Salesforce.com (NYSE: CRM) is signaling it wants to start talking to IT departments after acquiring a cloud application platform and partnering with an IT service management platform, the San Francisco-based firm announced this week at its Dreamforce conference.
The company wanted attendees to walk away with the message that it was now a cloud computing platform. In a bid to make that re-branding a reality, it announced the acquisition of San Francisco-based Heroku for US$212 million. The small firm founded in 2007 is a Ruby on Rails development platform currently supporting 105,000 applications.
Salesforce.com also announced the launch of RemedyForce Cloud, a cloud platform for IT service management by partnering with Houston-based BMC Software Inc. Features included in the new offering include IT Service Desk, a re-work of the Service Desk available on Force.com. Also included is Salesforce Chatter, mobile access, reporting and analytics.
The announcements at Dreamforce signal Salesforce.com’s efforts to woo developers, find wider distribution and collect more intellectual property, says Rob Mahowald, research vice-president for cloud services at IDC Corp. This is a shift from Salesforce.com’s former strategy of focusing on line-of-business workers.
“All of a sudden, they’re tackling problems that are much more important to IT buyers,” he says. “They want an in-road to talk to the IT department.”
Salesforce.com is betting that Ruby will be an increasingly popular programming language for applications built in the cloud, CEO and chairman Mark Benioff told the audience during his keynote. There is a community of one million Ruby developers, he says, and the code has built popular Web applications such as Groupon, Hulu, and Twitter.
“Developers love Ruby, they relish Ruby, it’s a huge advancement,” he said. “We’re so impressed with Heroku that we’re just going to supercharge them going forward.”
The company will maintain its independent structure, he added. Staying at the helm will be CEO Byron Sebastian.
“We think this will really accelerate the adoption of cloud platforms,” Sebastian says. “Much more quickly than if this acquisition hadn’t happened.”
Heroku’s purchase will curry favour with the Ruby developer community, IDC’s Mahowald says, as the small firm is seen as a leader in determining how Ruby code is implemented. The language itself will likely stick around for the foreseeable future.
“There seems to be acceptance that this is an easy, flexible (Relational State) REST-based language that is well supported,” he says. “A lot of Web 2.0 applications could be easily crafted in this language.”
The new RemedyForce offering will make IT service management affordable for smaller to mid-level enterprises, said Bob Beauchamp, CEO of BMC Software.
“IT Service Management is something that all very large enterprises understand and they have to have it,” he said. “But it’s been expensive for other enterprises to get it.”
In some ways, Salesforce.com’s move to offer some IT services puts it in direct competition with big players like IBM as well as HP, which acquired EDS in 2008 to become the second-largest IT services provider. But Salesforce.com’s target customer for its IT services will be smaller enterprises, with a focus on ease-of-use for its applications.
“There’s a lot more flexibility put in the hands of business users,” Mahowald says. “A lot of small businesses would say that’s a great thing.”
Roadmap not spelled out
Salesforce.com executives weren’t ready to offer a clear roadmap of where the Heroku acquisition was heading in terms of integration of services. Businesses can register with Heroku.com just as they could in the past for application development, is all co-founder and executive vice-president Parker Harris would say. He also pointed to Heroku’s already existing, online road map.
“Turn everything on its head and think of us as an add-on to Heroku,” Harris says. “As a customer you’ll trust the two services to work together.”
“You’ve got to think for US$200 million they’ve got some pretty solid ideas there,” he says. “Users will probably go to Force.com as a jumping off point for building on Heroku.”
The Heroku acquisition is expected to close Jan. 31, 2011.