The agreement should help Salesforce increase its international presence without having to build its own data centers in countries that have data sovereignty laws, which require that data stays in-country. It’s expensive to build their own, so they are turning to a public cloud infrastructure provider like Amazon to do the heavy lifting for them.
Salesforce CEO Marc Benioff spoke glowingly of AWS. “There is no public cloud infrastructure provider that is more sophisticated or has more robust enterprise capabilities for supporting the needs of our growing global customer base,” he said in a statement.
It’s worth keeping in mind, however that Salesforce also has a deep relationship with Microsoft — and CEO Satya Nadella appeared on stage at Dreamforce, Salesforce’s massive customer conference last fall.
But the relationship has a flip side and the companies also compete with one another. R Ray Wang, who is principal at Constellation Research, points out that this announcement should help Salesforce compete with Oracle and Microsoft overseas.
It also helps Salesforce keep its options open so it doesn’t rely too much on any single vendor, especially Microsoft, while building on its existing relationship with AWS.
“The experiences in the IOT cloud, Heroku, RelateIQ, have shown that the workloads Salesforce customers need can be reliably delivered by Amazon at an ever decreasing unit cost,” Wang explained.
Al Hilwa, an analyst with IDC who covers enterprise cloud, says we shouldn’t read too much into this and it could be purely about negotiating a better price.
“What we are likely seeing here is some new negotiated terms and pricing between the two firms. A number of Salesforce apps can and will run on AWS,” Hilwa told TechCrunch.
AWS announced that the deal includes Sales Cloud, Service Cloud, App Cloud, Community Cloud, Analytics Cloud and more.
We are seeing increasing partnering among the big enterprise companies as each tries to walk the line between competing and cooperating. Just last week SAP announced a deeper cloud deal with Microsoft. As Nadella has said, no platform can stand alone anymore because customers are demanding interoperability.
This latest deal is just another case of Salesforce covering its bases and providing a cost-effective way to expand its markets overseas without getting so chummy with Microsoft that it becomes overly reliant on them.