In a move that will likely shake up the highly competitive cloud race, Saleforce.com announced on Wednesday that it has selected Amazon Web Services as its preferred public cloud infrastructure provider for its international markets.
Under the expanded partnership, which CEO and Chairman Marc Benioff hinted to during last week's earnings call, Salesforce noted that for the first time it will offer its core services as part of its international infrastructure expansion.
"This will enable us to bring new infrastructure online more quickly and efficiently in select international markets," Salesforce stated in its announcement.
The timing could not have been better. Cloud companies that have European customers and employees but house their personal information on servers based in the US are having to seek workarounds due to changes in European privacy and security laws under the Privacy Shield agreement with the US. As a result, some companies are looking at the more costly prospect of having to build data centers in Europe to handle those customers and employees data storage.
"I think the Snowden effect has sent operators of data centers back to the drawing board and made them seriously assess the required investment to support international customers," Al Hilwa, an IDC software analyst, told InformationWeek. "However, this is about more than international coverage. Major IP-based software firms like Salesforce [have] to think hard in general about whether they want to be an infrastructure player with the required scale of a massive network of data centers needed to be profitable. Instead, focus on premium profitable services may be a better approach."
Salesforce says it plans to deliver its core services Sales Cloud, Service Cloud, App Cloud, Community Cloud, Analytics Cloud and other services, via AWS in select international markets. That greatly expands its current long-time partnership with AWS.
Amazon's AWS infrastructure previously has been handling such Salesforce services as its Heroku, Marketing Cloud Social Studio, SalesforceIQ, and the recently introduced Salesforce IoT Cloud.
Although Salesforce is naming AWS as its preferred international infrastructure partner, the company said it will also continue to invest in its own data centers.
"I think this is a lot more significant than it might appear. In the context of a highly competitive race for infrastructure and platform services between Google, Microsoft, AWS, and IBM, it is a big deal when a very large consumer of infrastructure identifies one as a strategic partner. This is on the scale of the win that AWS had with the CIA a couple of years ago," Hilwa said.
"This is an important win for AWS in a hypercompetitive race at the top of the cloud market," said Hilwa.
In selecting AWS, Salesforce stated, "AWS has sophisticated and robust enterprise capabilities for supporting the needs of Salesforce's growing global customer base. AWS will help accelerate its ability to bring new infrastructure online more quickly and efficiently."