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Friday, September 3, 2010

Why Is Salesforce Being Compared to Amazon EC2?

Posted by Jeff Lu on April 1, 2009

I’ve been extremely busy recently.  Lot’s of changes going on at Cascadia right now.  In a nutshell, I have a lot more responsibility and I’m going to be a lot busier so frequency of blog posts might suffer.  I have 3 posts in draft mode and this current post I can hardly take credit for.

So I recently sent a friend of mine who works at Amazon this TechCrunch post about Salesforce’s “Efficient Cloud” and I thought his response was interesting.  Would love to get other people’s thoughts.

I think Salesforce comparing themselves to AWS (Amazon Web Services) is a joke because AWS hosts apps like Salesforce.  Now if they did a side-by-side comparison of their own implementation of Salesforce.com and building salesforce.com using AWS, then thats a legitimate comparison.
AWS basically provides infrastructure tools/hardware to build applications, services, websites of any kind.  The tools we offer are things like databases, messaging service, hard-drive like storage, content hosting (like Limelight and Akami) and our main thing, EC2, which is basically your own server that can run Linux, IBM or Windows OS.
Salesforce.com provides a specific service that utilizes all of the things I listed above (databases, hard drives, software, etc) to provide a specific offering to their customers (CRM I think?).  They chose to host this service on their own servers but if they were a small startup with not as much funds, they coulda used AWS to host this service until they found it cheaper to host it themselves.
Google’s cloud offering is kind of a mix between salesforce.com and AWS.  They have stuff like GMail, Docs, Spreadsheets, which is no different from salesforce.com.  You do all your work in the browser, they process and save all the data for you.  They also have an AppEngine offering where you can write applications in Python and they will host/run it for you on their servers.  Only caveat is that the applications have to be written in Python.
Microsofts cloud offering is a bit similar to AWS except that they only provide MS products like Windows Server, SQL Server and IIS.  So you can build any type of application you want on their platform as long as you use MS products.

The funny thing is that cloud computing is definitely the future but its not even a defined term yet.  AWS is basically providing you with a computer that can scale to any size at any moment.  For example, SmugMug uses AWS for photo processing.  Sunday nights and Monday mornings are their busiest times since everyone is uploading pics from the weekend at that time.  Now if they hosted their own software to process images, they would have to have enough hardware capacity to handle that Sunday/Monday load.  The rest of the week though, they only process about 30% of the same capacity.  So its like wasted hardware Tues-Sat ya know?
MS is providing the same but only with MS software.
Salesforce is only providing you with one specific piece of software.  They’re just using the word “cloud” 6 times a sentence because of hype.  All web-hosted email has been a “cloud service” since day 1.  Hotmail, Yahoo, GMail, AOL.
Mint.com is another example that is exactly the same as salesforce.com They host all of your data, process it all, etc.

While I think TechCrunch did fairly note that their comparison was not entirely comparing apples to apples, I do hear/read a lot of people bunching “cloud computing” companies together and think they are all the same.

Filed Under: Uncategorized

  • Jon Roth
    There does seem to be a great deal of buzzword lumping these days (perhaps a lot of it perpetrated by bankers who need to try to define new phases/paradigm shifts in order to frame an argument around where a market is headed, like "Web 3.0," which seems to mean something slightly different to everybody). AWS itself is amazing to me, though, in terms of the computing power it provides at a reasonable cost and the ways in which it can power an entire business based on a cost structure that simply didn't exist a few years ago. For example, we met with an online video editing company based in San Francisco last year that uses AWS and the CEO and I discussed the fact that even 5 years ago, the kind of computing power he needs on demand would have required a capital investment in servers and "power, pipe and ping" at a hosting facility (think something like at least a 10x13 cage at IBM/Equinix) - expensive!. In fact, so expensive, I'm not sure he would have been able to launch the business and open it to the public without raising a significant amount of outside capital before even opening his doors. So not only is the ability to scale to any size at any moment offered as offered by AWS a great innovation, this innovation powers innovation itself by fueling new business models that couldn't otherwise get off the ground from an expense standpoint.
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