Having the Cloud Conversation: Why the Business Architect Should Care

Having the Cloud Conversation:Why the Business Architect Should Care

Peter Coffee

Director of Platform Research

salesforce.com

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

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Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as

required by law.

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.)

100% Cloud Cover?

www.networkworld.com/news/2008/102908-bechtel.html

“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.

Infrastructure as a ServiceInfrastructure as a Service

Virtual

Servers

Virtual

Servers

Virtual

Servers

Virtual

Servers

Virtual

Servers

Virtual

Servers

Platform as a Service

(PaaS) for the

Inquiring Developer

“Servers as a Service” PaaS as Enterprise

Application Framework

Infrastructure as a ServiceInfrastructure as a Service

Database as a ServiceDatabase as a Service

Python/Java

Application Server

Python/Java

Application Server

~Familiar Developer Model

Rapid Scalability

β Offering

Innovative Technology

Supports Large-Scale SaaS

Deep-Dyed Multitenancy

Database as a ServiceDatabase as a Service

The Cloud as a Multi-Product Marketplace

Unlimited Real-Time Customization

Granular Security & Sharing

Programmable Cloud Logic

Real-Time Workflow& Approvals

Programmable User Interface

Integrated Content Library

Infrastructure as a ServiceInfrastructure as a Service

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”

What it Means to Promise “The Cloud”

Faster Results; Lower Risks; Predictable Costs

On-Premise Operations:

Upgrade Expense &

Opportunity CostsUp-front Capital

Expense & Delay

Variable Cost Aligned with

Business Value

Valu

e

Time

Cloud Computing:

Average 49% investment recovery

within 10 Months2

53% of software projects cost

189% of original estimate1

Buying Function,

not Infrastructure

Valu

e

1 Standish Group, Chaos Report 2006

2 Third-Party CustomerSat Research on 4,165 Salesforce.com

customers, February 2008

Fixed Costs and

Excess Operating

Expenses

Minimal

Initial Cost

Coherent Code Base and Managed InfrastructureCoherent Code Base and Managed Infrastructure

Your Clicks

Your Code

User Interface

Logic

Database

Metadata representations:

Rigorously partitioned data, logic and customizations for multiple customers

Build strategic applications

Customize any aspect

Upgrade when convenient

Preserve IP control

Enterprise Clouds Enable Deep Customization

Cloud Integration: No Need for Rip/Replace

Mash-ups from

Web and

AppExchange

Native

Desktop

Connectors

Integration

Partner

Ecosystem

Developer

ToolkitsNative ERP

Connectors

• SSL data encryption

• Optional strict password policies

• SAS 70 Type II & SysTrust Certification

• Security certifications from Fortune 50

financial services customers

• May 2008: ISO 27001 Certification

Platform Security

• Fault tolerant external firewall

• Intrusion detection systems

• Best practices secure systems mgmt

• 3rd party vulnerability assessments

Network Security

• 24x365 on site security

• Biometric readers, man traps

• Anonymous exterior

• Silent alarm

• CCTV

• Motion detection

• N+1 infrastructure

Facility Security

Cloud Security: No Need for Excuses

“There are some strong technical security arguments in favor of Cloud

Computing… (Craig Balding, Fortune 500 security practitioner)

May-July 2009

• 99.997% of planned

availability

• Continually narrower

maintenance windows

Live System Status

Security Best Practices

Historical Performance

Full Public Disclosure

Amazon

Google

Transparency Surpassing Enterprise Norms

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: Health Care

� CRC Health—the nation's largest provider of drug and alcohol treatment

services—acquired the country’s largest youth treatment provider. The combined

organization required a platform to manage patient intake, track Web entities, and

streamline operations to increase revenue.

� The company used ACT!, spreadsheets, and other proprietary systems to

manage extensive patient data. Only one call center operator could open the

spreadsheet at a time, making the process inefficient, opaque, and unscalable.

� The company developed a customized user interface on Force.com for 12 users.

With help from salesforce.com partner Appirio, CRC Health extended the

application to broadly leverage the platform.

� Security levels are matched to what’s required to comply with HIPAA and other

industry regulations. Open APIs enable tight integration with legacy tracking

systems, Microsoft Outlook, eFax, and other third party apps. Web marketing

effectiveness tracking within Salesforce CRM indicates to the dollar what is

performing and what is not.

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

zSeriesS/3904300S/370S/360IBM 701Mainframe

Sun/AMDx86 Servers

Niagara CPUs

Sun/ILMRender Farms

SunWorkstations

& Servers

DEC

VAX 11/780

DEC

PDP-8Mini

Windows XP

& Mac OS X

Windows

3.x/9x/NT

& Linux 1.0

IBM PC

MacintoshMITS AltairPC

’00s’90s’80s’70s’60s’50s

To Everything There is a Season

App

eara

nce

Em

erge

nce

Asc

enda

nce

Ref

inem

ent…

zSeriesS/3904300S/370S/360IBM 701Mainframe

Sun/AMD

x86 Servers

Niagara CPUs

Sun/ILM

Render Farms

SunWorkstations

& Servers

DEC

VAX 11/780

DEC

PDP-8Mini

Windows XP

& Mac OS X

Windows

3.x/9x/NT

& Linux 1.0

IBM PC

MacintoshMITS AltairPC

Grid

ComputingX Window

Cloud Apps

&

Platforms

’00s’90s’80s’70s’60s’50s

Peter CoffeeDirector of Platform Research

[email protected]

facebook.com/peter.coffee

twitter.com/petercoffee

Q&A?