Peter Coffee presentation on enterprise cloud computing to CIO Forum in Schaumburg IL 6 April 2010 with new material on Chatter and social tools as well as U.S. Census case study

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salesforce.com
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2. U.S. Census Bureau
Increasing Response Rates for the Decennial Census
InformationWeek reports that Census CIO Brian
McGrath sees promise in cloud offerings, but he is
taking things slowly. The first use of cloud-based
offerings for the bureau was using a contacts
database from salesforce.com. The bureau has a
database of 170,000 partners that had been initially
planned to be hosted in house. However, problems
with the contract forced an alternative solution.
Salesforce.com was the alternative solution and the
database was rolled out in six weeks. Compared to
the months or years that the average government IT
project requires for deployment, the salesforce.com
database was deployed shockingly fast.
DailyTech.com, 1/22/2010
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
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3. IT really is “doing more with less”
Gartner:
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
But mandates of security, governance, and mobility continue
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4. 100% Cloud Cover?
“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
CIO, Bechtel Corp. www.networkworld.com/news/2008/102908-bechtel.html
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5. 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 Programmable User
Cloud Logic 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
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”
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6. Faster Results; Lower Risks; Predictable Costs
On-Premise Operations: Cloud Computing:
53% of software projects cost Average 49% ROI
189% of original estimate1 within 10 Months2
Fixed Costs and Variable Cost Aligned with
Excess Operating Business Value
Expenses
Value
Buying Function,
Value
not Infrastructure
Time
Minimal
Initial Cost
Upgrade Expense &
Up-front Capital Opportunity Costs
Expense & Delay
1
Standish Group, Chaos Report 2006
2
Third-Party CustomerSat Research on 4,165 Salesforce.com customers, February 2008
Single-Tenant vs. Multi-Tenant Architecture
Shared infrastructure
Other apps
App 2
App 1 App Server
App 3
App Server Database App Server
Database OS Database
OS Server OS
Server Storage Server
Storage Network Storage
Network Network
Single tenancy gives each customer a On a multi-tenant platform, all applications
dedicated software stack – and each layer run in a single logical environment: faster,
in each stack still requires configuration, more secure, more available, automatically
monitoring, upgrades, security updates, upgraded and maintained. Any improvement
patches, tuning and disaster recovery. appears to all customers at once.
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7. Why Multi-Tenancy Matters to Developers
Build strategic applications
Your Clicks
User Interface
Customize any aspect
Logic Upgrade when convenient
Your Code
Database Retain IP ownership
Metadata representations:
Rigorously partitioned data, logic and customizations for multiple customers
Coherent Code Base and Managed Infrastructure
Coherent Code Base and Managed Infrastructure
Cloud 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
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8. Cloud Development: reinvented, not just relocated
Cloud Integration: No Need for Rip/Replace
Mash-ups from Native Integration Developer
Native ERP
Web and Desktop Partner Toolkits
Connectors
AppExchange Connectors Ecosystem
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9. Cloud Integration: New Leverage for Knowledge
“This is process lite. It gives my business users what they want,
a unique app for each sales team, fundamentally reflecting their own personality.
“And yes, I get a single standard SAP integration. It’s a terrific success.”
–CIO, Fortune 500 Firm
Deployments
Sales
Sales 4 Months
Distributors (Oct ’06- Feb ’07)
Distributors
EMEA 1 Month
EMEA
Inside Sales (Dec ’06)
Inside Sales
AFS Global 5 Months
AFS Global
(Dec ’06 – May ’07)
Sales
Sales
SAP Back-end FLPR Field
FLPR Field 2Q07
Integration Sales
Sales
Customized for
Diverse Sales Groups
Cloud Integration: Family Service Agency / SFO
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
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10. 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)
Multi-Tenant Application Security
Apply Data
Login… Authenticate… Security Rules… View Filtered Content
Password security policies
Rich Sharing Rules
User Profiles
SSO/2-factor solutions
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11. Trust Through Openness
Full Public Disclosure
Live System Status
Security Best Practices
Historical Performance
May-July 2009
• 99.997% of planned
availability
• Continually narrower Amazon
maintenance windows
Google
Trust Through Openness
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12. 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.
Real-World Results: Green Manufacturing
Vetrazzo, a leader in the rapidly growing market of recycled glass countertops,
required an enterprise resource planning (ERP) system it could customize to
handle its unique manufacturing processes. The eco-friendly small business
lacked the budget and personnel required to purchase and implement a
traditional on-premise ERP system.
Without an IT department, executives wanted to avoid having to purchase and
manage hardware infrastructure. The company needed a Web-based solution
for its national staff that could handle anticipated growth.
With the help of salesforce.com partner The Claiborne Company, Vetrazzo
expanded on a prototype to build an ERP system customized to fit its
specific business processes. The company’s custom apps include Customer
Service and Order Management; Finished Goods Inventory Management;
Production Planning and Scheduling; Raw Materials Management; Shipping and
Logistics; Document Management, and Warranty Management.
Planned integration with Quickbooks will tie in financials.
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13. 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
How “The Cloud” Creates Communities
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
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14. 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
What Drives Web 2.0 in the Workplace?
Goals:
– Collaboration
– Creation
– Knowledge Identification
– Talent Motivation/Retention
Methods
– Knowledge Engineering
– Peer Tagging/Rating
– Networking
– Publication
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15. 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
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?
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16. 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?
This is the Leading Edge
Nothing is perfect…
…but some things are improving more quickly than others
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17. 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
’50s ’60s ’70s ’80s ’90s ’00s
Cloud Apps
Grid
& X Window
Computing
Platforms
e
nc
a
nd
ce
As
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
t…
e
nc
en
ra
em
ea
p
in
Ap
f
Re
Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries
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18. How Low Does the Bar Need to Go?
Best Practices and Pitfalls
• Adopting the Cloud does not mean starting over
• Retain what’s working: innovate and add value at Web speed
• Don’t settle for the least unsatisfactory solution:
treat the Cloud as a supermarket of services
• Preserving familiar pain is not a measure of success
• Moving existing complexity into the Cloud avoids short-term pain
• Mastering new developer models is a high-return investment
• Don’t apologize for doing what made sense two years ago
• Bandwidth has grown
• Customizability has grown
• Costs of doing things the old way are skyrocketing
• Don’t mistake the consumer Web for the enterprise cloud
• Expect high availability; robust security; deep customizability
• Demand clear commitments on data ownership and protection
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19. Clouds Put IT Spending Back in Balance
Conventional IT model front-loads
capital spending on infrastructure
– Debt service and depreciation charges
persist despite business contractions
– Future capacity must either be bought in advance,
or added later at higher cost with substantial
business disruption
The cloud enables preparation for upturn
– New systems can be built and tested with negligible
up-front investment
– Resulting systems can be rapidly scaled to respond to
improving conditions
– "It has been our repeated experience that business
uncertainty is inevitably accompanied by opportunity“
(Jack Welch, Letter to GE Shareholders, 1997)
Clouds Put IT Spending Back in Balance
Don’t think of the cloud as technology
– Virtualization
– Metadata customization
– Multi-tenancy
– 4G wireless
– SOA
– These are enablers, not guarantors
Think of the cloud as a commitment
– Negligible up-front capital
– Alignment of cost with value
– Maximal stakeholder engagement
– These are Business Solutions to IT’s Problems
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20. 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 the 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 on the SEC Filings section of the Investor Information section of our website 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.
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CIO M
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CEO N
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Thank you
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Gover twitter.com/petercoffee
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More information at
www.salesforce.com/cloudcomputing
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