Malamud says Salesforce will be the place where next-generation apps will be built, providing a legitimate threat to Amazon moving forward.
"It's a legitimate theory, but it's more of a longer term play," says David Vellante, chief analyst at research firm The Wikibon Project, about the Salesforce.com-Amazon rivalry. The two companies are not really direct competitors right now, he says. They're both cloud-based, but AWS at its core is about providing fast, easy and cheap access to virtual machines, storage and hosted applications in its IaaS cloud. Salesforce.com is a SaaS that is attempting to build up its accompanying PaaS.
Amazon's bigger near-term competitors are the growing cavalry of IaaS providers looking to steal business from the company, he says. Google, Microsoft and Rackspace (with its OpenStack platform), as well as VMware, HP, Dell, Joyent, Terremark and Savvis, are just some of the whole range of IaaS providers looking to bite into Amazon's market share that pose a more immediate threat to AWS.
Robert Mahowald, research vice president at IDC who leads the software as a service (SaaS) and cloud services practice, agrees with Vellante. "It's not necessarily where the companies are today, but it's certainly an aspiration of Salesforce," he says. But he's also on board with Malamud's core premise of "follow the data."
Applications that run in the cloud are fundamentally more important than the infrastructure they run on, so in that sense Salesforce has an advantage in being able to offer customers products, services and platforms that leverage data already in its cloud.
But AWS is a heavy-hitter in the cloud, too. Through partnerships with big enterprise software giants like SAP, Oracle and Microsoft, AWS allows customers to migrate their existing enterprise software licenses to Amazon's cloud and let AWS worry about all the underlying infrastructure.
Salesforce.com has a different business model: The company isn't pushing customers to migrate their SAP, Oracle and Microsoft apps into its cloud; they want customers to be all-in with its own cloud. So far, the company has done an extraordinary job capturing the CRM market, but existing business apps aren't being migrated into Salesforce's cloud.
To Mahowald, that means the Amazon vs. Salesforce debate comes down to a new vs. existing apps debate. Amazon has everything in place to give customers the opportunity to outsource their packaged software onto its cloud, something enterprises are becoming more and more comfortable with. Salesforce wants to be the place where the enterprises' next-generation business apps are built and stored.
The problem for AWS is that there are increasingly more and more competitors offering similar IaaS services. To date, Amazon has simply done it better than its competitors, Vellante says -- it out-innovates competitors, has a broader range of services and continually lowers its prices. It's tough for competitors to keep up, but a crop of providers are trying.
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