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December 14, 2006 | Comments: (0)
07 Predictions: Salesforce.com and SaaS will go off shore
My two bold predictions for 2007 are this, one, Salesforce.com will take its business offshore, opening up data centers mostly likely in Bangalor, India.
Two, off shore data centers will realize they don't just need to host somebody elses applications. Look for the off shore companies in India and elsewhere to take what they've learned about software and start to compete with companies right here in the States.
The first offers obviously will target Salesforce.com and other SaaS providers. But over time, as SaaS and off shoring grows, the skies the limit on off shore home grown apps to compete directly with U.S. and German giant software companies.
More on Salesforce.com
They have two data centers now, one in California and another just opened on the east coast.
They couldn't have gotten worse press when their West Coast center went down for several hours, twice in 2006, so the thinking goes [my thinking, I am only guessing at what they are thinking] why not get another low-cost backup system somewhere else.
And with competition getting stiffer, SAP, Oracle and the companies they gobbled up like Siebel and PeopleSoft, all offering SaaS [Softwae as a Service] solutions, Salesforce will be looking to lower its prices.
Since Salesforce is the defacto leader of the SaaS industry, you can bet others will follow.
Posted by Ephraim Schwartz on December 14, 2006 12:46 PM
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Ephraim: You should contact salesforce.com to check your facts. Salesforce.com has 3 data centers, not 2 and none of them are in New York.
Posted by: Scott at December 14, 2006 08:55 PMWell that is news to me. I was told by Salesforce that they had a single data center with a second being completed in New York.
Ephraim
Your missing the point. Data Centres are about availability and control - not about cost. salesforce.com is trying to increase it's average price not slash it! And if they did want to slash costs, the data centres are such a small component of the overall cost picture that they'd start somwhere else!
The difference is, while computing capacity it becoming a commodity, (and thus elligible for offshoring), on-line computing availability at 99.9++% is far from a commodity. For any US SaaS providor, it is core to keep it as close and controlled as possible.
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