Cloud Tools

for Connected Communities

Peter Coffee

Director of Platform Researchsalesforce.com

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.

The risks and uncertainties referred to above include - but are not limited to - risks associated with possible fluctuations in 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 the AppExchange, successful customer deployment and utilization of our services, unanticipated changes in our effective tax rate, fluctuations in the number of shares outstanding, the price of such shares, foreign currency exchange rates and interest rates.

Further information on these and other factors that could affect our financial results is included in reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time. These 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.

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.)

100% Cloud Cover?

www.networkworld.com/news/2008/102908-bechtel.html

“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 SaaSmigration strategy soon is that their IT organizational structures will be a competitive disadvantage.”

Geir RamlethCIO, Bechtel Corp.

Infrastructure as a ServiceInfrastructure as a Service

Virtual Servers

Virtual Servers

Virtual Servers

Virtual Servers

Virtual Servers

Virtual Servers

Platform as a Service (PaaS) for the

Inquiring Developer

“Servers as a Service” PaaS as EnterpriseApplication Framework

Infrastructure as a ServiceInfrastructure as a Service

Database as a ServiceDatabase as a Service

Python/JavaApplication Server

Python/JavaApplication Server

~Familiar Developer ModelRapid Scalability

β OfferingInnovative Technology

Supports Large-Scale SaaSDeep-Dyed Multitenancy

Database as a ServiceDatabase as a Service

The Cloud as a Multi-Product Marketplace

Unlimited Real-Time Customization

Granular Security & Sharing

Programmable Cloud Logic

Real-Time Workflow& Approvals

Programmable User Interface

Integrated Content Library

Infrastructure as a ServiceInfrastructure as a Service

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”

What it Means to Promise “The Cloud”

Coherent Code Base and Managed InfrastructureCoherent Code Base and Managed Infrastructure

Your Clicks

Your Code

User Interface

Logic

Database

Metadata representations:

Rigorously partitioned data, logic and customizations for multiple customers

Build strategic applications

Customize any aspect

Upgrade when convenient

Your IP under your control

Enterprise Clouds Enable Deep Customization

Cloud Integration: No Need for Rip/Replace

Mash-ups from Web and

AppExchange

Native Desktop

Connectors

Integration Partner

Ecosystem

Developer Toolkits

Native ERP Connectors

Integration in Practice

Product Master

Pricing Master

Invoicing/Billing Master

Order Master

Invoicing/Billing Master

Product Master

Cast Iron Integration Appliance

Customer MasterCustomer Master

• SSL data encryption

• Optional strict password policies

• SAS 70 Type II & SysTrust Certification

• Security certifications from Fortune 50 financial services customers

• May 2008: ISO 27001 Certification

Platform Security• Fault tolerant external firewall

• Intrusion detection systems

• Best practices secure systems mgmt

• 3rd party vulnerability assessments

Network Security• 24x365 on site security

• Biometric readers, man traps

• Anonymous exterior

• Silent alarm

• CCTV

• Motion detection

• N+1 infrastructure

Facility Security

Cloud Security: No Need for Excuses

“There are some strong technical security arguments in favor of Cloud

Computing… (Craig Balding, Fortune 500 security practitioner)

May-July 2009

• 99.997% of planned availability

• Continually narrower maintenance windows

Live System Status

Security Best Practices

Historical Performance

Full Public Disclosure

Amazon

Google

Transparency Surpassing Enterprise Norms

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 SalesforceCRM, 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.

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.comdevelopment teams during summer 2009

– Average experience: 4 applications deployed to date

– Average project cost savings: 48%

– Average project acceleration: 5.1x

Coherent Code Base and Managed InfrastructureCoherent Code Base and Managed Infrastructure

Your Clicks

Your Code

User Interface

Logic

Database

Metadata representations:

Selectively shared data, logic and customizations for multiple customers

Build strategic applications

Customize any aspect

Upgrade when convenient

Build vital communities

Enterprise Clouds Enable Powerful Connections

Family Service Agency of San FranciscoHIPAA-compliant EHR for mental health case management

For the first time we have visibility into the effectiveness of our client programs and the ability to set and track

metric-based benchmarks for client progress.

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)

Self-audits and tracking of clinician, program, and division productivity

Automated reimbursement process though auto-population of funder forms

� Client Intake� Case Management� Service Plans� Client Outcomes� Self-audits

Bob BennettCEO”

“

� 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

What are the Obamanomics of SaaS?

U.S. Census BureauIncreasing 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

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

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

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

Are Your Customers Pulling Their Weight?

Ideas has been an unbelievable home run. We are loving

it―the voice of the customer is totally present at Starbucksin a brand new way, thanks to the Force.com platform.

“

”Chris BruzzoCTO, Starbucks

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”

� 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

You Can Be Social…Safely

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

What Drives Web 2.0 in the Workplace?

� Goals:

– Collaboration

– Creation

– Knowledge Identification

– Talent Motivation/Retention

� Methods

– Knowledge Engineering

– Peer Tagging/Rating

– Networking

– Publication

zSeriesS/3904300S/370S/360IBM 701Mainframe

Sun/AMDx86 Servers

Niagara CPUs

Sun/ILMRender Farms

SunWorkstations

& Servers

DEC

VAX 11/780

DEC

PDP-8Mini

Windows XP

& Mac OS X

Windows

3.x/9x/NT

& Linux 1.0

IBM PC

MacintoshMITS AltairPC

’00s’90s’80s’70s’60s’50s

To Everything There is a Season

Appea

ranc

e

Emer

genc

e

Asc

enda

nce

Ref

inem

ent…

zSeriesS/3904300S/370S/360IBM 701Mainframe

Sun/AMD

x86 Servers

Niagara CPUs

Sun/ILM

Render Farms

SunWorkstations

& Servers

DEC

VAX 11/780

DEC

PDP-8Mini

Windows XP

& Mac OS X

Windows

3.x/9x/NT

& Linux 1.0

IBM PC

MacintoshMITS AltairPC

Grid

ComputingX Window

Cloud Apps

&

Platforms

’00s’90s’80s’70s’60s’50s

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

� 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?

This is the Leading Edge

Peter CoffeeDirector of Platform Research

pcoffee@salesforce.comfacebook.com/peter.coffee

twitter.com/petercoffee

Q&A?