1 The Enterprise Cloud Immediate. Urgent. Inevitable. Peter Coffee Director, Platform Research salesforce.com CE O Needs Operational Governable Affordable CIO M andates Productive Reliable Secure Platform as a Servic e
May 11, 2015
1
The Enterprise Cloud
Immediate. Urgent.
Inevitable.
Peter CoffeeDirector, Platform Research
salesforce.com
CEO Needs
Operational
Governable
Affordable
CIO Mandate
s
Productive
Reliable
Secure
Platform as a
Service
2
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 BureauIncreasing Response Rates for the Decennial Census
U.S. Census BureauIncreasing 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
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
4
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.
5
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”
6
Faster Results; Lower Risks; Predictable Costs
On-Premise Operations:
Upgrade Expense &
Opportunity CostsUp-front Capital
Expense & Delay
Variable Cost Aligned with
Business Value
Va
lue
Time
Cloud Computing:
Average 49% ROI
within 10 Months2
53% of software projects cost
189% of original estimate1
Buying Function,
not Infrastructure
Va
lue
1 Standish Group, Chaos Report 20062 Third-Party CustomerSat Research on 4,165 Salesforce.com customers, February 2008
Fixed Costs and
Excess Operating
Expenses
Minimal
Initial Cost
Single-Tenant vs. Multi-Tenant Architecture
Single tenancy gives each customer a
dedicated software stack – and each layer
in each stack still requires configuration,
monitoring, upgrades, security updates,
patches, tuning and disaster recovery.
On a multi-tenant platform, all applications
run in a single logical environment: faster,
more secure, more available, automatically
upgraded and maintained. Any improvement
appears to all customers at once.
Shared infrastructure
Other apps
Server
OS
Database
App Server
Storage
Network
App 1
Server
OS
Database
App Server
Storage
Network
App 2
Server
OS
Database
App Server
Storage
Network
App 3
7
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
Retain IP ownership
Why Multi-Tenancy Matters to Developers
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
8
Cloud Development: reinvented, not just relocated
Cloud Integration: No Need for Rip/Replace
Mash-ups from
Web and
AppExchange
Native
Desktop
Connectors
Integration
Partner
Ecosystem
Developer
ToolkitsNative ERP
Connectors
9
4 Months
(Oct ’06- Feb ’07)
1 Month
(Dec ’06)
5 Months
(Dec ’06 – May ’07)
2Q07
Deployments
“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
SAP Back-end
Integration
Customized for
Diverse Sales Groups
Sales
Distributors
Sales
Distributors
EMEA
Inside Sales
EMEA
Inside Sales
AFS Global
Sales
AFS Global
Sales
FLPR Field
Sales
FLPR Field
Sales
Cloud Integration: New Leverage for Knowledge
For the first time we have visibility into the effectiveness
of our client programs and the ability to set and track
metric-based benchmarks for client progress.
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)
Self-audits and tracking of clinician, program, and
division productivity
Automated reimbursement process though auto-
population of funder forms
� Client Intake
� Case Management
� Service Plans
� Client Outcomes
� Self-audits
Bob Bennett
CEO”
“
Cloud Integration: Family Service Agency / SFO
HIPAA-compliant EHR for mental health case management
10
• 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)
� Password security policies
� Rich Sharing Rules
�User Profiles
� SSO/2-factor solutions
Login… Authenticate…Apply Data Security Rules… View Filtered Content
Multi-Tenant Application Security
11
May-July 2009
• 99.997% of planned
availability
• Continually narrower
maintenance windows
Live System Status
Security Best Practices
Historical Performance
Full Public Disclosure
Amazon
Trust Through Openness
Trust Through Openness
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.
13
Are Your Customers Pulling Their Weight?
Ideas has been an unbelievable home run. We are loving
it―the voice of the customer is totally present at Starbucks
in a brand new way, thanks to the Force.com platform.
“
” Chris Bruzzo
CTO, Starbucks
� 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
How “The Cloud” Creates Communities
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
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
� 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
16
� 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
This is the Leading Edge
17
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
Appea
ranc
e
Em
erge
nce
Ascendance
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
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
19
� 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
Clouds Put IT Spending Back in Balance
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.
CEO Needs
Operational
Governable
Affordable
CIO Mandate
s
Productive
Reliable
Secure
Platform as a
Service
Thank you
[email protected]/petercoffeefacebook.com/peter.coffee
More information atwww.salesforce.com/cloudcomputing