Q A recent Gartner report suggested that many firms would adopt private clouds as a stepping stone to eventually moving to public clouds. Do you agree with this view?
A I think that the whole private cloud branding is brilliant – for VMware from a marketing standpoint it is brilliant. It’s for the really conservative CIO who just wants to say they are part of the cloud by virtualising their infrastructure – but it’s not really cloud computing, it’s virtual computing, and the value proposition is still pretty low. Everything is the same except you’ve taken hardware out of the equation. There is value there, but not the same as with full multi-tenancy.
It is a way to step out of the primordial ooze of data centres into the cloud, so from that basic standpoint I think it will help, but at some point companies have got to take a leap.
Q Cloud computing is gaining acceptance. But is it still hard to persuade big companies to adopt this approach?
A When we started the company, we could not have sold to enterprises – they needed to see proof. Each large customer looks for large customers as examples, but that’s getting easier now. There are still conservative buyers who look for references and start small and then they find their end users tell them that they love it. So they tend to start with applications then follow with the platforms.
We coexist with existing infrastructure and services. As we take over more, then companies may start to shut down existing systems. Large companies have decades of software tangled behind the firewall, both bespoke and purchased, and it takes a while to unravel and that’s where services businesses are coming in and helping.
Other companies start in the department where there’s the biggest need. There’s a huge benefit if the business is geographically or culturally dispersed. Japan Post has 100,000 employees using Salesforce. If it used software that had to be installed, they’d never get it done. So here’s an example where we’ve gone in to a big company and given immediate value.
Q Who do you see as your competitors – the big traditional vendors, such as SAP and Oracle or other cloud vendors?
I find it frustrating that every time we look for a viable competitor to keep us on our toes they retract. Most of the competition we have is on price, but we want more competition because we want the whole cloud economy to grow. It’s really an innovator’s dilemma. There’s so much investment in technology and revenue for traditional vendors, that’s it’s tough to change. The move from mainframe to client-server was just the same. So maybe it’s the new vendors that will come in.
We haven’t seen anything yet from SAP. Oracle did have on-demand but it’s not really their vision, they still want to sell software and now hardware [with the Sun acquisition]. If you look at Microsoft, from the applications perspective they really don’t have anything to speak of. Azure as strategy is very interesting. Microsoft has done a good job of leading the developer community, but it’s still a complex offering.
Kudos to Amazon. It’s still lower level computing and not seeing a lot of business applications offered on it. Google has great technology as well, but I see it as ‘technology’ not a solution.
Q Will 2010 be the ‘year of the cloud’?
A We’re in the middle of that shift, so everyone wants to see in black and white, this is the year of the cloud, but it’s shift. Client-server didn’t happen overnight. Only in hindsight can we see what happened. It’s hard in the middle of trend to see it clearly.
Q Is security still a worry for buyers?
A When we started the company the big question was can they trust the Internet? Now ecommerce is a given and companies are connected to the Internet. Customers come into our data centres and if they find an issue, we solve it. Everyone gets involved. We’ve become more secure over time and in most cases we’re more secure that what customers have behind their firewall. It’s the people who don’t know us well that are fearful and references help and that fact we are very open.
Q With any new market there are going to be cowboys trying to grab a slice of the action. What questions should customers ask to weed out wheat from the chaff?
A It’s all about trust. Ask them first if they have a disaster recover site and can they show it to you. You can get started pretty quickly and build a service and it can look the same as something with a large data centre and back-up. To the end user it looks the same. We love to show customers in real-time what we can do.
Large customers know to ask the questions but smaller companies don’t. They need to know what questions to ask in terms of trust and performance. Performance is definitely a question to ask.
Q What will Salesforce be concentrating on over the next year?
A Service cloud will be the next billion dollar business. There was a lot of traction last year for the on-demand version of knowledge base through our acquisition of Instranet. Collaboration too is important, though most people don’t understand Chatter or put it in a box with social networking. It’s not really about that: it’s about collaboration. With Chatter, instead of being data-driven your data will come alive and you’ll start interacting with it – the whole concept of viral communication will take off. Chatter provides a much better way to do your work and makes you more effective. Plus you have that persistent memory – you see interaction and history of how something evolved. You can expose it outside the enterprise where the conversation might be with customers. Platform is the other big play for us.
