TechWeb's Benioff Preaches To New Flock: CMOs

Sep 21, 2012 (05:09 AM EDT)

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Marc Benioff, the tech industry's most talented tent revival preacher, has focused his gospel for a new group: marketing executives. The CIO vs. CMO discussion has been increasing and Benioff, like all master salesmen, has been listening.

As I heard repeatedly at our recent InformationWeek 500 conference, a power struggle looms between IT and marketing organizations. As businesses seek new ways to interact with customers via social channels and demand decision-making information faster, cloud services also give marketing execs a way around IT. At the Dreamforce conference in San Francisco this week, Benioff told the faithful that he is concentrating on the marketing executives.

And when Benioff concentrates on CMOs, you'd better pay attention.

Benioff's Dreamforce showmanship, combined with an ability to speak language that riles up his believers, keeps improving year after year. Outfitted in a suit and colorful sneakers that caused a Twitter flutter, Benioff led a three-hour keynote Wednesday that used the word "inspirational" repeatedly.

Marc Benioff

In an IBM 2012 study, CEOs rated social as the No. 2 way to reach customers, he told the crowd, early on. (Sales teams ranked No. 1.)

"That for me was when a light came on," Benioff said. "We believe so strongly that Salesforce's core mission is to help you, our customers, to connect with your customers in a whole new way."

By 2017, CMOs will spend more on tech than CIOs, Benioff added, citing a Gartner study. Social represents the biggest change to marketing in 60 years, he said. He laid out these tenets before launching into his product announcements, which target the customer's marketing needs.

Not for the first time, Benioff expressed his belief that marketing will be Salesforce's next $1 billion business. Among other developments, his team showed off Marketing Cloud services, the fruit of the company's Radian6 and Buddy Media buys, and Chatter for Communities and for Services, designed to extend Salesforce's collaboration tools to partners and customers. His team also rolled out Chatterbox, the long rumored answer to Dropbox, and, an employee goal-setting, feedback, and performance review system. The presentation focused on customer problems, not software features.

Why Marketing

At a press and analyst Q&A later on Wednesday, Benioff is pressed on the genesis of his marketing ambitions, and whether they are realistic. He cited a trip to visit a casino customer in Las Vegas. "For the first time when I showed up for the meeting, the CMO is in the room," Benioff says. "They spend more than $1 billion in marketing. It dwarfs their IT spend. That's true for most organizations." Harkening back to the Gartner study that CMOs will outspend CIOs by 2017, Benioff went further. "I think maybe Gartner is underestimating what's happening," he said, suggesting it may flip faster than 2017.

That line of thinking is core to his plans for growing Salesforce.

"We're telling stories," Benioff said. "We're trying to talk to customers in their own language. That is very much a transformation that is paramount for us."

In fact, Benioff noted, his top 500 managers have each been assigned to work with five customers, to get more examples like General Electric, where his company's technology powers a new social effort called GE Share.

And, as he pledged to stand by these marketing execs as they wander into the promised land of happier customers and happier employees actually collaborating better, he told some amusing stories.

Oracle vs. Salesforce: Social Acquisition Face-off
Oracle vs. Salesforce: Social Acquisition Face-off
(click image for larger view and for slideshow)
In his keynote, Benioff brought up George Zimmer, CEO of Men's Wearhouse, who says tools are helping his company find out what millennials like and don't like about his stores, which succeeded originally with baby boomers.

"You're gonna like the way Salesforce works, I guarantee it," Zimmer quipped.

Benioff's special conference guests during the week, from Richard Branson to Tony Robbins, pack plenty of star power. But the subtext of the week is definitely IT's star: Is it rising or falling?

CMO Power: Fact Vs. Fiction

Is the CMO truly becoming the No. 2 officer in the company, right behind the CEO, as Benioff proclaims?

InformationWeek columnist Larry Tieman stirred debate in a column earlier this year that outlined why he believes CMOs and CFOs will rule above CIOs. Disruptive market forces are diminishing the business need for a CIO, and increasing marketing's importance and ability to go around IT, he said. "Those who argue that there will always be a need for a CIO don't understand how many CEOs are asking why this position needs to be part of the executive team," Tieman wrote.

Of course, the smartest CIOs are already plugged into the need to be business partners of a new kind. Among our recent InformationWeek 500 award winners, just look at the innovative social media work being done by Robert Urwiler, Vail Resorts' CIO and by Filippo Passerini, Procter & Gamble's business services group president and CIO. Passerini's team is presenting real-time data in decision cockpits to speed business decisions.

As for the Gartner CMO data that Benioff keeps touting, look closely--many people fail to supply the context, says analyst Frank Scavo, president of Computer Economics, who was on hand at Dreamforce to hear Benioff's plans. His research firm focuses on metrics for IT management.

"I am skeptical about this prediction," Scavo said. First, Gartner provides, as evidence, that the typical CMO budget is 10% of revenue, whereas the typical IT budget is 3.6% of revenue, he said, adding that both sets of numbers vary widely by industry. But, 100% of the IT budget is for IT products, services, and salaries, whereas only a fraction of the CMO budget is for IT, he said.

"What we have here is mostly a matter of definitions. If you count everything that the CMO does that somehow involves a computer, perhaps you could get close to the CIO's budget. But if you really compare apples to apples, I doubt that the CMO budget for technology would come anywhere close the CIO's budget for IT throughout the organization," Scavo said.

However, the general trend Benioff is pointing out is correct, Scavo said. Many products, such as automobiles and medical devices, now have huge amounts of embedded IT. So in some companies, you could argue that the product development organization spends more on IT than the CIO does. This shows how pervasive IT has become and why CIOs must continue to broaden their business focus, he said.

Step back and look at what Tieman and Scavo are saying. Now, consider whether your businesses are buying into Benioff's marketing-focused vision. One point of interest: Look at his collection plate.

Salesforce will be the first $3 billion enterprise cloud company, Benioff said, and will also soon hit its first one billion transaction day.

Benioff sells his vision much more passionately than other tech CEOs and he speaks in a language your business colleagues understand. Benioff hasn't said CIOs are not in the room anymore. But know this: he will sell to your company, whether you're in the room or not. He will sell to the disciples who are buying. It's up to IT leaders to decide whether to keep feeding the CIO/CMO tension, or run smarter and faster alongside business partners.