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On demand CRM provider hopes two major new announcements will help its "platform-as-a-service" strategy live up to its potential

Salesforce.com, as it name and stock ticker symbol (CRM) suggest, is best known for its salesforce automation and customer relationship management application. But the company has for some time been trying to expand its remit, aspiring to be the world’s leading business cloud computing provider.

To that end, in 2007 it launched Force.com. Ahead of its time in many respects, Force.com is what is now described as a “platform-as-a-service” (PaaS) offering, allowing developers to build applications directly on top of Salesforce.com’s hosted infrastructure.

The company does not break out how much revenue it earns from Force.com, but in 2009 analyst company Gartner estimated that Force.com had “over 1,000” customer accounts.

This is by no means a failure, but set against the explosive growth of the CRM application – which added 4,800 new customers in the last financial quarter alone – it is clear the Force.com vision has yet to ignite the market with the same enthusiasm.

However, Force.com is still a work in progress, and at the company’s Dreamforce customer event in San Francisco in December 2010, it announced two significant new additions to its PaaS strategy.

The first is an entirely new service, named Database.com, which CEO Benioff describes as "the world's first enterprise cloud database".

It is built on Oracle's relational database technology, and can be hosted on cloud-based infrastructure services including Amazon's EC2 and Microsoft's Azure as well as Salesforce.com’s own platform.  

When it launches in 2011, Benioff explains, it will allow customers to use Database.com as the back end for applications hosted both on-premise and in the cloud. Open APIs also provide compatibility for applications developed for smartphone and mobile devices.

“Databases need to move into the cloud, just like everything else," argues Benioff. He asserts that the scalability offered by the cloud, together with Database.com's "aggressive" pricing model, make 'database as a service' an attractive proposition for its customers. (Interestingly, Benioff has tried to launch a web-based database company before, but it failed to survive the dot com crash).

Some commentators suggested the release places Salesforce.com in competition with Oracle. In truth, it makes the SaaS provider an Oracle reseller, if anything bringing the two companies closer together.

“We have a great relationship with [Oracle]," explains Benioff, who worked at that company for 13 years. He describes Oracle CEO Larry Ellison, an early investor in Saleforce.com, as his "mentor". "I honestly don’t see us as competitors. I’m sure some people do, but I don’t see it," he insists.

That is not to say they always see eye-to-eye. In the summer of 2010, Ellison described Salesforce.com's multi-tenancy approach as "horrible" from a data security perspective.

Benioff refutes the suggestion that a database in the cloud is less secure than an on-premise alternative. He cites the ongoing Wikileaks embassy correspondence leaks fiasco as evidence that on-premise does not always equal greater security.

Funnily enough, this argument is reminiscent of one Larry Ellison was making back when he was a vociferous advocate of what was then known as ‘network computing’. "If you think the data on your PC at home is more secure than in an Oracle database on the Internet, you are mistaken,” Ellison said in 2000.

Another new development in Salesforce.com’s PaaS strategy is the $212 million acquisition of Heroku, a US-based start-up that provides a hosted development environment for applications built in the Ruby programming language.

At present, Heroku hosts more than 106,000 applications on its platform, which is basd on Amazon’s EC2 cloud environment, and counts US consumer electronics giant BestBuy among its customers.

Salesforce.com says that supporting Ruby, popular among web developers, is the logical expansion of the Force.com platform. The addition has not come cheap, however: the $212 million price tag values Heroku's 25 to 30 employees at around $8 million each.

All of this, Salesforce.com hopes, will help unlock Force.com’s potential as an all-purpose cloud platform for business.

For the mean time, however, is still the CRM application that gets the most attention, and not just from customers.

In December, software titan Microsoft announced that it is offering Salesforce.com (and Oracle CRM On Demand) customers rebates of $200 per license for switching to its own Dynamics CRM Live service.

Characteristically, Benioff dismisses that move as a sign of weakness on Microsoft's part. "They're nervous”, he remarks, arguing that Microsoft is at risk of having "its cash cow exploded" by 'disruptor' software companies such as his own.

"There are forces out there that are trying to stop us," he asserts. "When you transform an industry and try to create something new, there's always an old industry trying to do everything to stop this."