Cloud computing economics, platform leverage, and power for community creation

1. Cloud Tools
for Connected Communities
Peter Coffee
Director of Platform Research
salesforce.com

2. Safe Harbor Statement
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-
looking statements including but not limited to statements concerning the potential market for our existing service offerings
and future offerings. All of our forward looking statements involve risks, uncertainties and assumptions. If any such risks or
uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results
expressed or implied by the forward-looking statements we make.
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our operating results and cash flows, rate of growth and anticipated revenue run rate, errors, interruptions or delays in our
service or our Web hosting, our new business model, our history of operating losses, the possibility that we will not remain
profitable, breach of our security measures, the emerging market in which we operate, our relatively limited operating
history, our ability to hire, retain and motivate our employees and manage our growth, competition, our ability to continue to
release and gain customer acceptance of new and improved versions of our service, customer and partner acceptance of
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documents are available in the SEC Filings section under Investor Information at www.salesforce.com/investor.
Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as
required by law.

3. IT had a very bad year
Global IT spending estimated down 5.2% during 2009
Spending won’t return to 2008 level until 2012
Half of CIOs will see zero growth or further cuts this year
– Gartner (informationweek.com, 26 Oct.)

5. 100% Cloud Cover?

6. “If you take the ideal
world, everything is
done as a service:
computing, storage,
software and
operations.”
“The risk for enterprises
that don't start a SaaS
migration strategy soon
is that their IT
organizational
structures will be a
competitive
disadvantage.”
Geir Ramleth
www.networkworld.com/news/2008/102908-bechtel.html
CIO, Bechtel Corp.

7. The Cloud as a Multi-Product Marketplace
Platform as a Service PaaS as Enterprise
“Servers as a Service”
(PaaS) for the Application Framework
Inquiring Developer
Virtual
Servers Programmable
Cloud Logic
Programmable User
Interface
Virtual
Servers Python/Java
Virtual
Application Server Real-Time Workflow Integrated Content
Servers & Approvals Library
Database as a Service Database as a Service Unlimited Real-Time
Customization
Granular Security &
Sharing
Infrastructure as a Service Infrastructure as a Service Infrastructure as a Service
~Familiar Developer Model β Offering Supports Large-Scale SaaS
Rapid Scalability Innovative Technology Deep-Dyed Multitenancy

8. What it Means to Promise “The Cloud”
Moving toward an ideal: “Zero, One, Infinity”*
0 On-premise infrastructure
Acquisition cost
Adoption cost
Support cost
1 Coherent and resilient environment – not a brittle “software stack”
∞ Scalability in response to changing need
Integratability/Interoperability with legacy assets and other services
Customizability/Programmability from data, through logic,
up into the user interface without compromising robust multi-tenancy
* From The Jargon File: “Allow none of foo, exactly one of foo, or any number of foo”

9. Enterprise Clouds Enable Deep Customization
Build strategic applications
Your Clicks
User Interface
Customize any aspect
Logic Upgrade when convenient
Your Code
Database Your IP under your control
Metadata representations:
Rigorously partitioned data, logic and customizations for multiple customers
Coherent Code Base and Managed Infrastructure
Coherent Code Base and Managed Infrastructure

10. Cloud Integration: No Need for Rip/Replace
Mash-ups from Native Integration Developer
Native ERP
Web and Desktop Partner Toolkits
Connectors
AppExchange Connectors Ecosystem

11. Integration in Practice
Customer Master
Invoicing/Billing Master
Order Master
Pricing Master
Product Master
Cast Iron Integration Appliance

12. Cloud Security: No Need for Excuses
Facility Security Network Security Platform Security
• 24x365 on site security • Fault tolerant external firewall • SSL data encryption
• Biometric readers, man traps • Intrusion detection systems • Optional strict password policies
• Anonymous exterior • Best practices secure systems mgmt • SAS 70 Type II & SysTrust Certification
• Silent alarm • 3rd party vulnerability assessments • Security certifications from Fortune 50
• CCTV financial services customers
• Motion detection • May 2008: ISO 27001 Certification
• N+1 infrastructure
“There are some strong technical security arguments in favor of Cloud
Computing… (Craig Balding, Fortune 500 security practitioner)

13. Transparency Surpassing Enterprise Norms
Full Public Disclosure
Live System Status
Security Best Practices
Historical Performance
May-July 2009
• 99.997% of planned
availability
• Continually narrower
maintenance windows Amazon
Google

14. Real-World Results: Financial Services
The Phoenix Companies sought a new CRM solution with flexibility, ease of use,
mobile accessibility, low-cost modification capabilities, minimal user training
requirements, and simplified integration with other apps.
Changeover to Salesforce CRM took less than two months. Working with
salesforce.com partner OKERE (now part of Fujitsu Consulting), Phoenix used the
Force.com platform to create customizations for contracts and underwriting.
Using the Force.com API, Phoenix integrated several legacy systems with
Salesforce CRM to provide consolidated, real-time access to information.
The Salesforce CRM implementation cost the company less than one-fourth of the
project’s original budget.
By streamlining communication between field and inside sales within Salesforce
CRM, Phoenix has reduced phone and email inefficiencies, boosted productivity,
and, in 2005, increased life insurance sales by more than 33%.
Following its upgrade to Salesforce CRM Unlimited Edition, Phoenix achieved 96%
user adoption.

15. Development Reinvented, not Just Relocated
Nucleus Research analyzed Force.com deployments: found
average 4.9 times faster development (range 1.5x-10x)
versus Java or .Net
– Custom objects
– Administrative tools
– Workflow engine
– Pre-tested platform
Galorath Inc. compared developers’ Force.com productivity to
Java development
– Requirements definition time reduced 25% due to rapid prototyping
– Testing effort reduced by (typically) more than 10%
– Development productivity of new code 5x greater
– Overall project cost 30-40% less
CustomerSat sampled more than 1,100 Force.com
development teams during summer 2009
– Average experience: 4 applications deployed to date
– Average project cost savings: 48%
– Average project acceleration: 5.1x

16. Enterprise Clouds Enable Powerful Connections
Build strategic applications
Your Clicks
User Interface
Customize any aspect
Logic Upgrade when convenient
Your Code
Database Build vital communities
Metadata representations:
Selectively shared data, logic and customizations for multiple customers
Coherent Code Base and Managed Infrastructure
Coherent Code Base and Managed Infrastructure

17. Family Service Agency of San Francisco
HIPAA-compliant EHR for mental health case management
50% reduction in time spent on paperwork,
reporting and reimbursement
Eliminated 2-month wait for County reports
Real-time tracking of individual client outcomes
(treatments adjusted accordingly)
Client Intake Self-audits and tracking of clinician, program, and
Case Management division productivity
Service Plans
Client Outcomes Automated reimbursement process though auto-
Self-audits population of funder forms
“ our client programshave visibility into set and track
of
For the first time we
and the ability to
the effectiveness
metric-based benchmarks for client progress.
” Bob Bennett
CEO

18. What are the Obamanomics of SaaS?
Conspicuous, quantified success stories and policy statements:
– “In a traditional IT procurement environment, it would have taken us
about six months to upgrade USA.gov to better meet the needs of our
citizens. However, in the cloud environment we are now able to do
upgrades in one day – giving us greater agility and saving taxpayers
approximately $1.7 million annually in computing infrastructure costs
associated with USA.gov.”
David McClure
GSA Associate Administrator
Office of Citizen Services and Communications
– “We will...work with industry to ensure cloud-based solutions are secure
and compliant thereby reducing duplication of security processes
throughout government.”
Casey Coleman
GSA CIO
gsa.gov, 9/15/2009

19. U.S. Census Bureau
Increasing Response Rates for the Decennial Census
Deployed a custom app in three months
Records, tracks and manages contacts and
activities between staff and external partners
App has scaled up as census goes active;
will unwind as process concludes
Manages 2,200 users: temporary workers
geographically dispersed at headquarters and
12 regional offices

20. Spring ’10 Release: Continuing Renovation
ANSWERS
– Harness the expertise of your community right on your Web site.
– Customers ask questions, experts answer, the community votes: the
best knowledge bubbles to the top.
CODE SCHEDULER
– Monitor and edit schedules either programmatically or through the UI
– Start processes at times that are most convenient
DATA MODELING
– Easily create up to three levels of master-detail relationships
– Pull data from all levels of your complex data model into your reports
AUTHENTICATED SITES
– Scale your public Web site for up to millions of authenticated users
– Eliminate code for registration and login

21. The Drucker Imperative
“The typical large organization, twenty years hence, will
be composed largely of specialists who direct and
discipline their own performance through organized
feedback from colleagues and customers.”
“It will be a knowledge-based organization.”
Peter F. Drucker, in The New Realities
…in 1989

22. Whose Knowledge Is It, Anyway?
User innovation decouples from corporations when:
– Some users have incentive to innovate
– Some innovators have incentive to share
– Diffusion of innovations is inexpensive
The user conversation will take place
– Users can readily find each other
– Users will turn to each other for affirmation
as well as for assistance
– You can host the conversation

23. Are Your Customers Pulling Their Weight?
“ Ideas has beenofan unbelievable home run. We areStarbucks
it―the voice the customer is totally present at
loving
in a brand new way, thanks to the Force.com platform.”
Chris Bruzzo
CTO, Starbucks

24. Handling Social Situations: February 10, 2010
merges social feeds into Gmail
USAToday says “iGeneration…has no ‘off’ switch”
– Research suggests teens “survive distractions…better than
we would predict by their age and their brain development.”
– Teens/tweens “don't remember a time without the constant
connectivity to the world that these technologies bring… [and]
everything is customized and individualized”
But same-day article also reports that
– “Desire to unplug has made an unexpected success out of
websites such as Web 2.0 Suicide Machine…
…that automate and turbocharge the otherwise laborious
manual process of scrapping your online self”

25. You Can Be Social…Safely
It’s hard to add security to a tool that shares by default
It’s possible to add social tools to a proven trust model

26. The Conversation Within
The friction-free marketplace
comes home:
– Employees are customers, too
• Career experience is a product
• Time on the job is a payment
– Employees seek value
• Factions go under the radar
• You can’t tell what they’re
really doing
The in-house conversation
will take place
– Harness the energy
– Focus the ingenuity

27. What Drives Web 2.0 in the Workplace?
Goals:
– Collaboration
– Creation
– Knowledge Identification
– Talent Motivation/Retention
Methods
– Knowledge Engineering
– Peer Tagging/Rating
– Networking
– Publication

28. To Everything There is a Season
’50s ’60s ’70s ’80s ’90s ’00s
Windows
IBM PC Windows XP
PC MITS Altair 3.x/9x/NT
Macintosh & Mac OS X
& Linux 1.0
DEC DEC Sun Sun/AMD
Sun/ILM
Mini Workstations x86 Servers
PDP-8 VAX 11/780 Render Farms
& Servers Niagara CPUs
Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries

29. ’50s ’60s ’70s ’80s ’90s ’00s
Cloud Apps
Grid
& X Window
Computing
Platforms
e
nc
da
en
sc
A
Windows
IBM PC Windows XP
PC MITS Altair 3.x/9x/NT
Macintosh & Mac OS X
& Linux 1.0
e
nc
ge
er
Em
DEC DEC Sun Sun/ILM
Sun/AMD
Mini Workstations x86 Servers
PDP-8 VAX 11/780 Render Farms
& Servers Niagara CPUs
…
e
nc
t
en
ra
em
a
pe
in
Ap
ef
R
Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries

30. This Is Not the Bleeding Edge
40% of IT execs have been using cloud computing for more than
three years
– 62% of surveyed firms plan to increase their use of SaaS this year
– 60% project SaaS in vertical apps within two years
By 2011, more than 70% of U.S. enterprise data centers will hit the
wall on power, cooling and space:
– More than 1/3 of companies expect IT investment reductions in 2009
– Outsource data-center demand is up 14% in the last 12 months;
capacity has grown by only 6%
– Data center costs have doubled in many markets; in London, they're up
sixfold
37% of firms are replacing current on-premise systems with SaaS

31. This is the Leading Edge
Nothing is perfect…
…but some things are improving more quickly than others
If “the cloud can’t do that” today, what about next year?
Can today’s mature traditional models say the same?

32. Peter Coffee
Director of Platform Research
pcoffee@salesforce.com Q&A?
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