Keynote presentation to MIT's conference, "Democratizing Innovation," 23 February 2013 -- by Peter Coffee, VP & Head of Platform Research, salesforce.com inc.

1. Social Models
and Innovation Ecosystems
Peter Coffee
VP & Head of Platform Research, salesforce.com inc.

2. Safe Harbor
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3. Finally Catching Up With Peter Drucker
• “The typical large organization, twenty years hence, will
be composed largely of specialists who direct and
discipline their own performance through organized
feedback from colleagues and customers.”
• “It will be a knowledge-based organization.”
Peter F. Drucker, in The New Realities
…in 1989
What happened to the future?

4. Old IT Did Not Connect Our Knowledge
• Complex legacy IT portfolios made the simplest data
integrations an overwhelming task
• Cumbersome, brittle integrations demoted end users to
information consumers
• Path of least resistance
then over-emphasized
rear-view mirror views of
historical data – or deep
inspection of recent past
• This is what “IT vendors” are still selling

5. Why ‘Cloud’ Changes Everything Forever
• Since the IBM PC was introduced (Aug.1981 to now)
• Processor speed has risen ~25 per cent per year
• Memory capacity has grown ~40 per cent per year
• Mass storage surging ~50 per cent per year
• Desktop systems are burdened with too much state
• File system technology has not addressed new needs
• Governance falls short of rising demands
Server shipment growth rates:
• Trends redefine “best practice” Server market overall, 2011-2015:
7.1% CAGR (TechNavio)
• Bandwidth expansion: ~45 %/year
• Processor road maps favor shared machines  “One of the key factors contributing to this
market growth is the growing adoption of
• Data centralization  superior governance* cloud computing.”
Servers for cloud hubs, 2011-15:
* Knowingly provocative statement with backup to come 21% CAGR (IDC)

6. Social Bandwidth: More Than Just ‘Sum of the People’
(Arcs Represent Number • Distance of Facebook ‘Friend’ Links)
Pop quiz: where is Beijing?

7. When the Served Community is Social
• Silo Behavior:
– Prospects get content from Marketing
– Buyers negotiate terms with Sales
– Customers raise issues with Support
• Social Behavior:
– Prospects seek insights from customers
– Buyers collaborate on competitor research
– Customers tell the world when they’re not happy
• Organizations need new processes & power models
– Authority to address issues pushed to edge of organization
– Collaborative capability available on demand

8. ‘Digital’  Better, Faster Cheaper Box
‘Social’ &‘Connected’  Blow Up the Box
Medicine: sensor-equipped
patients & homes reduce
office & hospital visits
Education: students
in external settings
learn by practice

9. Cloud Connection 
New Models of Membership and Value
“One automaker’s chief
financial officer told Sun
“More than 4,000
COO Jonathan Schwartz
photographers access
that his company could give
Canon’s portal site, which
a car away for free, if it
was developed using the
could charge a customer
Service Cloud Portal. By
$220 per month for a
providing information in real-
subscription.”
time, we have strengthened
www.zdnet.com/news/sun-puts-java-into-
gear-for-cars/136886 relationships with our
members and have
dramatically improved
customer satisfaction.”
“CE device margins are razor thin, and the Canon Marketing Japan
promise of maintaining an always-on connection
to the customer after the point of sale is mighty
enticing. With a connected device, there are all
kinds of new opportunities to present offers and
services that can generate ongoing monthly
revenue. Simply put, connected devices make
connected customers.”
Richard Schwartz, President and CEO

10. Experience Delivery: a Model, not an App
• Collaborative
process creation &
maintenance
• Best practice
Andrew Leigh. I need to create a new
sharing customer service process for the iPad, can
you guys help?
• Integration with
New process created: iPad Tier 1 Support
feeds and other Process (Goals: Run time, 5 min)
social channels
• Social
Steve Wood. Great – I can help with the
case escalation by linking in the Apple
Escalation Process.
process Varadarajan Rajaram. Yes, I know this
product well – there are a bunch of
management solutions I can build into this process.

11. Environments are Ripe for Re-Invention
Soft displays adaptive to Solo Driver and Driver/Co-pilot modes
urban versus highway, with radically different content delivery
work versus leisure, etc. opportunities and expectations
Integration of
portable devices

12. Whose Knowledge Is It, Anyway?
 Innovation “goes rogue” when:
– Products are open-source and/or
highly configurable/customizable
– Some users have incentive to innovate
– Some innovators have incentive to share
– Diffusion of innovations is inexpensive
 What is the new “intellectual property”?
– Brand equity
– Community loyalty
– Ecosystem diversity and strength

13. What Role for “The Crowd”?
 Sift more dirt, find more gold
– With modern machines/methods, gold mines are
viable at 1 g. Au / ton of ore
– Costs of collecting/sifting the crowdstream
continue to fall
 The oddly opposite models:
– Delphi Method: people with wildly varying knowledge, exposed to each other’s
opinions, produce consensus surpassing the sum of the parts
– Open-Source Method: Individual contributions, appropriately incented (if only with
ego rewards), yield cost-effective combined results
 Can the crowd survive its success?
– “Even mild social influence can undermine the wisdom of crowd effect.”
Proceedings of the National Academy of Sciences, 16 May 2011
wired.com/wiredscience/2011/05/wisdom-of-crowds-decline
– Vital elements: diversity, independence,
decentralization, aggregation

14. The IntellectualProperty Impact of InternetProtocol Transformation
http://imgs.xkcd.com/comics/crowdsourcing.png
What is your value-add?
What is the barrier to competitor entry?
What is the distinctive competence?
What is the defensible intellectual property?
What is the basis of brand equity?
What is the motivation for customer loyalty?
What is the actual product being bought?*
* Hint: it’s rarely what you think you sell

15. The Value of Velocity
Legacy Stack-Based Process – Wherever It Is
Install & Write Deploy & Monitor Patch and
Configure Load & Tune Regression
Code
Stack Test Test
You Your
App
Average time to build a custom app with software is 8 months.
IDC White Paper sponsored by Salesforce.com: “Force.com Cloud Platform Drives Huge Time to Market and Cost Savings”, Doc # 219965, September, 2009
By late 2009, Qualcomm/Android cycle time had dropped to 4.5 months.
Computerworld, “Is 'Quadroid' the new 'Wintel'?,” 2 December 2010

16. The Value of Velocity
One developer with no prior
Force.com training built a patient
admission app in just 4 days
Deployed to Medical Directors and
Program Directors in hospitals on
iPhones and iPads
• Eliminated paper forms;
• Workflow reduced response time
by more than 60%;
“We’re blown away…a mobile healthcare
app on Force.com with one person in just 4 • Cut process time from 18 hours
days… The same app built in [previous
to less than 60 minutes
models] would have taken over 3 months”

17. Trust Attainment Enables Cloud Adoption
• Robust infrastructure security
• Rigorous operational security
• Granular customer controls
– Role-based privilege sets
– Convenient access control & audit
• “Sum of all fears” scrutiny
– Multi-tenancy shrinks attack surface; slashes opportunities for error
– The most demanding customer sets the bar
– PCI DSS Compliance Level 1; FIPS 199 LOW and MODERATE
– Comprehensive, continuing audit/certification

18. All Assets Secured, All the Time
“Despite resource sharing,
multitenancy will often improve
security…
“Our research and analysis indicates
that multitenancy is not a less secure
model — quite the opposite!”

19. Nothing Happens Overnight; Nothing Goes Away
’50s ’60s ’70s ’80s ’90s ’00s
Windows
IBM PC Windows XP
PC MITS Altair 3.x/9x/NT
Macintosh & Mac OS X
& Linux 1.0
DEC DEC Sun Sun/AMD
Sun/ILM
Mini Workstations x86 Servers
PDP-8 VAX 11/780 Render Farms
& Servers Niagara CPUs
Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries

20. ’50s ’60s ’70s ’80s ’90s ’00s-’10s
Clouds +
Grid
Edge X Window
Computing
Devices
Windows
IBM PC Windows XP/7/8
PC MITS Altair 3.x/9x/NT
Macintosh Mac OS X
& Linux 1.0
DEC DEC
Sun Sun/ILM
Sun/AMD
Mini Workstations x86 Servers
PDP-8 VAX 11/780 Render Farms
& Servers Niagara CPUs
Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries

21. This is No Way to Get to the Cloud

22. The Framework: Data, Process, Collaboration
• Scalable, secure, socially enabled multi-tenant database
• Proven services to build rich, attractive, ‘anywhere’ apps
• Secure collaboration with any IT asset or process –
person, application, or machine
Chatter
Force.com
Database.com

23. The Plug-Ins: Content, Scalability, Integration
• Build, run, and scale a world-class website with site.com:
integrated with database and customer social profile
• Agile deployment on Heroku for Ruby, Node.js, Clojure,
Java, Python, and Scala: run anything, see everything
• Collaboration in sales, service, and marketing processes
Chatter
Force.com Site.com Heroku Communities
Database.com

24. It Only Matters If It Integrates – Securely
• Bring in the information that matters most: what your
customers and partners are doing, and what they want
• Connect it with the information you already own: all of
your legacy assets become more valuable in more ways
Any Social
Network Chatter Back-end Systems
Force.com Site.com Heroku Communities AppExchange Apps Any System
ERP Finance
Database.com

25. It’s About the Corollaries
The bad news is that this is a truly
intense technical and business
undertaking, and not for the faint of Any technology distinguishable from
heart.
magic is insufficiently advanced.
The good news is that what it makes Gehm's Corollary to Clarke's Third Law
possible is magical.
Marc Andreessen,
“The Three Kinds of Platforms You Meet on the Internet”
Web 1.0: Discover
Web 2.0: Collaborate
Web 3.0: Innovate

26. Thank You
petercoffee
linkedin.com/in/petercoffee
f facebook.com/peter.coffee
pcoffee@salesforce.com