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An inflection point in story

by Yefim Natis  |  December 8, 2010  |  3 Comments (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 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 is now called (only 4GL development tools remain as a separate offering not overlapping with
  • Apex code (the proprietary highly-optimized language) is now referred to as 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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Yefim V. Natis
VP Distinguished Analyst
17 years at Gartner
33 years IT industry

Yefim Natis is a vice president and Gartner distinguished analyst in Gartner Research. Mr. Natis' research focuses on enterprise software infrastructure, including technologies such as application servers, cloud application platforms… Read Full Bio

Thoughts on An inflection point in story

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  2. Thomas Lukasik says:

    You’ve provided a really interesting perspective and effective analysis of the latest events at Salesforce — in fact, after reading it I’m about to take another look at the Salesforce platform.

    BTW: As a long time Java developer, I’m hoping that they’ll go in the Caucho (Quercus) direction if they ever do decide to add PHP support.


  3. Yefim Natis says:

    Thank you, Thomas.

    I think there is every reason to look at as a PaaS provider, but do consider that most of the announced changes and additions are going to be delivered over time, some towards the end of 2011. Some of the new technology is unproven in production use.

    Success of the strategy for will depend on its ability to deliver good technology and to convert their still mostly CRM-focused sales force to selling platform technology (services, actually) to IT projects.

    I would recommend moving towards offerings gradually, understanding that further changes are likely.

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