Salesforce.com Challenges Oracle in Database Market

Salesforce — the world’s
biggest maker of cloud-based software that its customers access over the
Internet — announced its new Database.com service on Tuesday as it
diversifies its lineup of software programs for businesses.

The
company has long generated the bulk of its revenue from selling
software for managing corporate sales and marketing activities, but has
branched into other areas in recent years in a bid to accelerate sales
growth.

Database.com is built on
the same cloud computing model as Salesforce.com’s existing products:
Salesforce.com will host the database, which customers will access via
secured connections over the public Internet. The fee covers software
costs, hosting and data storage.

Database.com,
which will be available next year, can store data for applications
written for Facebook, Twitter, Apple Inc’s iPhone and iPad as well as Google Inc’s Android operating system for smart phones.

It is also compatible with applications that run on cloud computing systems from Amazon.com Inc, Google and Microsoft.

The
makers of top-selling databases — Oracle Corp, Microsoft Corp and
International Business Machines Corp — typically require businesses to
buy software in advance, install it on their own computers and then
employ staff to maintain those systems.

"It’s
an alternative delivery method," said Gartner analyst Donald Feinberg,
who estimates the value of the database market at about $21 billion a
year. "They could very possibly be on to something."

Database.com
is only the second major fully cloud-compatible database management
software system on the market, following Microsoft’s launch earlier this
year of SQL Azure, Feinberg said.

Feinberg
said that it would likely take at least several years for cloud
databases to present a serious challenge to old-style versions of the
technology as many businesses are uneasy about handing sensitive data
over to a third party.

Yet he added
that Salesforce.com’s entrance in the market ought to spur adoption
because the company has a reputation for providing reliable service and
good data security.

Salesforce.com Chief Executive Marc Benioff was due to unveil the new service at a users conference in San Francisco on Tuesday.

(Reporting by Jim Finkle)