The archive · Business Models · Strategic decision · 1999–2005
Salesforce (2000): CRM rented for ~$50/user/month in the browser — 'End of Software'
Salesforce made renting CRM the whole pitch: browser access, no installs, ~$50/user/month — marketed as 'The End of Software'.
Salesforce.com
What it had to solve
When Salesforce launched in early 2000, business software meant licenses: buy it, install it, run it on your own machines. CRM leader Siebel sold expensive client-server systems aimed at large companies, so Salesforce aimed at small and midsize businesses with a service accessed purely through a browser.
How it works
Salesforce.com, founded in March 1999 by former Oracle executive Marc Benioff, launched in February 2000 as a strictly online service: sales teams tracked leads, accounts and reports through a browser for about $50 a month for the first five users and $50 per additional user. Its motto was 'The end of software.'
The contrast was deliberate. CRM leader Siebel sold client-server software that ran on desktop computers, and analyst firm AMR Research projected the market would reach $16.8 billion by 2003. Salesforce's bet was that simplicity and low cost would trump the complexity of installed systems — and that companies were ready to shift from buying software to renting it.
Customers were not required to install software or add hardware; the entire application lived on Salesforce's servers and was reached through a web browser. By mid-2000 the service had roughly 10,000 clients, including sales teams at Siemens and Red Hat, and had signed its first major distribution deal with IBM. That model would come to be called Software as a Service, and Salesforce's own history now credits the company with pioneering it.
The idea was a pricing and delivery decision first, a product decision second: instead of competing on features with an entrenched incumbent, Salesforce competed on how software was bought, accessed and paid for.
Why it lands
- Monthly per-user pricing turned a huge upfront license into a small recurring fee, opening CRM to small and midsize businesses.
- No installs and no hardware removed the IT project, so a sales team could start using the product almost immediately.
- Making 'The End of Software' the brand turned a pricing choice into a public argument against the incumbents.
- A browser-only delivery model let one shared platform serve thousands of customers at once — a structure the whole industry later copied.
What it did
By mid-2000 the service had roughly 10,000 clients, including sales teams at Siemens and Red Hat, plus an IBM distribution deal. The subscription, browser-delivered model — later named Software as a Service — became the default way business software is bought, and Salesforce's own history credits it with pioneering SaaS.
What you can take
Attack the delivery model, not just the feature set: by renting software instead of selling it, Salesforce changed who could afford CRM and made the subscription itself the message.
Since then
Salesforce grew from the 2000 launch into the CRM category leader: IDC first ranked it #1 in CRM by market share in 2012, a position it has held since. The subscription, browser-delivered model it named Software as a Service became the standard for business software across the industry. Its founders' 1-1-1 philanthropy model — 1% of equity, product and employee time — became the Pledge 1% movement, adopted by more than 18,000 companies.
Sources
- Salesforce.com launch presages Siebel rivalry
- Oracle, rival at odds in services battle
- We're Salesforce, the #1 Agentic CRM
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