InStranet went through its third round of funding way back in 2001, when it raised $14.7 million at a $50 million valuation in a round joined by Benchmark Capital. So it's not a huge exit. Then again, at least it's an exit. Salesforce.com will also report its second quarter earnings today. Analysts expect $260.56 million in revenues for a 47.6 percent year over year growth.

Next: VMware cofounder Diane Greene: Her only mistake was working for another tyrant

(Photo by AP/Margot)

From: Matthew Greeley

Sent: Wednesday, June 04, 2008 6:04 PM

To: BI_MAILALL

Subject: Salesfarce Waddles into the Innovation Management Market...

Dear BI Team,

This week, Salesforce.com began their push in earnest, to cut into our market share of the On-Demand Innovation Management market, including running print ads in the Wall Street Journal and BusinessWeek. This comes as no surprise to our executive team, as our internal intelligence group has been expecting this since mid 2007.

We've also heard that salesfarce ground troops are requesting conversations and sit downs around “Collaboration Initiatives”, at several of our clients. They may be in for a surprise when they get there and learn we have already locked-in multi-year subscription deals, negotiated enterprise licensing and that our customers actually like us.

Salesfarce, is not the juggernaut it once was, as a few recent developments point out:

- Their ex-Chief Strategy Officer Tien Tzuo, aka "Benioff's Brain" resurfaced this week as the CEO a new start-up (Zuora). Tzuo is largely credited as the marketing genius behind much of sfdc’s growth and past success.

- On the Q1 conference call, they announced Differed Revenue was down sequentially for the first time in company history. This single metric is strongest leading indicator about the future of a subscription business. (By contrast our diff revs grew over 50% during the same period).

- Their Innovation Management solution is a set of generic project management widgets cobbled together to try to cover the areas our best-of-breed products address. These widgets have no interaction, and the design is based on little or no knowledge about the actual process of innovation. Even if they get it to work at some point, they are skating to where the puck was, instead where it's going to be.

You can expect their uber-slick sales force (pun intended) will be quick to brew up some ugly batches of fear, uncertainty and doubt about BI. In fact, we already have reports of them making false claims about us in the marketplace. This is the classic tactic of a company that has gotten too big for their own good. Covering up an inability to innovate by intimidating customers spending more on marketing.

Fortunately, for us, our customers are innovators themselves, and the ability to see things as they really are, often comes with the job title.

Please let your clients know that we welcome a side by side comparison. Our products are NOT apples to apples. This month I have heard feedback — literally from around the globe — that WebStorm 5 is the most advanced tool of its kind available today. Our outsourced datacenters deliver the same standard SAS70 Type II reliability and disaster recovery at a third a cost of their proprietary systems, and we have more customers, more deployments, more revenue and faster growth in this category than any other vendor.

Salesfarce has gotten fat and happy with their past success in SaaS, and like any over-reaching empire, they have eroded from within. Their twilight has come. I believe a slight nudge is all that will be necessary to send this rotted shell of a business —devoid of the virtue of true innovation— crashing into the ground.

I hope you will join me in delivering that nudge over the coming months,

Matt

________________________________________________________

Matt Greeley

President & CEO

Brightidea.com :: Powering Ideas to Reality™

www.brightidea.com

Out of this thin straw, Google is spinning a golden tale of a low-cost entry into the enterprise market, and Salesforce.com a move against Microsoft, which has been touting the integration of its rival business-software suite, Dynamics, with Microsoft Office.

Salesforce.com CEO Marc Benioff is honest in his own way about matters. "The enemy of my enemy is my friend, so that makes Google my best friend," Benioff told the New York Times. A Microsoft executive countered with the meaningless Valley bromide, uttered whenever a rival emerges: "It validates our strategy." He would have done better if he had simply laughed.

That's why Zoho has branched out into online customer-relationship management software, the exact same service Marc Benioff's Salesforce.com provides to automate sales. Benioff made an unspecified offer to buy Zoho from Vembu, who refused. A geeky, bespectacled sort capable of withstanding Benioff's charm campaign? That's how I'm going to remember Vembu.

It would also be a brutal comeuppance for Salesforce.com CEO Marc Benioff, who had a very public tiff with Ellison, for whom he worked at Oracle and once idolized. Benioff has since championed a "no software" marketing campaign aimed straight at Oracle; unlike Oracle's offerings, Salesforce.com does not require the installation of software. Selling to Oracle would require eating a lot of crow. Then again, if Benioff actually gets that price, it would cement his reputation as a consummate salesman. Perhaps that's worth an uncomfortable swallow. (Photo by Robert Scoble)

The evidence is a little shaky. In its article, our reader targets a Silicon Valley figure because AD calls Hawaii the "the Hamptons of the Silicon Valley (instead of potato fields, there's lava)." From there, it was a matter of a Google search for the architect's firm, "Hill Glazier Architects." That turned up a building permit for a $3.7 million home listing both Fluegel and Hill Glazier, a Palo Alto firm.

So there you have it. Another key detail: the lady of the household is Puerto-Rican born, according to the home's interior designer. Anyone know if Fluegel's wife fits that description? Not that it matters. Whoever owns the house joins the likes of Salesforce.com CEO Marc Benioff, retired Hewlett-Packard CFO Bob Wayman, and former HP chairwoman Patricia Dunn. If Hawaii is the Hamptons of Silicon Valley, the point isn't who owns this house. It's that you don't.

Disruptor 1: Netvibes (Custom web portal)
Hero (pictured here not knowing he'll be Photoshopped to look silly): Founder Tariq Krim
B2 says: "Netvibes currently doesn't accept typical Web ads — the kind Krim denounces as 'Advertising 1.0, in your face.'" Instead he gets "sponsors."
B2 means: "Netvibes took $15 million in funding. It doesn't have income, just pointless deals that get media attention until a conglomerate buys the company."
Netvibes competitors B2 doesn't mention: Goowy, mobileGlu, Pageflakes, Protopage, Start, and over 30 others

Disruptor 2: Salesforce.com (Customer resource management/application platform provider)
Hero: CEO Marc Benioff
B2 says: "It's true that Benioff is known throughout the tech business for his bombast, and he's always predicting that Salesforce is about to do something amazing. But he's not all talk."
B2 means: "Benioff is about to launch a product update that will bring his company up to speed with competitors Microsoft and Oracle. Yawn."
Favorite Benioff quote: "We will destroy Oracle and SAP because they won't be able to respond to the innovation we are about to unleash."

Disruptor 3: Clearwire (Wi-Max broadband wireless provider)
Hero: Founder Craig McCaw
Actually, this guy's story checks out as far as I know — real business plan, real success. Feel free to correct me in the comments.

Disruptor 4: Zopa (Person-to-person loans)
Hero: The business model
B2 says: "Zopa is closing that gap by using the Web to allow personal lending on a massive scale. The startup was the first company to introduce peer-to-peer lending in the United Kingdom 18 months ago and is about to launch in America."
B2 means: "In America, Zopa will compete with Prosper, a personal lending site that already has a head start and funding from the same venture capital firm."
Proper term for Bessemer Venture Partners, investor in Zopa and Prosper: Player

The Disruptors [Business 2.0]