Marc Benioff is like the Austin Powers of the technology business: a lovable and self-assured anachronism. He dresses in Hawaiian shirts, practices yoga and takes his golden retriever to work, as if the dot-com days had never ended.

His company is just as anachronistic. It still calls itself Its 267 employees are encouraged to take time off each week to fight the digital divide, a cause that fell out of vogue with exposed-brick office walls.

The walls in's Embarcadero office? Exposed brick.

Yet Benioff says the company -- which sells software for salespeople -- is actually benefiting from the post-dot-com austerity. Analysts agree that as its larger competitors struggle with the corporate spending downturn, this is a moment of opportunity for

Benioff, 37, left a 13-year Oracle career to found in 1999 with a team of software developers, some of the millions he'd earned at Oracle, and a $2 million investment from his friend and former boss, Larry Ellison.

The company sells customer relationship management software that helps salespeople keep track of prospects and sales, and it plans to add more features until the software is comparable with products from Siebel, SAP and PeopleSoft, which companies use to automate everything from billing customers to issuing paychecks.

But's customers don't pay hefty up-front license fees, as their rivals' customers do. Instead, they pay by the month to access the software over the Web.

"For all of you who can't get Siebel running, or who could never afford it, we are Siebel for you," Benioff said.

Sound like a man on a crusade? That's Benioff, whether he's talking about the boring-to-most-people subject of customer relationship management software, his company's pledge to donate 1 percent of its profit to charity, or his passion for swimming with dolphins near his vacation home on the Big Island of Hawaii.

He comes by his fixation on San Mateo's Siebel Systems honestly -- he replaced Tom Siebel when Siebel left Oracle, and was an early investor in that company, although he has since sold his shares. is cheaper than Siebel. The Orinda Internet firm Intraware replaced its Siebel software with's in November, when the dot-com crash shrank its salesforce from 130 to 30 people. Now, the company pays a quarter of what it once paid per person to use Siebel, according to Senior Vice President of Sales Norm Pensky.

Not coincidentally, Benioff says, Siebel's sales plummeted 28 percent in the most-recent quarter compared with a year ago, and's sales more than doubled in its most-recent quarter from $5 million last year to $13. 5 million this year. Because it's a private company,'s numbers are not audited.


If it sounds like is pushing Siebel to the brink of bankruptcy, that's Benioff's marketing mania talking. (His sales prowess won him the title "Rookie of the Year" at Oracle back in 1987.) Siebel is still profitable, while has yet to record a profit, although it expects to by fall.

For now, there is a big difference between's product and its higher-cost competitive targets. Banc of America Securities analyst Bob Austrian called's software a Toyota Camry to Siebel's Lexus. Austrian doesn't own Siebel shares; BofA has done banking for Siebel in the past. But analysts allow that there is truth to Benioff's assertion that the spending slump is helping him while hurting Siebel.

"('s) licensing model is right in step with these economic times. It's a lower-cost approach," Forrester Analyst Bob Chatham said.

But as it fights to bring about "the end of software," as Benioff calls it, will face growing competition both from bigger companies like Siebel, Oracle and Microsoft, and from other startups like Mountain View's UpShot Corp. So far, the big guys have only dabbled in hosted software, but that won't last, Chatham warned.

Before it can truly compete with the big boys, has some growing up to do, said Ray Lane, former president and chief operating officer of Oracle. Benioff reported to Lane during part of his Oracle career, before being promoted to report directly to Ellison.

"Right now, they exist on a lot of small companies that can't afford to buy Siebel or Oracle," Lane said.'s largest customer has just 800 people using it, while Siebel customers often have many more users.


Benioff, at 6 foot 5, is one of the company's biggest assets. An iconoclast with a grand vision, the San Francisco resident can sell almost anyone he meets on the way of thinking.

But some who know him warn that Benioff could also be the company's biggest liability. As the largest individual shareholder -- he owns a third of the company -- Benioff generally does what he wants with, and some say the creative, unpredictable founder would be better off hiring a professional manager to replace him as chief executive officer.

Benioff did hire a CEO, John Dillon, shortly after starting But in November 2001, Dillon was fired because, as he describes it, "Marc decided that he wanted a turn at the wheel."

In March, Chief Financial Officer Andrew Hyde also left, the victim of another firing, according to Dillon. Benioff would not confirm that Hyde had been fired. Former Autodesk CFO Steve Cakebread was recently hired to replace Hyde.

Both Dillon and Lane liken Benioff's desire for control to Ellison's grip on Oracle's operations.

"He is the Ellison Mini Me," Dillon said, referring to the Austin Powers movie character.

Benioff says Dillon did a good job as CEO, but he decided to step down, he said, in because "some of the things I wanted to happen were not happening" and "it was time for a change."

Now, Benioff, says, "I'm doing a good job as CEO."

Dillon sees it differently. "The management team voices a lot of frustration at the ability to get things done. They feel they're making progress in spite of Marc at times."


The frustration stems from Benioff's impatience and distractibility, said Dillon, now the CEO of the Oakland shipping technology firm Navis.

"Marc would go over to (his house in) Hawaii and come back with a truckload of ideas and want them implemented that afternoon. We had plenty of other initiatives going," Dillon said.'s staff is happy, and no one has quit since Dillon's departure, Benioff said.

"I'm sure at times for any executive there are points of frustration, but I really can't tell you I have that going on," he said.

Despite the unhappy ending of his employment at, Dillon said he's still on good terms with Benioff; he just signed up Navis to use the product.

Benioff admits he's got a bit of an attention deficit. Before settling down with his current steady, he went from one girlfriend to another as quickly as his mentor Ellison does, friends say. (Unlike Ellison, Benioff has never been married.) But he fights his distractible nature: He got rid of his BlackBerry e-mail device because "it's too addictive for my personality." He does yoga and meditates to focus his energies.

Once Benioff does focus on a task, his determination is relentless, says Robert Thurman, the well-known Buddhist scholar and head of the New York nonprofit Tibet House US, of which Benioff is a director. Thurman is a director of the, the company's charitable partner.

Benioff successfully got a donation of computers and software to some schools for Tibetan refugees in India, something no one else had managed to do because of the bureaucratic and political hurdles involved in working with Tibetans in India.

"He didn't take no for an answer, and he got it done," said Thurman, father of actress Uma Thurman.


Benioff is intelligent and hyperkinetic. On a recent drive to visit customers, he spat out ideas for how his company will change the world so rapidly that that he missed his turns and had to U-turn several times. Apparently, his brain has always been spinning this fast: He started his first business as a teenager at Burlingame High School, programming video games for Atari. At 19, he worked as a programmer for Apple Computer.

Maybe he inherited his unconventional elan. His grandfather Marvin E. Lewis was a lawyer and San Francisco supervisor credited with helping make BART a reality and with winning the first court-awarded damages for victims of emotional suffering. In a 1970 case dubbed "A Cable Car Named Desire," Lewis won a $50,000 payment from San Francisco for a woman who said she became a nymphomaniac because of a cable car accident.

Benioff is a lot of fun, friends attest. Using one-day credentials, he performed a wedding ceremony for former Oracle co-worker Evan Goldberg, and ended it with an offer to help out anyone else who might want to get hitched.

"He said, "No charge,' " recalls Goldberg, now president and chief operating officer of Oracle partner NetLedger.

Above all, Benioff is an incredible marketer. Lane recalls when Benioff, as a little-known manager, made a presentation to thousands of Oracle senior salespeople that had them jumping around and singing as if they were at a revival meeting.

"It was like a circus atmosphere -- music, movies, videos, stage props. He had them eating out of his hand," Lane said.


But Benioff's relentless self-promotion got mixed reviews at Oracle, according to those who worked there at the time.

Some regarded him as someone who came up with a lot of wacky ideas but never accomplished anything real, Lane said. Lane, however, believes Benioff made lasting contributions to Oracle.

Benioff shrugs off the criticism.

"When you're young and rising at a big company, there's always going to be one eyebrow up," said Benioff, reached at his house in Hawaii, as he set out with his girlfriend for a drive to the active Kilauea volcano.