Salesforce Names AWS Its 'Preferred Public Cloud' Provider As Rumors Of Acquisition Swirl
A week after CEO Marc Benioff talked in an earnings call about bolstering his company's relationship with Amazon Web Services, Salesforce on Wednesday revealed it would be expanding its core services into international markets on the backbone of Amazon's public cloud.
The international expansion plan represents the first time Salesforce will host its core Software-as-a-Service portfolio -- Sales Cloud, Service Cloud, App Cloud, Community Cloud, Analytics Cloud -- on AWS' infrastructure, the companies said in separate blog posts.
With AWS as its "preferred public cloud infrastructure provider," states the Salesforce blog, "Salesforce will utilize AWS in select international markets to help bring new infrastructure online more quickly and efficiently.’
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The move comes two weeks after a major Salesforce cloud outage caused by a database error resulted in customers throughout North America being shut out of their CRM, and some losing hours of data entered into the system.
Salesforce is already an AWS customer. It also does business with Amazon's two hyper-scale rivals: Google Cloud Platform and Microsoft Azure.
The Salesforce blog says the company will keep investing in its own data centers as well.
Last week, Benioff told analysts during Salesforce's first quarter 2017 earnings call that the company was exploring ways to move to market more aggressively with AWS. Benioff said more news of that burgeoning relationship would be shared at the company's Dreamforce conference, slated for October.
After Salesforce reported those stellar financials, on CNBC's "Mad Money," host Jim Cramer asked Benioff about persistent rumors of wanting to sell Salesforce.
Benioff's answer -- essentially that he's been working on the company for 18 years, and "is making personal decisions as that goes" -- clearly wasn't in line with Cramer's expectations, and prompted the host to tell Benioff it sounded like he indeed was contemplating selling the company.
In April 2015, Salesforce reportedly turned down a $55 billion bid. CNBC later reported the offer came from Microsoft, and that Benioff, at the time, wanted $70 billion to sell his company.
Salesforce already hosts its Heroku Platform-as-a-Service offering in Amazon's cloud, and is developing an Internet of Things platform also on Amazon infrastructure. Marketing Cloud Social Studio and SalesforceIQ, an offering for the SMB market, also run on AWS infrastructure
Jeff Aden, executive vice president of marketing and strategic business development at 2nd Watch, an AWS partner based in Seattle, told CRN the revelation that "Salesforce will essentially go all-in on AWS is significant."
Last year's rumors that Salesforce was being courted by Microsoft and Oracle suggested an acquisition that didn't seem like a logical fit, Aden said.
The partnership with AWS "is more strategic for both companies and makes a ton of sense if you look at the product offerings, culture and presence of each company," Aden told CRN.
Salesforce and Amazon don't compete on core products, Aden said, which creates synergies for upselling, cross-selling and product development.
In the company's third-quarter earnings call last November, Benioff offered a glimpse of the company's dependence on cloud infrastructure providers.
The CEO told investors that Salesforce was a large AWS customer, and vice versa. Salesforce used AWS to "build our product," Benioff said, with Heroku, the application development platform Salesforce acquired in 2010, hosted on AWS.
At the same time, the company was also working with Microsoft, he said, and expanding its use of the Azure cloud. Benioff added that Salesforce used Google's platform extensively as well.
In a statement Wednesday, Benioff said 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."