What to Make of Benioff’s Growing Cloud Empire

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Marc Benioff’s insistence on calling Salesforce.com a cloud computing company used to draw a few laughs. Sure, SaaS is delivered via the Internet and Force.com existed within the Salesforce.com perimeter, but Salesforce wasn’t out there selling real cloud computing to the masses. That’s been changing over the past several months with offerings like VMforce and Database.com, and its acquisition of PaaS pioneer Heroku for $212 million is the icing on the cake. Now, Salesforce.com joins the ranks of bona fide cloud providers. Maybe it’s time to change its name.

For the uninitiated, Heroku is PaaS offering that runs atop Amazon EC2 and is designed for web applications written in Ruby. It provides a highly abstracted environment into which, essentially, developers port their code, check off the tools they want to use, and the platform takes care of the rest. Many, including myself, sing the praises of PaaS as the future of cloud computing, and Heroku’s 100-000-plus applications make among the most-popular PaaS options around, especially considering its Ruby-only support. We’ll watch to see if Salesforce.com keeps Heroku on Amazon’s infrastructure or tries to move it to the vaunted Force.com platform atop which all its other services run.

It seems with Force.com already supporting Apex and Java (via the VMforce partnership), Salesforce.com wanted to expand into the Ruby space to increase its developer reach even further. The other option for doing so would have been Engine Yard, but its more hands-on approach to PaaS, offerings running atop both Amazon EC2 and Terremark’s Enterprise Cloud, and large enterprise accounts would have made integration within Salesforce.com a more burdensome process, and a more expensive one. The price tag for Heroku is respectable, but Engine Yard CEO John Dillon told me recently his company is only for sale if the price is right, and there are rumors it’s already had some high-profile suitors. Now, it has a measuring stick for what it can command.

Back to Salesforce.com, Heroku is – presently, at least – the culmination of its cloud strategy. Aside from its flagship CRM product and related application-level offerings, the company has built and bought an impressive suite of cloud computing services. Force.com, VMforce, Heroku and Database.com provide cloud infrastructure and management for web apps, while partnerships like today’s RemedyForce offering with BMC Software tackle service management in the cloud. Once a thorn in Oracle’s side only in terms of stealing application sales and Benioff threatening to steal Larry Ellison’s braggadocio crown, Salesforce.com is encroaching on a lot more of Oracle’s turf – including databases and application platforms.

Cloud providers should be trembling a bit, too. This won’t displace Amazon or make Windows Azure less impressive, but startup-style innovation with Salesforce.com’s financial backing means there’s a real possibility for disruption in the cloud landscape. Benioff appears to have grand plans that don’t involve reining in new talent like the Heroku team. Heroku CEO Byron Sebastian indicated as much to Om this morning, saying that everything from the team to the office space will remain as is, and that “[f]or developers, nothing changes, not the pricing, or the focus.”

The next step, though, probably should be reorganizing with Salesforce.com to get everything in its place. It now has myriad offerings across as many areas, all somewhat jumbled to someone looking into Salesforce.com for the first time. It’s too bad Cloud.com is taken, because a corporate name change might be in order, too. Benioff’s cloud computing empire now spans far beyond CRM.

Image courtesy of Wikipedia Commons contributor MatthiasKabel.

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