Salesforce.com (SFDC) is spending over $250 million for Heroku that has revenue likely under $10 million (adoption momentum notwithstanding since most of the adoption is of the free version of the service). Some question the wisdom of such expensive buy. However — such challenge is short-sited.
SFDC is not fighting to get a few $$. They are fighting to be recognized as a leading platform provider for cloud computing.
SFDC has faced two problems in the past:
- Proprietary nature of APEX/Force
- Perception of most prospects that they are a CRM vendor, not a platform vendor
In 2011 they are addressing both issues:
- Delivering Database.com is clearly separate from CRM and very interesting in the platform space – they are bound to be noted as having gone beyond just apps now
- Delivering Java (VMForce) and Ruby (Heroku) will give developers SFDC multi-tenant database with standard programming. I would not be surprised if they would look at Zend or Caucho next to add a PHP stack.
The casualty of this path seems to be Apex/Force. However – not so fast:
- Most of force.com is now called database.com (only 4GL development tools remain as a separate Force.com offering not overlapping with database.com.
- Apex code (the proprietary highly-optimized language) is now referred to as database.com stored procedures. A brilliant move – all stored procedures are always proprietary and always highly optimized for data access. These stored procedures are also highly optimized for multi-tenancy – a unique feature no one will match for some time.
I believe SFDC is executing on a sophisticated vision to transition form a proprietary cloud platform to an open cloud platform without losing its users or its differentiation.
Brilliant strategy. If paired with brilliant execution — Dreamforce 2010 will be an inflection point in SFDC story — form a successful niche player to a software industry leader.
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