UPDATED 07:50 EDT / MAY 26 2016

NEWS

Salesforce hitches a ride on Amazon’s cloud, eyes international expansion

Salesforce.com, Inc. and Amazon Web Services (AWS) are solidifying their relationship in the cloud, with the former announcing that it’s chosen AWS as its “preferred public cloud infrastructure provider”.

Salesforce says it’s decided to go with AWS in order to further its international expansion plans. As a result, services including its Sales Cloud, Service Cloud, App Cloud, Community Cloud and Analytics Cloud will all soon be running in AWS data centers located outside of the U.S. The announcement strengthens the existing relationship between the two cloud companies, as Salesforce’s Heroku, Marketing Cloud Social Studio, SalesforceIQ and the newly announced Salesforce IoT Cloud already reside in Amazon’s data centers.

The move marks a significant change in strategy for Salesforce, which has run the bulk of its workloads inside its own data centers up until now, with a few exceptions such as Heroku.

“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,” enthused Salesforce CEO Marc Benioff in a canned statement.

The announcement will also be seen as a blow to AWS’ main rival Microsoft, whose Azure platform competes against it in the public cloud. Microsoft has enjoyed much warmer relations with Salesforce in the last couple of years under CEO Satya Nadella, and will surely be disappointed to lose out on a major customer such as them.

The deal will make AWS a tidy sum of cash. While neither it nor Salesforce disclosed how much the deal is worth, Fortune claims that Salesforce will pay AWS around $400 million over the next four years.

The relationship could well be expanded in the future too, said Al Hilwa, Program Director of Software Development Research at International Data Corp (IDC).

“Salesforce has acquired other technologies which use AWS most notably the public platform-as-a-service called Heroku,” Hilwa said. “A commitment of this scale may well involve a gradual shift for Salesforce to diversify the stack of its core business, but this is likely to take a long time.”

In any case, for AWS it’s a win-win because Salesforce is by far and away the largest enterprise cloud software maker in the market, and has masses of data that needs to be processed on a daily basis. Big companies from a variety of industries, such as Capital One and Netflix Inc. have switched to AWS’s infrastructure in recent times, and Salesforce’s move will only serve to encourage other businesses to transition to the public cloud.

Photo Credit: james_clear via Compfight cc

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