Global CIO: Will Salesforce.com's Soaring Stock Puncture The Cloud?Global CIO: Will Salesforce.com's Soaring Stock Puncture The Cloud?

Insider selling: This one's always tricky because unless you can take a multi-year view of the buying and selling done by insiders, narrow slices in time can reveal short-term aberrations that, over time, blend into the norm. But the stark trend revealing that all of the insider action involves Salesforce.com employees selling some shares can be unsettling. On the flip side, this can also be seen as validation of Jensen's overarching concern: that the company's success has pumped up its stock price to such a high valuation that you'd be nuts to buy at that or near these prices—so, assuming Salesforce's employees aren't nuts, they're taking this opportunity to cash out on some of their holdings. While I'd like to see Salesforce post some comparative long-term charts showing how this latest trend does or does not fit in with traditional patterns, I do not think this warning about the share price should be associated with the company's business prospects. VERDICT: Strange but not scary.

Is cloud computing all hype? While I've heard lots of folks express misgivings about the high level of froth in today's discussions about cloud computing, I have not heard anyone other than Jensen compare it to the monumental failures of the dot-com era. Is there too much rah-rah talk in some quarters about cloud computing's ability to fix every IT problem at no cost while also curing your bunions? Absolutely. Will there be a number of hanger-on IT vendors whose last-ditch grab for ongoing relevance will be to slap a "cloud computing" label on their otherwise lackluster products? Yes indeed. Does the cloud computing category—a sector epitomized by Salesforce.com as much as any other company—deserve the comparisons to the flawed and failed dot-com fever? No it doesn't—that's a crazy comparison and one that plays much more into emotion than it does into on-the-ground realities. VERDICT: Not guilty.

Can Salesforce.com stave off SAP? This is a terrific point for Jensen to raise: will the full-fledged entry into cloud computing by the world's leader in enterprise applications spell trouble for Salesforce.com? While SAP will surely have some successes in the market, the company itself has said repeatedly that its on-premise versions will remain the favorite and dominant choice for SAP customers for many years to come. Plus, as SAP pushes its cloud-based CRM product toward small and mid-sized businesses, Salesforce.com is continuing to drive its products toward larger and larger enterprises, with deployments of 50,000 seats and more no longer out of the ordinary. Plus, for quite some time now, Salesforce has been slugging it out in the market with Oracle and Microsoft—not exactly lightweights when it comes to competition—so while SAP will certainly intensify the competition, its imminent arrival does certainly not necessarily spell trouble for Marc Benioff's company. VERDICT: Yes it can.

Should Salesforce.com's rising costs be a concern? Tying into the point above about Salesforce.com's deepening incursion into the enterprise market, the company has had to invest in new ways of marketing and selling to and then supporting huge global organizations, and those investments have whittled away at profits. Benioff has said on more than one occasion that the company needs to invest for future growth, and in addition to its expansions of its field capabilities, Salesforce has also been pouring more money into developing new products for its more-demanding global customers while reinforcing its technology infrastructure as well. VERDICT: No more than usual.

Overall, I think Jensen's comments should be applied exclusively to the company's share price and not extrapolated to indicate a parallel imminent decline in the company's ability to meet and surpass customer expectations. Benioff & Co. have been doing exactly that for 10 years and appear to be well set to continue doing so well into the future.

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