Arik Hesseldahl

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Video: Marc Benioff Answers His Critics, With A Little Help from Jim Cramer

Last night I and a few other reporters were invited to the swanky New York restaurant Per Se to dine with CEO Marc Benioff, a few dozen of his customers and a few prospective ones. No, it wasn’t the one-on-one chat I had been expecting earlier in the day. (Why that didn’t happen is a long story.) But it was a chance to hear Benioff, who’s probably cloud computing’s most evangelical spokesman, tell his company’s story.

Naturally, his before-dinner remarks centered mostly on Service Cloud 3, the new, more socially aware version of Service Cloud, Salesforce’s platform for tracking customer support and service. And over a truly fine meal, it was a chance for a few companies mulling Salesforce deployments hear from current customers. I met a pair of executives from Verizon who listened closely to an exec from NBC Universal describe the ins and outs and the good and bad of Salesforce. Happy customers make good informal sales reps, apparently.

Benioff went on to describe how the day before he had received call on his cell phone, and the caller say “Please hold for the President of the United States.” President Obama was calling as part of his efforts to reach out to CEOs and talk about the economy. He didn’t detail what they talked about, but in jest for assembled dinner crowd, he said he told the president that if he wanted ideas to get the economy going he should “call Cramer.” As in CNBC’s Jim Cramer, the host of “Mad Money” who was at that very moment seated across the table.

Benioff had appeared on Cramer’s show earlier in the day, and the 12-minute segment is below. It started with Cramer basically repeating much of the criticism leveled at Salesforce by The Wall Street Journal’s Brett Arends in a Feb. 25 column questioning certain choices for use of Salesforces cash, including a $278 million real estate buy for a new corporate campus and hiring aggressively, and so on.

Cramer then turned to Benioff himself, speaking live from the Cloudforce event in New York, to answer. “What kind of a dot-com are you getting me into?” Cramer howls. “We have a small window of opportunity to execute against Oracle, Microsoft and SAP,” and that means now is the time to hire and to invest. And what about the observation that Benioff has been selling shares in his own company? Benioff, who owns about 10 million shares, said his interest is “aligned with the shareholders,” and that means growing revenue and taking market share away from competitors. “We’re in a market-share war,” he said.

So far, shareholders are still buying the Salesforce story, and even Cramer says he’s “drinking the Kool-Aid” and that he “likes the taste of it.” Indeed. So do many others. At this time of the year in 2009, Salesforce was trading at $33. It closed yesterday at $130.07. It’s hard to argue with that kind of performance. But how long can it last?

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