Dec16

The cloud transformation cometh

The New York times reports that cloud momentum continues to swing upwards, giving a nod to Marc Benioff, founder of Salesforce.com for being one of the pioneers in the Software-as-a-Service (SaaS) sector.

In a $440 million deal, NYT confirmed that I.B.M. would buy DemandTec, a cloud-based vendor of data analysis software. This follows the announcement by SAP that it would purchase Success Factors, a cloud-based human resource software company, for $3.4 billion.

This prompted Benioff to ask: “Do you think it will transform them?”

The answer, in his opinion, is yes, especially as his company is set to make $3 billion in revenue in 2012.

This point is amplified if you consider that the NYT estimates the cloud sector could exceed $2.7 trillion in spending for the same year. A gigantic number. Big companies are expected to follow SAP and I.B.M into this sector with the industry peak expected sometime around 2020.

Oracle, on the other hand, is finally confirming (publicly) that they need a cloud, too, but say theirs will be a little different than the “roach motel” (their term!) suite of products offered by Salesforce.com.

“Ours will support full interoperability,” said Mr. Ellison.

Meanwhile, Salesforce.com continues to transform itself into a social platform with applications like Chatter, an internal communications product that bears similarity to Yammer, Facebook and SharePoint. The goal, says Salesforce, is a less formal and faster-moving workplace.  It even got Toyota to start using it internally with their employees and customers.

But the big heavyweight in cloud software, VMware, which powers the Virtual Internet cloud platforms, is not a bystander in the social space. It recently bought Socialcast, a social software business.

2012 thus looks set to become a convergence point for the cloud, mobile devices and social engagement.  Salesforce.com hopes it can keep its lead in the SaaS sector. We shall see!

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