooner you’re going to receive feedback and the stronger you’re going to get. You make your idea better every day. And I think that’s the process that I enjoy as an entrepreneur. I’ve been twice an entrepreneur in my life and somewhat at salesforce.com, as Marc encourages us to run the business like a series of startups inside the company,” says Dayon.
Dayon feels that a good part of what has made Salesforce.com so successful is Marc Benioff’s ability to maintain that original entrepreneurial spirit at scale in his management team. “Marc is very good at blending a management team made of people who have been running large organizations like Keith Block who runs our Distribution organization. So here are guys who have been running super large, high scale sales and marketing organizations and guys like myself who have been serial entrepreneurs in order to keep the company being able to scale, but also always to continually reinvent itself by always focusing on the needs of the customer, says Dayon.
“Salesforce is really a new operating system for other businesses. I can tell you I never had this much fun in my entire career than now,” concludes Dayon.
Bruce H. Rogers is the co-author of the recently published book Profitable Brilliance: How Professional Service Firms Become Thought Leaders
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