Q: ... Microsoft said it's moving into cloud computing. Is this validation of your philosophy? And is that good news or bad news for you when you see the software industry moving toward the on-demand model or the Internet model?

Benioff: Well, I'll tell you the same thing I tell you every year, it's probably very boring, which is that it's the end of software and that the entire technology industry and specifically the software industry needs to move from that traditional model of packaged software to this model of software delivered through the Internet.

And we've really seen that bifurcate into two areas. One is applications - we've spent a lot of time talking about that - and the other area which is very exciting is platforms.

(What) Microsoft said is that they think operating systems are going to move off of the desktop and off of servers and into the cloud. And that is something we've been saying now for a couple years. But that's not a future thing like it is for Microsoft, it's a present. We have lots and lots of both customers as well as independent software vendors who are betting their businesses based on our new Internet operating system.

And the thing that I think that's most interesting is, I don't even have to do the hard selling anymore, now I have Microsoft telling people that the future of the operating system is delivered in the cloud, not on their desktop. How fantastic is that for us?

Q: How are they going to do it? It's certainly not their history. Can you speak directly to what you think of their announcement?

Benioff: Well, I think that the benefit to Microsoft in the past paradigm is that they were able to create and control a monopoly on the PC. And they used various strategies to achieve that dominance. In this new world, no one company will have dominance like that; there'll be many players, many applications players and many platform players. And when we get to Dreamforce on Monday, you'll see that we have the major Internet companies there aligning with us.