Salesforce.com Aims to Grow Into a Utility Computing Power

SANTA CLARA, Calif. -- Salesforce.com CEO Marc Benioff wants to make his company as big a player in cloud computing services as it is today in software as a service.

Over the last decade, “we focused on software as a service,” Benioff said. Salesforce.com “will really be focused on the platform as a service in our next decade."

This means that Salesforce.com wants to concentrate on delivering data center and application development services, including the server capacity, storage, management services and the labor that goes with it to businesses of every size.

Benioff presented these goals as he discussed the details of an expanded relationship with Google that involves the Force.com Toolkit for Google Data APIs. The Force.com platform as a service is a set of development tools and IT services that lets customers build business applications and run them “in the cloud” on Salesforce.com’s data center infrastructure.

In April, Salesforce.com announced it was directly integrating Google Apps into its application platform. Now the toolkit for Google Data APIs provides a set of standard APIs that let developers build applications that integrate data and content in Google Apps with Salesforce.com applications.

Salesforce.com’s overall goal with Force.com is to build a utility computing service on par with Amazon.com, Google and eBay over the next decade.

In fact, Benioff said the platform as a service will be nothing less than the killer app of the Web 3.0 generation because more and more businesses will decide to stop investing in their own in-house IT infrastructures and switch to cloud computing services.

But what isn’t clear so far is whether Salesforce.com will generate the revenue and profits to allow the company to invest in cloud computing services on the same scale as a Google, Amazon.com or eBay.

Benioff noted that Salesforce.com has spent $300 million to build its current cloud computing infrastructure. But Vic Gundotra, Google’s vice president of engineering, said Google spends more than $4 billion annually in capital expenditures to build and support its computing infrastructure.

Salesforce.com has to hope that both its established CRM (customer relationship management) and applications business as well as its new platform services grow phenominally if it aspires to be as large as a Google or Amazon.

It also looks like the whole utility computing sector is going to be highly competitive because many big players, no less than IBM, Electronic Data Systems, Oracle, Hewlett-Packard and Sun Microsystems, have either been in the business a long time or are making plans to rapidly expand these services.

Gundotra said Google “believes in the vision of software as a service.” But the barrier to enabling enterprises to use cloud computing on an even greater scale is that the browsers have to become more powerful to have the full client computing capability of the PC platform.

He noted that this is already starting to happen. Google, he said, is “thrilled” with the new features built into the Mozilla Firefox 3.0 browsers. Google said this is a sign that the next generation of browsers, including Internet Explorer, “will have very significant improvements” that will give the features they need for cloud computing.

Meanwhile, companies have already started using Force.com to build major business applications on top of Salesforce.com computing infrastructure.

Coda, an ERP software company, decided to use the Salesforce.com platform to deliver a new on-demand version of its accounting applications because “we realized people were starting to outgrow their existing applications [and] wanted new apps and new way of delivering them,” said Jeremy Roche, Coda CEO.

“What we would like to do for accounting is what Salesforce did for sales,” Roche said. The advantage of using Salesforce.com computing platform is that Coda didn’t have to duplicate many of the application services, such as workflow and reporting.

“We are sharing not only the technology, but also the code of the [Salesforce] application,” he said. The relationship means that while Coda is based in the Yorkshire Dales, Roche said, “we are now linked inexorably with Silicon Valley because everything we do is linked to Salesforce.com.”