Salesforce.com - The New ASP model for business software

You work in the software industry, say in the second largest software company in the world, work your way up and start a company called Siebel. You the big daddy in your vertical now and can call the shots. Your previous boss and colleague start a new upstart called Salesforce.com which is exactly opposite to what the leaders do.

This is the story of how two employees of Oracle have created two of the best known CRM companies - Siebel and Salesforce.com.

Like all good Silicon Valley brawls, this one is complicated by the intertwined personal histories of the executives.

A Salesforce representative said several weeks ago that the company could not comment for this story because of the quiet period before its IPO -- despite Benioff's interview with the New York Times.

Benioff and Siebel both got their starts working at Oracle for Larry Ellison. Siebel left in the early 1990s after a falling out and founded his company.

Benioff continued to climb the executive ladder at Oracle, but he was also an early investor in Siebel's company, which -- along with his Oracle options -- made him fabulously rich by his mid-30s.

All that money caused what Benioff has described as a personal spiritual crisis. In the late 1990s, he took a leave from Oracle to find himself, which is when he also hatched the idea for Salesforce. The company was founded in February 1999. Ellison invested more than $1 million and became a board member.

Now Salesforce.com is trying to go public and is fighting a whole lot of companies which is following its business model including Siebel.

It will be interesting to see how things shape up and the market for other ASP companies too.