Well, I’m back from the Valley. Attended the Salesforce.com Developer Conference and got to see their CEO, Marc Benioff speak for the first time. The keynote was a 2 hour affair, with some demos, especially around Flex, custom objects, and other enhancements that make Salesforce appear like a platform. There were demos also from AppExchange partners, including one from Canada, CRMfusion. It then ended with a talk by Guy Kawasaki, on the Art of the Start. I’ve seen Guy speak before, and he always puts on a good show. I have to admit, I think I’ve seen a similar presentation from him. It’s all good, as he’s pretty smart and has great experiences to illustrate his points. Including his ultimate Bozo example - himself. He turned down the CEO post at Yahoo in the early days and figures he left $2 billion on the table because he didn’t see how he could succeed, let alone make money. The moral to his story, is to not to listen to the naysayers. I’ve been a Bozo on more than one occasion myself, seeing companies that looked like they didn’t have a competitive advantage, or a solid business model, succeed. He ended his talk with a little pitch for iStockphoto and Canada, on what a great model it had.

An interesting rumor came from Marc himself. He kept saying he couldn’t talk about Google, because there was something pending, which could mean anything. His company did pioneer SaaS and Web 2.0 as exemplified by Google is all about SaaS, so maybe there’s something on that front. He joked about the fact that the enemy of his enemy (Microsoft), is his friend (Google). There has been talk on the Internet about ‘GoogleForce’, whereby Salesforce and Google would merge. I don’t see how that would make sense, but what do I know - I’m a Bozo too.

There was more to the conference that I will cover in another post. One last thing though. It appears that the four guys that started Salesforce, are still with the company in various capacities - that speaks well for the company, after 8 years and 30,000 customers.

Microsoft announced today that they are buying aQuantive Inc. for $6 billion in cash. As I had mentioned in FoundPages’ Online Marketing Blog, Bill Gates has publicly stated that his remaining time at Microsoft will be spent on moving Microsoft into online advertising. It looks like he doesn’t want to waste any of his 12-18 months and opened the $50 billion check book.

What’s surprising is the purchase price. $6 billion is a lot of money, even for MS. And at 13.5 times revenue, they’re paying a huge premium for a company that generates much of its revenue in services. According to reports, it’s a startling 85% premium over the current trading price of aQuantive. Did they pay too much? Only time will tell. But what we do know from this, is Gates and Microsoft is getting hard-core about online ads and search, just as they did in 1996 about the Internet.

Granted, aQuantive is a well-managed company is 2600 employees and with a profit margin of 12.2%, but I’m pretty sure MS isn’t buying it for the $54 million in profit. Sure, aQuantive is close to Redmond, being based in Seattle, but is that going to good or bad?

Times are changing fast in the advertising and marketing world. With Google and Microsoft focused on advertising, I’d be worried if I were a newspaper, magazine, TV station, or the yellow pages etc. They won’t go away, but it’s going to hurt with the biggest players in online software in their market.

For valuation newbies, 2-3 times revenue is already considered very good for a services company. And a 15-20% premium to buy a public company is usually enough to sway the board, especially if it’s in cash. So the premium Microsoft is willing to pay, is an indication of their determination, AND the aQuantive’s board view of their value. All the online advertising and services companies out there should be thrilled to see this announcement.

It’s road trip time next week. Headed to San Francisco and Silicon Valley to meet with the movers and shakers in software, technology and venture capital. For me, it’s like going home, because I grew up in SF, or the City as it’s called down there. It’s always fun for me on all fronts, because it has many of the things I enjoy the most: friends, family, food, tech, and deals.

In fact, I’m ready to put on a few pounds because there is absolutely nothing like the restaurants in SF in my travels throughout North America that I have found.

For obvious reasons, I’m not at liberty to divulge who I’m meeting with but suffice to say, it has to do with the ActiveConversion web service that we’ve built. And for obviously biased reasons, we’re pretty excited about the possibilities. It’s a SaaS marketing service that helps companies identify and followup leads for B2Bs. It is mashed up with Salesforce, Jigsaw, and Google, to produce sales intelligence that can then be routed to sales for followup and close. It’s something whose time has come, and we think it will change the way B2B sales and marketing is done, by making it a lot more efficient and easier, just as Google made advertising efficient (and affordable).

I’m also down there for the Salesforce Developer Conference. It’s my first one, and I’m looking forward to seeing what Salesforce’s plans are for their large developer community. Besides being a natural hookup for our product, Salesforce.com has proven to be a leader in the enterprise SaaS space, so we like to keep up on what they’re planning.

They are also leading edge in the way they market, using online marketing and Web 2.0 everything. We’re sponsoring an event with the CalgaryCMA on May 30, with a Salesforce.com VP as the guest speaker later this month, if you’re interested in their strategies.
I can’t help but admire their rise from SaaS startup to challenging the established large software vendors such as Oracle, SAP, Siebel (now Oracle), Microsoft for market supremacy in CRM and ERP.

I’ll provide an update on their conference when I get back.

In a an earlier post, I defined Web 2.0 as being collaborative. Now I’m going to define my version of SaaS, and attempt to tie it together with Web 2.0.

SaaS is ‘Software as a Service’, and it is starting to take shape as a means by which applications can be delivered to users. Instead of loading software onto your server or desktop, you use your browser to access the application, which is hosted somewhere else. Usually the service is charged monthly, instead of a one-time license fee (+ updates) by most traditional software companies. Salesforce.com is probably one of the best known for this, as they started in 1998, fittingly with the slogan ‘NO Software’. Back in those days, everyone thought they were crazy because who would:

• Let their customer data reside somewhere besides their own servers?
• Rely on the Internet to get at their data?
• Want to get less features than what they already had?
• Want to pay monthly, when they could pay once?

Turns out 27,000 companies did, as that many are currently Salesforce.com customers today. Let me venture some reasons:

• Security is no longer concern (we trust the Internet with our banking don’t we?)
• The downtime and speed of the Internet, is not much different from an internal network.
• There are MORE features than what they had.
• There is no difference in price, when you factor in updates.

I was a bit of a skeptic back then too, although I could see some reasons for it:

• Less deployment time, especially for remote offices.
• Less IT involvement and updating required.
• You could pay only for what you used.

There are probably a dozen more good reasons, but there a couple of really good reasons now. Mashups and immediacy. SaaS allows an organization to hookup other applications easily. It also can be used immediately. We call it low friction to implementation. Something many IT departments don’t get, which is why SaaS is so popular. By that I mean, do you want your app now, or 6 month from now?

So what does it have to do with Web 2.0? In Web 2.0, SaaS is pretty much assumed. I know I do, but many of my IT friends don’t. Microsoft doesn’t really, or want to, which is why they are playing catchup to Google.

There’s a half day seminar coming up May 15 in Calgary, entitled Win the War on Business. Positioned as a bootcamp for business strategy, it’s being put on by some smart and experienced sales and marketing guys that I know. Brian Pleet, Craig Elias and Rob Schmidt. The idea is to use military type leadership, planning and execution to make your business better.

James Istvanffy of Stratagem Solutions is leading it off with the theme, ‘Think Like a General, Act Like a Warrior’. James spent a lot of his time in the military, and has taught leadership to business, military and political leaders.

I’m a keen follower of military strategy and execution (and ‘The Unit’ :-). The concept of approaching a business like a war resonates with me. Not so much because the competition is an enemy, but because the strategy and the tactics needed to succeed is common. A successful business finds a way create strategies, outmaneuver their competitors, and lead their team to execute the plan. Marketing is the strategy, and sales is the tactical execution.

A common phrase used 10 years ago in sales was ‘force multiplier’. It’s a military term to describe when you find a situation that you need capitalize on, to put additional resources on it to make sure you got it. In sales, that means to get all your people on it to win the contract. It almost always worked.

It’s being held at the Mewata Armory to have that military theme. I’ve been there, so I can tell you it’s old but quite impressive inside. I’ll be there because ActiveConversion is a sponsor, with our ‘Marketing Intelligence for Sales‘ theme. Yet another innovative way to learn and network, so get more details at www.wtwob.com.