Becoming a Customer Company Keynote

@PeterCoffee

• Old Customers:• Prospects get content from Marketing

• Buyers negotiate terms with Sales

• Customers raise issues with Support

• Connected Customers:• Prospects seek insights from customers

• Buyers collaborate on competitor research

• Customers tell the world when they’re not happy

• Companies need new organizations & processes• Power to address issues pushed to edge of organization

• Collaborative response available on demand

Customers Today are Connected

Designing in services is now becoming commonplace,

making cloud integration expertise critical for

manufacturers.

•From simplistic services integration on iPhones to the full

implementation of voice-activated controls including emergency

assistance in the latest luxury cars, adding in services integrated to

the cloud is redefining the competitive landscape of industries

today.

•Revising a product or launching a new product generation with

embedded services can mitigate price wars, which is why many

manufacturers are pursing this strategy today.

TECH 5/06/2013

Products Today are Connected

• Connecting Machines• ‘OnStar’ network daily handles 150k human requests…

…and 130k machine-originated requests

• Some are critical, e.g. air-bag deployments

• Others may be infotainment, e.g. mileage ‘leader board’

• Connecting Processes• General Electric wind-farm management: 123 turbines

• Field-wide speed optimization, anti-icing behaviors

• 3% output increase US$1.2M/year added revenue

• Connecting People• Asics delivers RFID-triggered messages to marathoners

‘Cloud’ is a Medium of Connection

In This World of Connection…

• Everyone who works for you is your brand

• Service reps face customers more than salespeople

• Customers want to engage in product development:

Yes, your engineers may need to be customer-facing

• Merely “satisfied” customers aren’t enough

• We used to delight a prospect…

…and convert to a satisfied customer

• Now, brands with merely satisfied customers are invisible

• Delighted customers are your only credible marketers

• Service interactions are opportunities to re-enchant

• Collaboration is crucial to continuous delight

• Connected products give manufacturers knowledge of customer behavior

• Any team member may need immediate access to subject matter experts

• Mentoring, coaching & recognition need to be continuous and non-hierarchical

Connected Companies Win in the Cloud

• Customers: records become communities

• Employees: appraisals transform to collaborations

• Partners: supply chain grows into value network

• Financials: transactions evolve to scenarios

• Fighter pilot’s “OODA Loop”

“Observe, Orient,

Decide, Act”

@apmacmillan

/apmacmillan

@apmacmillan

in/apmacmillan

Andy MacMillan

Senior Vice President

Connect With Your Customers In A Whole New Way

Safe Harbor

Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of salesforce.com, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of product or service availability, subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services. The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, new products and services, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, the outcome of any litigation, risks associated with completed and any possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling non-salesforce.com products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of salesforce.com, inc. is included in our annual report on Form 10-K for the most recent fiscal year and in our quarterly report on Form 10-Q for the most recent fiscal quarter. These documents and others containing important disclosures are available on the SEC Filings section of the Investor Information section of our Web site. Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements.

The Customer Revolution

Today’s Platform Connects an “Internet of Things”

Terminal

Client

Devices

Products

LTE

SNA

Mainframe

LAN/WAN

Server

Cloud

1,000,000,000s1,000,000s1,000s

The Customer Revolution

1960sMainframeComputing

1970sMini

Computing

1980sClient Server

Computing

x 10x 100x 1,000x 10,000x 100,000x

2010sSocial

Revolution

1990sCloud

Computing

2000sMobile

Computing

SocialNew ways to connect

TrustNew ways to

build relationships

MobileNew ways to

reach customers

Big DataNew ways to

discover insight

CommunityNew ways to collaborate

AppsNew ways to build apps

Cloud ComputingNew ways to connect everything

New Ways To Connect With Customers

Social Revolution

Customer Companies Engage on Social Channels

Share Feeds, Profiles, Groups, and Files

4.5 Billion Aggregate Social Users

Touch Revolution

Touch & Local Aware Apps

Reach Customers Anywhere

1.7 Billion Touch Devices Shipped in 2012

Big Data Revolution

Collect Customer, Product and Usage Data

Gain Customer Insight

450 Billion Business Transactions / Day by 2020 (IDC)

Community Revolution

For Customers, Employees, and Partners

Private & Public Communities

Single Sign-on with Secure, Portable Identity

Ecosystem Revolution

Every Company is Building Mobile Apps

Customer Companies Use Apps to Interact with Customers

Requires a Customer Platform

Cloud Revolution

$111 Billion Industry in 2012

18% YOY Growth

Salesforce.com: #1 Enterprise Cloud Vendor

Cloud Revolution

Earn Customer Trust

Build Relationships on Equal Terms

Respect Privacy, Identity & Money

Companies are Disconnected from their Customers

Your Customers, Employees, and Partners are Connected…

Is Your Company Connected?

How do you become a customer company?

Become A Customer Company:Connect With Your Customers in a Whole New Way

ConnectedProductsConnectedProducts

ConnectedEmployeesConnectedEmployees

ConnectedPartnersConnectedPartners

ConnectedCustomersConnectedCustomers

Five Questions To Become a Customer Company:

1. How do you market to customers when they are everywhere?

2. How do you sell as a team with your customers?

3. How do you service customers when they are everywhere?

4. How do you build a customer platform?

5. How do you transform the way you work?

ConnectedProductsConnectedProducts

ConnectedPartnersConnectedPartners

ConnectedEmployeesConnectedEmployees

ConnectedCustomersConnectedCustomers

@ScottMagnet

OUR MANTRA

DEEP EXPERTISE

ENGAGEMENT STRATEGY

SALESFORCE EXPERTISE

ITERATIVE DELIVERY

CLIENT TRUST EARNED EVERY DAY

WHO WE ARE

/// CLIENT TRUST EARNED EVERYDAY/// CONSTANT EVOLUTION/// RESPONDING WITH URGENCY

/// COLLABORATION/// SHARED OWNERSHIP/// ROCKIN

MINNEAPOLIS | NY85+ EMPLOYEES

“THE ONLY SUSTAINABLE COMPETITIVE ADVANTAGE IS KNOWLEDGE OF AND ENGAGEMENT WITH CUSTOMERS.”

-Josh Bernoff, Forrester Analyst Competitive Strategy in the Age of the Customer

ENGAGEMENT QUADRANTS



@jowyang

Eras of the Internet

What role do corporations playif people don’t need them?

The Collaborative EconomyAn economic model where ownership and access are shared between people, startups, and corporations.

The only way, is to let go to gain more.

Is this a business disruption?

Sharing Is Not New

Lyft enables crowd to be transportation –avoiding taxis

AirBnb Enables Crowd to be a Hotel

LendingClub enables crowd to be a bank

oDesk enables crowd to be a workforce

Feastly enables your neighbors kitchens to be a restaurant

Liquidspace enables companies to rent from each other

Yerdle leverages Facebook connect to build a trusted network to share products

StokeBox enables collections to be shared for $5.

A properly shared car is

$270,000Lost RevenueOf auto sales

(1 shared car = 9 cars at average of $30k each.)

56

Is this a passing fad?

Societal Factors

75% said they predicted sharing of physical objects and spaces will increase in next 5 years

–Shareable Magazine Study

Population

Economic Factors

1975: 4 Billion

2050: 9 Billion

Technology Factors

• 87 phones per 100 people on planet

• Three quarters of startups use social tech like Facebook

A movement that’s only increasing

Out of 200 collaborative economy startups, total funding was over $2 billion

Of those funded, the average was $29 million (May 2013, Lyft raised $60m)

The sharing revolution is an unstoppable movement

Collaborated with the Revolutionaries

64

What can you do?

Collaborative Economy: Value Chain


1. Company as a Service

Toyota as a Service

Razors as a service

Beauty as a service

Luxury Handbags as a Service

Mobility as a Service

Company as a Service Insights

• Companies must offer goods products available on-demand.

• Rather than sell a product once –sell it 100 times

• To do this, focus on rental, subscriptions, and memberships


2. Motivate a Market

ScotteVest enables second market

UK retailer M&S fosters Swhoping

Patagonia enabling second market and altruism

Motivate a Marketplace Insights

• Companies must enable customers to resell, swap, gift –not hamper it.

• Foster a new experience: peer to peer relationships.

• Extract value from these new relationships, value added services, or take a cut from transactions.


3: Provide a Platform

Collaboration

FundDesignDevelopProduceDeliverStoreMarket

Co

Co-Fund new products like Kickstarter

Co-Design products like Nike

Co-Develop like Quirkly

Co-Customize Like Etsy

Co-Production with 3D Printers

Co-Storage of Products with Lockitron

Co-Deliver with Deliv

The Crowd Built a Car: Design, Funding, Production, Assembly, Wikispeed project enabled the crowd to build a 100mpg car

Provide a Platform Insights

• Reduce your operating expenses and risk as the crowd gets involved –and generates new value

• The highest form of loyalty is co-ownership, as they champion your brand

• As the crowd becomes the company, could the evolution of a corporation just retain an ecommerce system and a logo?


What will challenge us as we move forward?

Opposing Market Forces Abound

1. Governments, lobbyists, and institutions oppose

2. Buyers and sellers lack complete trust

3. Fragmented startups in every category

4. Uncertainty about which startups will stand the test of time

What are your benefits for letting go to the collaborative economy?

More efficient, as the crowd helps you

1

2 A long-term relationship with your vested customers

3 New value created between people, means new revenues

4 If you act now, you will have first mover advantage

Collaborative Economy: Value Chain 20%20%

20%20%

20%20%

20%20%

20%20%

20%20%

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20%20%

20%20% 20%20%

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20%20%

20%20%

20%20%

Collaborative Economy Final Take-Aways

• The crowd turns to each other to get goods and services –bypassing corporations

• The sharing revolution is an unstoppable movement

• Solution: embrace the Collaborative Economy Value Chain:

1. Company as a Service2. Motivate a Marketplace3. Provide a Platform

Let go of your company to gain the market.

What side of history will you be on?

Download Report: http://bit.ly/collabeco

Jeremiah OwyangPartner and Industry AnalystAltimeter Group@jowyang

[email protected]

mailto:[email protected]

Collaborative Economy Glossary

Collaborative Economy (Model): An Economic model where ownership and access is shared between people, startups, and corporations. Two sided Marketplace (Category): An online website where buyers and sellers of goods or services are sharing inventory, need, and transacting. Example: Ebay, Craigslist, AirBnb, 99 dresses.

Transactions (Verbs): There are many types of verbs that can be used in facilitation including: Buy, Sell, Swap, Lend, Gift, Co-own, co-fund , buy and more.

Maker Movement (Trend): An emerging trend where customers can self-design, create, produce, and distribute products and goods on their own.

Company as a Service (Strategy): Rather than sell goods in the traditional sense, offer products or services to customers on- demand or through a subscription model. Rent, Subscribe, or Gift.

Motivate a Marketplace (Strategy): A community around a brand enabling customers and partners to resell or co-purchase products, swap goods related to the brand, or even enable lending or gifting for no monetary exchange.

Provide a Platform (Strategy): Corporations that enable an ecosystem customers to build products and new services as partners — not just consumers.

Online Reputation (Feature): Any number of online features that store historical and current information about social profiles, individuals network connections, credibility, or reviews of previous and predictable behavior.

Social Sign On (Feature): A technology feature that connects websites with profile systems from social networks like Facebook, LinkedIn or Twitter connect enabling existing reputation, social contacts, and social graph information

Credits: Research Interviews

Airbnb, Molly Turner, Public Policy

Arbor Advisors, Dean Callas, Investment Banker

Ariba, An SAP Company, Joseph Fox, VP of Strategy

August Capital, David Hornik, Investor

Bazaarvoice, Stephen Collins, CEO

carpooling .com, Markus Barnikel, CEO

Cisco, Carlos Dominguez, SVP, Office of the COB and CEO

ConnectMe 360, Brian Hayashi, Founder

Decide.com, Shauna Causey, VP, Marketing

Enterprise Holdings, Ryan Johnson,

WeCar AVPeToro, Yoni Assia, CEO and Founder

eToro, Nadav Avidan, PR and Communications Manager

eToro, Adi Yagil, Head of Social Media

Gazelle, Israel Ganot, CEO

HomeExchange, Ed Kushins, Founder

Jive Software, Christopher Morace, Chief Strategy Officer

LiquidSpace, Mark Gilbreath, CEO/Founder/Skipper

Lithium, Rob Tarkoff, President and CEO

Lyft, Kristin Sverchek, General Counsel

MuckerLab, William Hsu, Co-Founder, Partner

Sasson Capital, Vivian Wang, Venture Capitalist

oDesk, Gary Swart, CEO

oDesk, Shoshana Deutschkron, Director, Communications

OuiShare, Antonin Léonard, Co-Founder

Oversee.net, Gene Chuang, CTO

PivotDesk, Alex Newman, Director, Customer Development

Sass.me and Oversee.net, Min Chan, GM of Mobile

SCOTTEVEST, Scott Jordan, CEO and Founder

Shareable Magazine, Neal Gorenflo, Founder

Shasta Ventures, Rob Coneybeer, Managing Director

Collaborative Lab, April Rinne, Chief Strategy Officer

Collaborative Lab, Lauren Anderson, Chief Knowledge Officer

The Mesh, Lisa Gansky, Author, The Mesh: Why the Future of Business is Sharing

Zuora, Tien Tzuo, CEO

Zuora, Brian Bell, CMO

Deborah Schultz, Innovation Strategist

The following people provided guidance, reviewed content, tested ideas, or most

importantly, challenged the thesis during the project:

David Armano, David Berkowitz, Richard Binhammer, Mel Blake, Erik Boles,

Michael Brito, Noelle Chun, Steve Farnsworth, Lyle Fong, Ian Greenleigh, Shel

Holtz, Noah Karesh, Kevin Kelley, Matt Krebsbach, Wendy Lea, Evelyn Lee, Geoff

Livingston, Jacob Miller, Marcus Nelson, Ben Parr, Jeff Richards, Andy Ruben, Jim

Rudden, Ben Smith, Aaron Strout, Carmen Taran, Rob Tarkoff, Ed Van Siclen, Mike

Walsh, Sharon Weinbar, Adam Werbach, Susan Williams, Vladimir Mirkovic, Anita

Wong, and the entire Altimeter Group research and consulting team.

We extend special appreciation to LeWeb founder Loic Le Meur who inspired

Altimeter Group to research this topic.

Credits: Research Input

Peter coffee

• If the cloud is only used to modernize IT, that’s all that

will happen – and it will not be enough

• Enormous improvement of connection enables

mobile as the norm; desk work as exception• Mobile access enables in-the-moment inquiry and

action via networks of trusted advisors – some call

them ‘social’

• Machines, as well as people, are connected – and

even machines can be ‘social’ in key behaviors

• Decades of design have focused on documents

• Future of IT is in workflows. We call it “the feed.”

‘Cloud’ Must Mean More Than ‘Cheap IT’

“What You See Is What You Get”?“What You See Is What You Need”

• What you’re doing

• Who else is doing it

• What’s already been done

• What you want to share

• What you want to show

• What you want to ask

Connected Computing Leaves the Desk Behind

• “Desktop metaphor” is 25 years old

• Xerox…

• Apple…

• Microsoft…

…but today,

1/3 of U.S.

adults own

at least one

tablet…

…and usually don’t use it at a desk

It’s Time to Make the Customer the Focus

• 1st-generation computer: enter code with switches• Think about memory and storage

• 1st-gen operating system: “Load my program”

• 2nd-generation computer: command-line window• Think about programs and files

• 2nd-generation OS: “EDIT MY_FILE”

• 3rd-generation computer: desktop metaphor• Think about ‘documents’ like spreadsheets

• 3rd-generation OS: double-click an icon

• It’s time for the next generation

• A platform whose focus is…customers

@jowyang

@PeterCoffee

@apmacmillan

@ScottMagnet