| | | Salesforce Bases New Service on Amazon’s Cloud
The business software company’s IoT Cloud is expected to launch after midyear
By Robert McMillan
The Wall Street Journal
May 10, 2016 5:51 p.m. ET
Salesforce.com Inc. is building a new service on Amazon.com Inc.’s cloud computing facilities, a notable shift for a company that generally has used its own computing infrastructure.
In doing so, the San Francisco-based business software provider joins other companies, such as Netflix, offering services that run on Amazon Web Services even as they compete with the online retailer’s other divisions.
Salesforce’s Internet of Things Cloud, introduced last fall, is designed to help corporations make sense of the rising tide of data generated by everyday devices outfitted with computing and communications capabilities, such as smart phones, wearable devices and industrial sensors. The service is being tested by a handful of unnamed Salesforce customers and is expected to launch sometime after midyear, said Adam Bosworth, the executive vice president of Salesforce’s IoT Cloud.
The service is one of a wave of such offerings from Amazon itself, as well as General Electric Co., Microsoft Corp. and others. Such services are designed to track billions of digital events daily and extract useful information that, for example, could help customer support representatives diagnose problems.
Salesforce typically builds new services on hardware it operates in its own data centers. However, it has used Amazon Web Services as well. In 2010, for example, Salesforce bought Heroku, a company based on Amazon Web Services that sells services for software developers.
Companies that operate their own data centers can take weeks or months to add new hardware as their needs grow. Using a so-called public cloud service such as AWS, though, they can bring new servers and storage devices online with the click of a button.
That kind of flexibility made Amazon’s cloud service a good choice to handle the “uncontrolled exponential growth” of a service that consumes as much data as Salesforce’s new product, Mr. Bosworth said. “We did it because we were growing very fast,” he said. “These are big and so you’re using a lot of resources.”
“We had to have the safety valve of a public cloud or public clouds to do what we were doing,” he added.
Amazon didn’t immediately respond to a request for comment.
Amazon’s cloud business is fast becoming a corporate computing juggernaut. The company reported sales in its cloud division topped $2.5 billion in the most recent quarter, growing by 64% year over year.
But Amazon’s rapid growth is also eliciting concern from some customers who don’t want to be locked into a single cloud computing vendor. Earlier this year, Apple Inc. agreed to start using Alphabet Inc.’s rival cloud computing service, Google Compute Cloud, in addition to AWS.
Salesforce has designed its IoT Cloud to run on “any public cloud,” as well as on servers within its own data centers, Mr. Bosworth said. “Where we go with this is probably a mix, because there are probably customers who want data to be controlled within our own data centers,” he said.
Salesforce would be wise to avoid being locked into AWS, said Yefim Natis, a vice president with research firm Gartner Inc. But he points out that other companies, including Salesforce’s own Heroku, have successfully competed with Amazon while using its cloud platform. “I don’t think there is a huge platform conflict in this,” he said.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
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