Comment by nikcub

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.