Comment by nikcub
15 years ago
"Salesforce has been pushing heavily into the cloud to compete with AWS and Azure"
Just five years too late. They should have built AWS way before anybody else (esp Amazon) did. They were sitting on the opportunity for so long, had a customer base that was already sold on the cloud.
They are now playing catch-up, with acquisitions and the release of Database.com etc.
Huge opportunity missed, the company could have been 4-5x the size it is today.
Or more likely distraction from their core CRM business would have made it difficult to compete, Siebel and SAP would have taken their high-end customers and Zoho their low end customers. Stuck between a pincer market move they would have been forced to sell to Oracle for a few hundred million dollars.
Salesforce five years wasn't anywhere near enough in the position that they could afford to throw tens of millions of dollars into a non-core product (which Amazon could easily do).
It easy to point out opportunities missed without looking at the cost of those opportunities.
"core CRM business"
They started promoting PaaS (term they coined) ~4 years ago and the marketing dropped CRM to focus on Salesforce being a 'cloud expert' (or leader). All of what Benioff has been saying around that time and up to today was Salesforce moving beyond CRM and into being 'cloud' and 'platform'.
I remember him having a slide in one presentation where it showed "CRM ==> Platform ==> PaaS", or something similar, showing Salesforce development and roadmap.
Problem was, for them it meant providing more apps and the app platform and building it themselves, rather than providing the tools to allow developers to build out their platform for them. A bit like Microsoft not having Visual Studio and MSDN.
I thought Salesforce's strategy was more to use force.com developers to build apps that add value back to the core Salesforce product. Trying to compete with AWS as a cloud for the masses is kinda pointless in terms of making any profit for your company, isn't it?
That was the second phase of their strategy, and then they went out into the platform-as-a-service. There is a lot to be made in selling the picks and shovels to developers, and for Salesforce this would have been easy since developers already had faith in them, and hosting with Salesforce would put your app closer/in the same environment as the platform you are building on.
Salesforce take a small cut of app sales, they could have made a lot more hosting all of these apps and providing the remainder of the dev toolchain/platform.
It also meant that they could have captured part of the market for intranet apps. The app might not be related to salesforce at all, other than using it for auth, but salesforce could have hosted the app and charged crazy enterprise rates (ie. not cents per hour like EC2, more database.com type rates).
On a semi-related note, I think Facebook will eventually get into this. Bret Taylor who is the CTO now was on the AppEngine team. I wouldn't be surprised if Facebook do PHP and Python app hosting soon.