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Cloud Tools for Connected Communities

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Cloud computing economics, platform leverage, and power for community creation

Cloud computing economics, platform leverage, and power for community creation

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  • 1. Cloud Tools for Connected Communities Peter Coffee Director of Platform Research salesforce.com
  • 2. Safe Harbor Statement “Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward- looking statements including but not limited to statements concerning the potential market for our existing service offerings and future offerings. All of our forward looking statements involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include - but are not limited to - risks associated with possible fluctuations in our operating results and cash flows, rate of growth and anticipated revenue run rate, errors, interruptions or delays in our service or our Web hosting, our new business model, our history of operating losses, the possibility that we will not remain profitable, breach of our security measures, the emerging market in which we operate, our relatively limited operating history, our ability to hire, retain and motivate our employees and manage our growth, competition, our ability to continue to release and gain customer acceptance of new and improved versions of our service, customer and partner acceptance of the AppExchange, successful customer deployment and utilization of our services, unanticipated changes in our effective tax rate, fluctuations in the number of shares outstanding, the price of such shares, foreign currency exchange rates and interest rates. Further information on these and other factors that could affect our financial results is included in reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time. These documents are available in the SEC Filings section under Investor Information at www.salesforce.com/investor. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
  • 3. IT had a very bad year Global IT spending estimated down 5.2% during 2009 Spending won’t return to 2008 level until 2012 Half of CIOs will see zero growth or further cuts this year – Gartner (informationweek.com, 26 Oct.)
  • 4. 100% Cloud Cover?
  • 5. “If you take the ideal world, everything is done as a service: computing, storage, software and operations.” “The risk for enterprises that don't start a SaaS migration strategy soon is that their IT organizational structures will be a competitive disadvantage.” Geir Ramleth www.networkworld.com/news/2008/102908-bechtel.html CIO, Bechtel Corp.
  • 6. The Cloud as a Multi-Product Marketplace Platform as a Service PaaS as Enterprise “Servers as a Service” (PaaS) for the Application Framework Inquiring Developer Virtual Servers Programmable Cloud Logic Programmable User Interface Virtual Servers Python/Java Virtual Application Server Real-Time Workflow Integrated Content Servers & Approvals Library Database as a Service Database as a Service Unlimited Real-Time Customization Granular Security & Sharing Infrastructure as a Service Infrastructure as a Service Infrastructure as a Service ~Familiar Developer Model β Offering Supports Large-Scale SaaS Rapid Scalability Innovative Technology Deep-Dyed Multitenancy
  • 7. What it Means to Promise “The Cloud” Moving toward an ideal: “Zero, One, Infinity”* 0 On-premise infrastructure Acquisition cost Adoption cost Support cost 1 Coherent and resilient environment – not a brittle “software stack” ∞ Scalability in response to changing need Integratability/Interoperability with legacy assets and other services Customizability/Programmability from data, through logic, up into the user interface without compromising robust multi-tenancy * From The Jargon File: “Allow none of foo, exactly one of foo, or any number of foo”
  • 8. Enterprise Clouds Enable Deep Customization Build strategic applications Your Clicks User Interface Customize any aspect Logic Upgrade when convenient Your Code Database Your IP under your control Metadata representations: Rigorously partitioned data, logic and customizations for multiple customers Coherent Code Base and Managed Infrastructure Coherent Code Base and Managed Infrastructure
  • 9. Cloud Integration: No Need for Rip/Replace Mash-ups from Native Integration Developer Native ERP Web and Desktop Partner Toolkits Connectors AppExchange Connectors Ecosystem
  • 10. Integration in Practice Customer Master Invoicing/Billing Master Order Master Pricing Master Product Master Cast Iron Integration Appliance
  • 11. Cloud Security: No Need for Excuses Facility Security Network Security Platform Security • 24x365 on site security • Fault tolerant external firewall • SSL data encryption • Biometric readers, man traps • Intrusion detection systems • Optional strict password policies • Anonymous exterior • Best practices secure systems mgmt • SAS 70 Type II & SysTrust Certification • Silent alarm • 3rd party vulnerability assessments • Security certifications from Fortune 50 • CCTV financial services customers • Motion detection • May 2008: ISO 27001 Certification • N+1 infrastructure “There are some strong technical security arguments in favor of Cloud Computing… (Craig Balding, Fortune 500 security practitioner)
  • 12. Transparency Surpassing Enterprise Norms Full Public Disclosure Live System Status Security Best Practices Historical Performance May-July 2009 • 99.997% of planned availability • Continually narrower maintenance windows Amazon Google
  • 13. Real-World Results: Financial Services The Phoenix Companies sought a new CRM solution with flexibility, ease of use, mobile accessibility, low-cost modification capabilities, minimal user training requirements, and simplified integration with other apps. Changeover to Salesforce CRM took less than two months. Working with salesforce.com partner OKERE (now part of Fujitsu Consulting), Phoenix used the Force.com platform to create customizations for contracts and underwriting. Using the Force.com API, Phoenix integrated several legacy systems with Salesforce CRM to provide consolidated, real-time access to information. The Salesforce CRM implementation cost the company less than one-fourth of the project’s original budget. By streamlining communication between field and inside sales within Salesforce CRM, Phoenix has reduced phone and email inefficiencies, boosted productivity, and, in 2005, increased life insurance sales by more than 33%. Following its upgrade to Salesforce CRM Unlimited Edition, Phoenix achieved 96% user adoption.
  • 14. Development Reinvented, not Just Relocated Nucleus Research analyzed Force.com deployments: found average 4.9 times faster development (range 1.5x-10x) versus Java or .Net – Custom objects – Administrative tools – Workflow engine – Pre-tested platform Galorath Inc. compared developers’ Force.com productivity to Java development – Requirements definition time reduced 25% due to rapid prototyping – Testing effort reduced by (typically) more than 10% – Development productivity of new code 5x greater – Overall project cost 30-40% less CustomerSat sampled more than 1,100 Force.com development teams during summer 2009 – Average experience: 4 applications deployed to date – Average project cost savings: 48% – Average project acceleration: 5.1x
  • 15. Enterprise Clouds Enable Powerful Connections Build strategic applications Your Clicks User Interface Customize any aspect Logic Upgrade when convenient Your Code Database Build vital communities Metadata representations: Selectively shared data, logic and customizations for multiple customers Coherent Code Base and Managed Infrastructure Coherent Code Base and Managed Infrastructure
  • 16. Family Service Agency of San Francisco HIPAA-compliant EHR for mental health case management 50% reduction in time spent on paperwork, reporting and reimbursement Eliminated 2-month wait for County reports Real-time tracking of individual client outcomes (treatments adjusted accordingly) Client Intake Self-audits and tracking of clinician, program, and Case Management division productivity Service Plans Client Outcomes Automated reimbursement process though auto- Self-audits population of funder forms “ our client programshave visibility into set and track of For the first time we and the ability to the effectiveness metric-based benchmarks for client progress. ” Bob Bennett CEO
  • 17. What are the Obamanomics of SaaS? Conspicuous, quantified success stories and policy statements: – “In a traditional IT procurement environment, it would have taken us about six months to upgrade USA.gov to better meet the needs of our citizens. However, in the cloud environment we are now able to do upgrades in one day – giving us greater agility and saving taxpayers approximately $1.7 million annually in computing infrastructure costs associated with USA.gov.” David McClure GSA Associate Administrator Office of Citizen Services and Communications – “We will...work with industry to ensure cloud-based solutions are secure and compliant thereby reducing duplication of security processes throughout government.” Casey Coleman GSA CIO gsa.gov, 9/15/2009
  • 18. U.S. Census Bureau Increasing Response Rates for the Decennial Census Deployed a custom app in three months Records, tracks and manages contacts and activities between staff and external partners App has scaled up as census goes active; will unwind as process concludes Manages 2,200 users: temporary workers geographically dispersed at headquarters and 12 regional offices
  • 19. Spring ’10 Release: Continuing Renovation ANSWERS – Harness the expertise of your community right on your Web site. – Customers ask questions, experts answer, the community votes: the best knowledge bubbles to the top. CODE SCHEDULER – Monitor and edit schedules either programmatically or through the UI – Start processes at times that are most convenient DATA MODELING – Easily create up to three levels of master-detail relationships – Pull data from all levels of your complex data model into your reports AUTHENTICATED SITES – Scale your public Web site for up to millions of authenticated users – Eliminate code for registration and login
  • 20. The Drucker Imperative “The typical large organization, twenty years hence, will be composed largely of specialists who direct and discipline their own performance through organized feedback from colleagues and customers.” “It will be a knowledge-based organization.” Peter F. Drucker, in The New Realities …in 1989
  • 21. Whose Knowledge Is It, Anyway? User innovation decouples from corporations when: – Some users have incentive to innovate – Some innovators have incentive to share – Diffusion of innovations is inexpensive The user conversation will take place – Users can readily find each other – Users will turn to each other for affirmation as well as for assistance – You can host the conversation
  • 22. Are Your Customers Pulling Their Weight? “ Ideas has beenofan unbelievable home run. We areStarbucks it―the voice the customer is totally present at loving in a brand new way, thanks to the Force.com platform.” Chris Bruzzo CTO, Starbucks
  • 23. Handling Social Situations: February 10, 2010 merges social feeds into Gmail USAToday says “iGeneration…has no ‘off’ switch” – Research suggests teens “survive distractions…better than we would predict by their age and their brain development.” – Teens/tweens “don't remember a time without the constant connectivity to the world that these technologies bring… [and] everything is customized and individualized” But same-day article also reports that – “Desire to unplug has made an unexpected success out of websites such as Web 2.0 Suicide Machine… …that automate and turbocharge the otherwise laborious manual process of scrapping your online self”
  • 24. You Can Be Social…Safely It’s hard to add security to a tool that shares by default It’s possible to add social tools to a proven trust model
  • 25. The Conversation Within The friction-free marketplace comes home: – Employees are customers, too • Career experience is a product • Time on the job is a payment – Employees seek value • Factions go under the radar • You can’t tell what they’re really doing The in-house conversation will take place – Harness the energy – Focus the ingenuity
  • 26. What Drives Web 2.0 in the Workplace? Goals: – Collaboration – Creation – Knowledge Identification – Talent Motivation/Retention Methods – Knowledge Engineering – Peer Tagging/Rating – Networking – Publication
  • 27. To Everything There is a Season ’50s ’60s ’70s ’80s ’90s ’00s Windows IBM PC Windows XP PC MITS Altair 3.x/9x/NT Macintosh & Mac OS X & Linux 1.0 DEC DEC Sun Sun/AMD Sun/ILM Mini Workstations x86 Servers PDP-8 VAX 11/780 Render Farms & Servers Niagara CPUs Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries
  • 28. ’50s ’60s ’70s ’80s ’90s ’00s Cloud Apps Grid & X Window Computing Platforms e nc da en sc A Windows IBM PC Windows XP PC MITS Altair 3.x/9x/NT Macintosh & Mac OS X & Linux 1.0 e nc ge er Em DEC DEC Sun Sun/ILM Sun/AMD Mini Workstations x86 Servers PDP-8 VAX 11/780 Render Farms & Servers Niagara CPUs … e nc t en ra em a pe in Ap ef R Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries
  • 29. This Is Not the Bleeding Edge 40% of IT execs have been using cloud computing for more than three years – 62% of surveyed firms plan to increase their use of SaaS this year – 60% project SaaS in vertical apps within two years By 2011, more than 70% of U.S. enterprise data centers will hit the wall on power, cooling and space: – More than 1/3 of companies expect IT investment reductions in 2009 – Outsource data-center demand is up 14% in the last 12 months; capacity has grown by only 6% – Data center costs have doubled in many markets; in London, they're up sixfold 37% of firms are replacing current on-premise systems with SaaS
  • 30. This is the Leading Edge Nothing is perfect… …but some things are improving more quickly than others If “the cloud can’t do that” today, what about next year? Can today’s mature traditional models say the same?
  • 31. Peter Coffee Director of Platform Research pcoffee@salesforce.com Q&A? facebook.com/peter.coffee twitter.com/petercoffee