Game Changer

CHAPTER 15As‐a‐Service: Growing with Your Customer

With contributions from John Pineda, Matthew Kropp, and Steven Greene

In the 1990s, as digitalization started to revolutionize business, an idea about the nature of software progressively emerged. Why couldn't it be an easy‐to‐consume, constantly evolving digital capability, instead of a static piece of code licensed in perpetuity like a physical product? In other words, couldn't companies sell software as a service, like electricity or gas?

Companies usually sold customer relationship management (CRM) software, for example, as part of larger enterprise resource planning solutions that required expensive up‐front investments, long and complex on‐premise implementations, and large IT teams to maintain and upgrade it. This was a prototypical Custom Game, as buyers negotiated custom deals at very high discounts to purchase perpetual licenses from companies such as SAP or Oracle.

This cumbersome business frustrated Marc Benioff, an executive who had spent 13 years at Oracle. In his mind, business applications such as CRM should be “as easy to use as a website.”¹ To implement this vision, he founded Salesforce.com in 1999 to allow companies to subscribe to their CRM on a per‐user basis and pay per month. In just under three years, his fledgling company gained over 3,000 customers and brought in $22 million in revenue.²

Software ...