As Salesforce rushes to achieve its “dream” of reaching $10 billion in annual revenue, it will work a lot more with Amazon Web Services, said Salesforce chief executive Marc Benioff. Reaching that sales goal and tighter ties with Amazon may or may not be related.
“We have a great relationship with Amazon, they’re a huge user of Salesforce,” Benioff told analysts on the company’s first quarter earnings call Wednesday.
“Jeff Bezos and I have a great meeting of the minds on the future of cloud and we want to grow that and expand that strategically,” Benioff said in response to a question from an analyst on the conference call.
Bezos is, of course, the founder and chief executive of Amazon.com (AMZN) the retailer and parent company of AWS, the market leader in public cloud services. Public cloud providers like AWS, Microsoft (MSFT) Azure and Google (GOOG) Cloud Platform, run massive arrays of servers, storage and networking and rent portions of them to customers.
Amazon, Benioff continued, has done a “spectacular job” defining the public cloud or infrastructure-as-a-service market.
“They’re doing more than $10 billion a year, and we’re happy to be tightly aligned with them. As we head to our developers conference and Dreamforce, you’ll see more announcements between Salesforce and Amazon,” he said. Dreamforce is Salesforce’s annual customer event in October.
Hmmm.
There are two sides to this love fest. Amazon, apparently, is using a lot more of Salesforce software as well. Salesforce president Keith Block said that Amazon now uses Salesforce (CRM) software company wide.
Official spokespeople from Amazon and Salesforce would not comment further, but a source close to Amazon confirmed that the Seattle-based company recently expanded a deal with Salesforce so that all employees have access to all of Salesforce’s software. There are different Salesforce modules for entering and tracking sales leads and managing marketing campaigns, among other things.
It is conceivable that Amazon could be the”nine figure” software deal that Block said closed this quarter.
Salesforce Project Sayonara Weighs Move off Oracle
This profession of love for the Amazon cloud by the Salesforce’s leaders is both surprising and not. Six years ago, Salesforce bought Heroku, the software development specialist that runs entirely on AWS. Salesforce’s new Internet of things or IoT Cloud is based on Heroku, which means it also runs on AWS.
But that’s not all: Benioff also said newly announced pieces of the Salesforce’s marketing cloud run on AWS. A spokeswoman reached for comment, noted that SalesforceIQ sales software for small and medium businesses, also runs on AWS.
So what’s the big deal? Well, Salesforce has traditionally run all of its non-Heroku based business software, its massive “sales cloud,” for example, on its own data centers, using Oracle’s database and other software. Anything that’s running on AWS, by definition, is now outside of Salesforce’s data centers. That’s a pretty major strategic shift and shows yet another company revisiting how it’s deploying the software it sells to customers.
The argument for moving to a public cloud is that it gives companies flexibility to add or delete resources in respond to changing needs and it can be less expensive than running more IT internally.
Dropbox famously went the other way, announcing a few months ago that it had moved 90% of its technology from AWS into its own data centers.
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Whether this strategic shift also means Salesforce is reducing its dependence on Oracle (ORCL) databases to use less pricey open-source alternatives, remains a mystery, although a betting person would say yes.
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In the grander scheme of things, tighter ties between Salesforce and Amazon are of note because some pundits think that Amazon may want to push beyond basic infrastructure to offer business software. That would mean competing with companies like Salesforce, Microsoft, and Oracle. Given that most of those business software companies, with the exception of Salesforce,also are trying to take public cloud business from Amazon, this sets up an interesting chess game.
Note: This story was updated at 9:39 p.m. EDT to reflect that Salesforce said it closed one nine-figure deal this quarter. It has done three such deals in total.
