Salesforce.com legitimizes cloud strategy with Heroku purchase

Salesforce.com acquires Ruby on Rails platform Heroku for $212 million, increasing its stake in the cloud development game and raising questions about the future of VMforce.

SAN FRANCISCO -- Salesforce.com's decision to spend $212 million on Heroku, a red-hot cloud development platform, could help the Software as a Service pioneer fend off incursions from Microsoft Azure and keep the company at the forefront of cloud-based services.

Which [platform] will Salesforce.com prefer: The one they own, or the one they share with VMware?

Geva Perry, cloud expert and blogger

Salesforce.com has already fielded Force.com, its homegrown and proprietary cloud platform, and earlier this year launched the VMware-partnered VMforce for Java development. But Force.com didn't exactly set the world on fire and the much-hyped VMforce is still not in public beta.

Meanwhile, new cloud services like Microsoft Azure are picking up steam, threatening to soon make Salesforce.com the outlier instead of the leader. So Salesforce.com turned to Heroku, which claims over a million Ruby developers that write and run apps directly on Amazon Web Services (AWS). Heroku maintains the development environment and integrates other cloud services.

It's been a hit. Heroku now has more than 100,000 applications running on its servers and software, mostly running the sort of apps that Ruby on Rails is good for, like advanced Web services, social gaming and websites. The acquisition will help shore up Salesforce.com's position as a legitimate Platform as a Service (PaaS) provider. Many have seen the company's environment as too closed, too proprietary and limited in its utility.

"Developers didn't flock to it as it's seen as a way to build customization around Salesforce.com, not as a standalone platform," said Geva Perry, cloud expert and blogger.

Other analysts echoed this sentiment.

"One of the premises of this acquisition is that Salesforce.com will work on building credibility with developers who have historically seen it as a lightweight platform with too many controls over the database queries," said Al Hilwa, program director for application development software at IDC.

James Lindenbaum, Heroku's co-founder, said the platform will remain exactly as it is for now, quashing rumors that it may branch out to run on Salesforce.com infrastructure as well as AWS.

The idea of running on Salesforce.com and taking advantage of its PCI DSS-compliant infrastructure for e-commerce was one way Heroku could diversify, but such a move is not in the works, Lindenbaum said. Heroku will continue to follow its existing development schedule, now backed with Salesforce.com's much larger piggy bank.

"If anything, our roadmap will speed up," he said. Heroku has raised around $30 million in venture funds over three years.

What about VMforce?
The Salesforce.com-Heroku deal raises interesting questions about the future of VMforce, the PaaS that Salesforce and VMware cooked up. Heroku and VMforce appeared to be "on a collision course" before the acquisition, as both were on a path to supporting other languages, Perry said.

One of the premises of this acquisition is that Salesforce.com will work on building credibility with developers.

Al Hilwa, program director for application development software at IDC

"It's a dilutive effort to do both," he added. "Owning Heroku is strategic to Salesforce. Which will they prefer: the platform they own, or the one they share with VMware?"

For now, the companies say the two platforms serve different markets. VMforce is for Java developers building enterprise apps, while Heroku is for Ruby developers building social Web 2.0 apps. They could, of course, keep the markets separate, but that costs more marketing dollars and complicates their story.

In the meantime, Salesforce.com's existing user base will have immediate access to Heroku, a pool of some 80,000 large and small organizations. Salesforce.com states that Heroku will be a major branch of its cloud strategy and will also include another new offering, Database.com. (Editor's note: For more on Database.com, be sure to see our interview with Force.com VP Ariel Kelman.)

This is a public portal into Salesforce.com's own Oracle RAC-powered infrastructure, apparently segregated from Salesforce.com's production environment, and clearly aimed at taking a slice out of the growing database services market that includes giants AWS and Microsoft Azure.

Carl Brooks is the Senior Technology Writer for SearchCloudComputing.com, and Jo Maitland is SearchCloudComputing.com's Executive Editor.

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