Salesforce.com Dreams Up New Cloud Formations

Salesforce.com Inc. held its Dreamforce conference in San Francisco last week and made some major announcements. The company expanded its current offerings into "Cloud 2" environments, or second generation clouds, and unveiled a number of new cloud service offerings including a Ruby on Rails application platform-as-a-service (PaaS) cloud, which resulted from the purchase of Heroku Inc.

Focal Points:

• Salesforce.com began the Dreamforce event by pointing out its continued rapid growth of revenues and customers. The company achieved $1.7 billion in revenues so far for its fiscal 2011 year and expects to approach the $2 billion mark by end of its fiscal year in January. Mark Benioff, Salesforce.com CEO, stated the company has a customer subscription base in excess of 87,000. He referred to the new era of cloud computing as social, mobile and living in real-time. The CEO called this new cloud environment Cloud 2 and announced that the existing offerings have been enhanced to meet the new requirements. The Chatter collaboration cloud has been expanded to be included in the sales and service cloud offerings and is now available for free for companies at www.chatter.com. The figure below shows the company's view of the new cloud offerings except for the Heroku acquisition, which has  not closed yet, and business partner offerings.
• Also announced was the database.com cloud offering. The service currently is the database that underlies all of the Salesforce.com services but is being extracted out so that ISVs can take advantage of its capabilities without having to acquire it through a bundled offering. Company executives claim the statement of 99.9 percent reliability is a conservative statement and in reality, database.com will have availability equal to the rest of Salesforce.com services, which exceeds 99.99 percent. The firm also introduced five new enterprise cloud platform services, including Appforce, Siteforce, VMforce, ISVforce and Heroku, for building Cloud 2 applications. Appforce helps companies deliver powerful and scalable departmental applications while Siteforce provides a revolutionary way to build or import pixel perfect websites without code. Siteforce enables users to easily draw pages, manage content, and reuse pre-built components, all in real-time. VMforce provides Java developers a cloud platform. Java developers can run their Java applications natively on Force.com, use the most popular Java developer environments, the Spring Framework and Eclipse IDE, and leverage open standards such as JPA for enterprise Java development. ISVforce enables ISVs to quickly build and deliver multi-tenant cloud applications. On the partner front, Salesforce.com extended its relationship with BMC Software Inc. and announced Remedyforce, which is built on the Force.com platform and will be sold by both companies.
• Salesforce.com announced it entered into a definitive agreement to acquire Heroku, a fast growing cloud application platform for writing Ruby-based applications, for approximately $212 million in cash, net of cash acquired. The transaction is expected to be completed in Salesforce.com's fiscal fourth quarter ending Jan. 31, 2011. Heroku currently has more than 105,000 Web applications in use on its platform. The Heroku multi-tenant platform features a workflow and interface that mimics how developers work. The San Francisco-based company was founded in 2007 and currently has about 30 employees. Salesforce.com stated that for now the Heroku platform will remain where it is and not be moved over to its base.

Experton Group believes Salesforce.com's latest moves will keep the company on a strong double-digit growth path. The company has an excellent feel for what its prospects and clients need and want and is able to provide leading-edge technology ahead of the pack. The new offerings should bring many more companies to its cloud service offerings, as the Cloud 2 solutions offer the ability to rapidly support mobile platforms and social media in real time and seamlessly. The Siteforce product is extremely innovative, provides the types of tools a non-developer wants, and sets a very high bar for others that plan on providing Web site development platforms. IT executives considering cloud services in an area where Salesforce.com has a cloud service offering should consider Salesforce.com in their short list.