Sramana Mitra: I’m going to ask you something based on what we just talked about with your background as the head of platforms at Salesforce.com. My assessment is that there are probably a couple of hundred SaaS companies at this point that are doing upwards of $50 million in annual revenue.
Which of those do you see as good candidates for doing the platform strategy that made Salesforce.com so successful? Because very often, these companies are leaders with one product and then they have built the channel to reach those customers and so forth.
One of the easiest and best ways to expand that would be to get all the adjacencies and get products in the adjacencies. Now, it’s not easy for SaaS companies to integrate random products that are on different specs.
Can you comment on this whole phenomenon that’s going on there? I’m going to tie this into your investment strategy in a moment.
Matt Holleran: All cloud companies that are building and solving an important problem are owning an important title and businesses around the world.
Their fundamental strategies should always be for them to go market, sell, and acquire customers on their own. In addition to that, there are certain categories of companies that should work with a Salesforce.com App Exchange or the marketplaces that you see in all of the other cloud companies.
Sramana Mitra: I think you misunderstood my question. Salesforce.com did its own platform and the App Exchange around that platform. I’m asking the question whether these companies that have reached a certain amount of critical mass that have a channel and a customer base should be doing that platform strategy.
They should be having their own platforms and building an ecosystem around that platform to address some of the adjacencies to their product line.
Matt Holleran: Yes. In most cases, the answer is correct. Are you asking, should I be building on Amazon or Azure, or are you saying their own data centers. I think you’re saying some external third party platform, correct?
Sramana Mitra: I think the data center matters less. I think it’s more the API’s and something that will allow entrepreneurs to build on their stack.
Matt Holleran: I understand. From an API viewpoint, it’s a necessity. It’s really important for any cloud business application company. For your customers that are using Salesforce.com or using Workday, Oracle, or other cloud companies, it makes sense to build the right integration and to leverage those marketplaces.
Choosing to build on a platform is a really important decision. In some cases, it’s absolutely the right answer to build on Salesforce.com’s platform or on other ISV companies that also have a platform like Google. In some cases, it isn’t. That’s something you really want to think carefully about as you’re starting these businesses and often work with people who can help you to make that decision.
Unfortunately, having started the Salesforce App Exchange and the Salesforce platform ISV ecosystem, this is something we’ve been thinking about for a long time and we’re able to assist entrepreneurs to make those calls.