Marc Benioff says he is no longer the wild man of the technology business. The chief executive of Salesforce.com has staged extravagant parties, managed to offend the Dalai Lama, regularly trashed his competitors, and had his company’s IPO delayed last year for violating the U.S. Securities and Exchange Commission’s “quiet period” rules.

Today, he says he is a wiser, more mature person. “I’m not 22 anymore, you know,” says Mr. Benioff, 40. This summer, he delayed an interview with Red Herring until he had issued his second-quarter earnings report. A large man with a salesman’s relentless optimism, Mr. Benioff has come a long way from his days as a rambunctious young executive at Oracle, where he spent 13 years as a sometime protégé of Oracle CEO Larry Ellison, another larger-than-life Silicon Valley executive.

Mr. Benioff now holds the reins of a company that debuted on the Nasdaq with a $126.5-million public offering in June 2004 and had a recent market value of $2.1 billion. The stock traded in late August at $19.86, off from a 52-week high of $25.15.

Salesforce, which offers an application to manage customer information over the Internet, is a leading proponent of the “on-demand” model that could be both a hope and a threat to the enterprise software sector, which has struggled with slow growth over the last five years (see “Is Enterprise Software Really Dead?” p. 26). His company has managed to grow quickly right through the post-tech bubble recession. Launched in 1999, Salesforce has acquired more than 300,000 customers. Annual revenues have more than tripled since 2003 to $176 million in fiscal 2005.

And Mr. Benioff isn’t slowing down. He has launched an ambitious plan to turn Salesforce’s technology into a “platform” that software developers can use to create their own applications and go well beyond his core customer relationship management (CRM) product. Multiforce is an effort to tap a large potential market of vendors or developers who don’t have the tools or the means to build and maintain the complex infrastructure of enterprise applications, says Mr. Benioff. In return, Salesforce gets the additional users as subscribers to its service.

“Mr. Benioff wants to take the company to the next level,” says Laurie McCabe, an analyst with New York City-based market research firm AMI-Partners. “He wanted to dominate at the CRM level and has done a phenomenal job. Now, it’s about ‘How do we extend beyond CRM?’” With a base of more than 8,000 corporate and independent software developers and 150 independent software vendors, the company is already on its way to creating an ecosystem of partners that could make Mr. Benioff’s platform ambition a success.

“Salesforce’s greater opportunity and greater challenge [is to] establish its technologies as the de facto SaaS [Software as a Service] operating environment—the Microsoft Windows, if you will—of the on-demand world,” says Tom Kucharvy, president of research firm Summit Strategies in Boston.

Mr. Benioff is not shy about taking on the world’s No. 1 software company. He dismisses Microsoft’s own CRM application, which was developed in-house and launched in 2003. “Their first version of CRM came out three years ago and they still don’t have version two,” he says. Microsoft, however, says it released one update in December 2003 and will introduce the next version in the fourth quarter of this year.

In his standard sales pitch, Mr. Benioff is no kinder to former Oracle colleagues like Tom Siebel, CEO of Siebel Systems, or his former boss Mr. Ellison. He once ran an ad showing a schoolboy writing on a chalkboard, “I will not give my lunch money to Siebel.”

However, Mr. Benioff must also overcome some serious challenges to his plan for world domination. His competitors—SAP, Siebel, and Oracle—have all announced or introduced Internet-based versions of their software. Recent reports from Gartner Research and Nucleus Research have also questioned whether Salesforce’s software can scale up to the tens of thousands of users that large corporations deploy. And Mr. Benioff’s battle cry of “No Software” means Salesforce must invest heavily in hardware to host his applications and the ever-increasing data flow from his customers.

Mellowed or not, Mr. Benioff has not lost any of his flamboyance in a period where Silicon Valley companies have grown more conservative and low-key. At the Multiforce launch in June, some 800 customers, analysts, and media packed JustinHermanPlaza on San Francisco’s Embarcadero waterfront. The event included a speech by San Francisco’s Hollywood-handsome mayor Gavin Newsom, music by a Beach Boys cover band, and Salesforce employees in Hawaiian shirts tossing around colorful beach balls.

Mr. Benioff might argue that this is his new laid-back persona. A supporter of the Free Tibet movement, he sponsored a 2002 concert at Carnegie Hall in New York City that featured Patti Smith, Lou Reed, and Tibetan throat singers and threw a party by renting out the now-defunct Russian Tea Room, an extravagantly rococo favorite of movie stars and Broadway actors. It was his association with Tibet that led to his using the Dalai Lama’s image in a poster promoting an evening with the Tibetan holy figure. The poster tied in Mr. Benioff’s attack on traditional software with the slogan, “There is no software on the path to enlightenment,” above a picture of a praying Dalai Lama. Mr. Benioff later apologized.

Tibet is just one of his philanthropic causes. Mr. Benioff commits 1 percent of his equity and profits to nonprofit activities, and he has created a Salesforce Foundation that had $12 million in assets last year. All employees can spend six workdays a year of company time volunteering for nonprofit organizations. “Google [has] adopted our 1 percent model,” he boasts. “And we just got a phone call from Palm and their CEO asked us to come and explain to them how we do ‘compassionate capitalism’”—the title of a book that Mr. Benioff wrote.

Big Ambitions

Despite his softer side, Mr. Benioff remains the relentless salesman, turning every interview question into a sales pitch. He often starts answers with “Red Herring could benefit from Salesforce.com….”

A fourth-generation San Franciscan on both sides, he was raised in entrepreneurship; his family owned Benioff’s Department Store in the city. At suburban BurlingameHigh School, he got interested in programming and started a software company with classmate Steve Fisher, who now works at Salesforce. Mr. Benioff earned a B.S. in Business Administration at the University of Southern California and interned as a programmer at Apple Computer before joining Oracle.

He has focused on the importance of the customer since his undergraduate days, says Tom O’Malia, who taught Mr. Benioff in an entrepreneurship class at USC. “He had a very strong presence, that of a politician,” recalls Mr. O’Malia, adding that he had a great influence on his peers.

Mr. Benioff’s salesmanship will be in full flower at his company’s Dreamforce user and developer conference in September. One goal will be to convince software vendors, developers, and venture capitalists to embrace Salesforce’s Multiforce platform strategy.

Traditionally, companies bought expensively packaged CRM software that they hosted on their own servers, which often took months to deploy. Mr. Benioff conquered the online CRM market by offering customers an inexpensive alternative: He gave them access to equivalent software via their web browsers for as little as $65 a month per user, and hosted both the application and customer data on his own data centers.

His company ranks No.1 in the on-demand space but a distant No. 12 in overall sales of CRM products. In 2004, SAP ranked first in the CRM market with 15 percent of total revenue, followed by Siebel with 12 percent. The worldwide CRM market stood at $4.04 billion in 2004, up almost 8 percent from $3.75 billion in 2003, according to AMR Research.

But after rising to the top in the on-demand CRM market, Salesforce has no intention of stopping. This is where Mr. Benioff’s great ambition of being the Microsoft of on-demand software kicks in.

“Six months ago, people [asked] us, ‘what is Salesforce going to do next?’” says Phil Robinson, Salesforce’s senior vice president of global marketing. “What we’re going to do is build a platform on which other people can build the applications they want.”

The company will also introduce a catalogue of applications on Multiforce—a sort of eBay for application software—in addition to tools and features that will make it easier for developers to build applications.

Competitors say that Mr. Benioff has to increase his value proposition as other companies enter the on-demand arena. “The place where Salesforce is going to fall down with the entire platform discussion is the fact that there is no real data of value held on Salesforce,” says Zach Nelson, CEO of competitor NetSuite, which also offers applications via the Internet. “Who wants to build an application on data that is only about prospects or contacts?”

The next big test for Mr. Benioff will be selling Salesforce as a platform and eroding the dominance of the Windows operating system, says AMI-Partners’ Ms. McCabe. “It’s a pretty big aspiration for anybody to have.”

Mr. Benioff is well aware of what he has to do. “We’re going to get out and evangelize this platform just like every other platform company has done,” he says. “We are going to do seminars and we’re going to go to Shanghai and Bangalore and say, ‘if you have an Internet connection, you can build an application on our platform and sell it to one of your customers.’”

Don’t Forget the Big Boys

Mr. Benioff needs to worry about the push into the on-demand space by big competitors like SAP, Oracle, Microsoft, and IBM, as well as smaller ones like Netsuite. While SAP is busy promoting its NetWeaver platform, Oracle has Fusion, Microsoft has .Net, and IBM has WebSphere—all of which could be used to create on-demand applications similar to Salesforce’s, says Ms. McCabe.

Some also question the robustness of the online model in large enterprises. A report by Nucleus Research says that 93 percent of Salesforce customers had fewer than 500 users and that 38 percent of its customers were open to switching to another solution. In response, Mr. Benioff points to a recent win: 5,500 users at Merrill Lynch. He insists there are no limitations to scaling up his service.

There is one thing, however, that Mr. Benioff is afraid of. “I’m worried about how [to] show people that this isn’t just about CRM, that this is about the Internet,” he says.

Indeed, Mr. Benioff’s biggest challenge lies in convincing customers that his online model can do everything they need for their business. He will need more than youthful exuberance—or the maturity he now professes—to accomplish that.