pcoffee saas u keynote 20100126

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SaaS in the Obama Economy

Opportunity

Challenge

Necessity

Peter CoffeeDirector, Platform Research

salesforce.com

CEO Needs

Operational

Governable

Affordable

CIO Mandates

Productive

Reliable

Secure

Platform as a Se

rvice

…while on-premise IT offerings followed familiar trajectories

2001 2009

Business imperatives kept moving in new directions…• Governance requirements• Threat environment• Competitive challenges

Not just another year of “Do more with less”…

Most of the time, CIOs’ actual mandate has been to

“do a lot more with just a little more…”

…but not last year

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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.)

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� Hiring won’t turn up soon(per Financial Forecast Ctr 12/20/09)

� U.S. GDP will stay flat(per Financial Forecast Ctr 11/30/09)

� Pressure will persist to seek

radical economies

What are the Obamanomics of SaaS?

0.70.310.2Jun

0.70.310.2May

0.60.310.2Apr

0.60.310.2Mar

0.50.210.2Feb

80%+/-

50%+/-

Forecast%

seasonally adjusted

Month (2010)

2.31.0+0.2Jun

2.21.0+0.2May

2.11.0+0.2Apr

2.00.9-0.5Mar

1.90.8-0.5Feb

80%+/-

50%+/-

Forecast∆∆∆∆%

year-on-year

Month (2010)

� Public-sector CIOs have the green light to pursue SaaS solutions

– Vivek Kundra, administration CIO: Federal gov’t “has been building

data center after data center…We cannot continue on this trajectory.”

– In a joint effort between the IRS and the Department of Education, it

has become possible with one click of a mouse button for IRS data to

populate the [federal student aid application] form, Kundra said,

eliminating more than 70 questions and 20 screens

(Daniel Terdiman, cnet.com, 12/15/2009)

� Domino effect is under way

– In October, the Los Angeles City Council unanimously approved the

plan to switch from Novell GroupWise to Google Apps... More than

8,000 of the city's 30,000 employees have signed up [for pilot effort]…

– Los Angeles Chief Technology Officer Randi Levin…has received 27 or

28 inquiries from California governments

(Matt Williams, govtech.com, 11/17/2009)


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� 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


U.S. Census BureauIncreasing Response Rates for the Decennial Census

Deployed a custom app in three months

Record, track and manage contacts and

activities between census staff and external

partners

App will scale up as decennial census

approaches

Manages 2,200 users temporary workers

geographically dispersed at headquarters and

12 regional offices

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� Make your message part of the “Obamacare” story:

– The February 2009 health industry cost saving initiatives proposed by President

Obama directs the industry to rapidly transition…to an instantaneous electronic

mechanism… The Company's MD@Hand technologies allow physicians to gain

access and securely store electronic medical records…

Instacare Corp. press release, 11/23/2009

� Gain leverage from established cloud platforms:

– Practice Fusion is launching its patient health record on Force.com,

salesforce.com's enterprise cloud computing platform….

Practice Fusion press release, 8/5/2009

� The approach…that has been charted by Practice Fusion, and is significantly

enhanced by Salesforce.com’s expertise and resources, is a tremendously

positive step... Elimination of barriers to EHR adoption, while at the same time

ensuring security and privacy of protected health information, are all positive

results of using the “cloud” approach.

Robert Rowley, MD

thehealthcareblog.com, 8/12/2009


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”

“

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� A compliance economy needs compliance tools

� An economy of higher energy costs needs energy

management tools

� An economy with inflationary expectations needs

retirement tools

� An economy shedding “permanent” jobs needs free-

lancing tools

� All of these are rapidly evolving opportunities that

benefit from rapid deployment of new SaaS solutions

Look for the upside; be on the right side

The IT budget wasn’t the only shrinkage

� Dear CIO: Thinking about retirement? (Average CIO tenure = 4.4 years)

� Let’s play a little game called “Rebuilding your 401K”…

…and then let’s play it again

� Not only no capital or headcount budget; also no interest in disruptive risk

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� 65% of CIOs report that generating business innovation is how their

success is measured (N.B. – not technology magic tricks)…

…up from 56% the year before (techExec Society, State of the CIO)

� When I used the word “innovative” as one of three key “CEO

needs,” our CIO roundtable attendees corrected me

� The new word on that graphic is “operational”

� “Strong CIOs don’t innovate. They figure out

ways to make money for the business. They

cut waste and plow those savings into projects

that create value.” (techExec)

Selling to CIOs:

they know it’s not just “keeping the lights on”

CEO Needs

Operational

Governable

Affordable

CIO Mandates

Productive

Reliable

Secure

Platform as a Se

rvice

� Questions about security: perception of security risk is #1 concern

about cloud computing in nearly every survey

– OK, so ~80% of people believe that the cloud is inherently insecure

– 80% of Americans also believe the government is hiding its knowledge

of alien visitors to Earth

– Fears are refuted by facts

• ISO 27001

• SAS 70 Type II

• SysTrust

– Fact: Silicon Valley VCs

say that IPOs are made

easier when startups use

cloud services to address

their SarbOx requirements

What do CIOs not want?

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• 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)

� Password security policies

� Rich Sharing Rules

�User Profiles

� SSO/2-factor solutions

Login… Authenticate…Apply Data Security Rules… View Filtered Content

Cloud security: all the way down

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� Credible customer stories

– In their industry

• Relevant to their needs

• Threatening them with competitor advantage

– In their region

• Addressing issues of governance, compliance, and skills

� Negligible downside, guaranteed upside

– For example: salesforce.com initiatives include…

• Developer Account is free

– Tools and references are free

– On-line training is free

• Force.com Free Edition triggers viral growth

– Show people that status quo is the high-risk strategy

– Get people to stop saying “can’t” and start saying “how?”

• Certified Developers and Admins are waiting for your call

What do CIOs want?

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.

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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

Real-world results: health care

� CRC Health—the nation's largest provider of drug and alcohol treatment services—acquired the country’s largest youth treatment provider. The combined organization required a platform to manage patient intake, track Web entities, and streamline operations to increase revenue.

� The company used ACT!, spreadsheets, and other proprietary systems to manage extensive patient data. Only one call center operator could open the spreadsheet at a time, making the process inefficient, opaque, and unscalable.

� The company developed a customized user interface on Force.com for 12 users. With help from salesforce.com partner Appirio, CRC Health extended the application to broadly leverage the platform.

� Security levels are matched to what’s required to comply with HIPAA and other industry regulations. Open APIs enable tight integration with legacy tracking systems, Microsoft Outlook, eFax, and other third party apps. Web marketing effectiveness tracking within Salesforce CRM indicates to the dollar what is performing and what is not.

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� Bottom line: assurance that this is ready for prime time

– Real companies are building real solutions

– Stop fearing the myth-perception of the proprietary cloud

• There is one cloud: a global, public network using standard protocols

• In part of that cloud, buy computing in bulk from Amazon

• In part of that cloud, buy collaboration tools from Google

• In part of that cloud,

– Find the world’s most effective

and most user-approved

CRM portfolio…

…and build better applications

in less time with Force.com

What do CIOs want?

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

Trust through openness

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Trust through openness

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”

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This isn’t 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

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

Sun/AMDx86 Servers

Niagara CPUs

Sun/ILMRender Farms

SunWorkstations

& Servers

DECVAX 11/780

DECPDP-8

Mini

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

Appearance

Emergence

Ascendance

Refinement…

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

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Thank you

[email protected]

More information atwww.salesforce.com/cloudcomputing

CEO Needs

Operational

Governable

Affordable

CIO Mandates

Productive

Reliable

Secure

Platform as a Se

rvice