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Salesforce Launches Free Chatter Service, Enters Database Market

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Posted December 7, 2010 By Paul Shread     Feedback

Salesforce.com's relationship with Oracle could get a little rockier.

Salesforce.com (NYSE: CRM) today made a bold move into the database market and also announced plans for a free version of its Chatter collaboration service.

The online customer relationship management (CRM) leader had said the free Chatter service was coming, but the database news came as a surprise and could further ratchet up the company's competition with Oracle (NASDAQ: ORCL).

But Stifel Nicolaus analyst Tom Roderick noted that Oracle may actually benefit from Salesforce's Database.com offering.

"We believe the offering is some combination of licensed Oracle database technology and Salesforce.com proprietary code built around those Oracle databases," Roderick wrote in a research note. "While details of the offering remain relatively light at this point, we do not believe that Salesforce.com will be targeting Oracle's core domain in the database market. Rather, we see Salesforce challenging Microsoft's early entry into the cloud database market with SQL Azure, and we also see a subtle challenge to the mobile database technology acquired by SAP as part of its Sybase acquisition."

Roderick said that "as more and more devices move to the cloud, the benefits of on-premise databases dissipate, and we think this is the play that Salesforce.com is making."

Kraig Swensrud, Salesforce's senior vice president of product marketing, declined to reveal if Oracle database technology is used in the offering. He told eCRM Guide that the platform includes "a lot of intellectual property" built by Salesforce.com, and that the company doesn't publicly disclose its technology underpinnings.

Salesforce's new Database.com offering takes the database infrastructure at the heart of the Salesforce.com CRM service and Force.com platform and offers it as a standalone product so developers can "focus on building great applications instead of tuning, maintaining and scaling databases," the company said in a press release.

In his keynote address at the Dreamforce conference today, Salesforce CEO Marc Benioff called the service "way overdue. Databases need to move into the cloud."

The open platform supports Java, C#, Ruby, PHP and other languages, and apps can run on any platform, such as Force.com, VMforce, Amazon EC2, Google AppEngine, Heroku or Microsoft Azure. Apps can run natively on any device, like an Android phone, Blackberry, iPad or iPhone, and projects can start small and scale.

The database offering includes enterprise features such as user management, row-level security, triggers, stored procedures, authentication and APIs, and it also offers a pre-built social data model for feeds, user profiles, status updates and a following model for all database records.

General availability is planned for next year. The service is free for three users and up to 100,000 records and 50,000 transactions a month; $10 a month for each set of 100,000 records beyond that; and $10 a month for each set of 150,000 transactions beyond that. Database.com Enterprise Services will be priced at $10 per user per month and include user identity, authentication and row-level security access controls.

Salesforce's Ambitious Chatter Plans

Benioff said Salesforce's goal is "Chatter for everyone" with new free services.

Chatter Free is a scaled-down version of the service for non-licensed employees in companies that are Salesforce customers, and the company also plans a free Chatter.com service that is expected to launch in February. Benioff said of Chatter.com: "it's free, it's mobile, it's viral."

Non-Salesforce companies may user Chatter Plus for $15 per user per month.

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