Salesforce.com Links With Amazon and Facebook

Salesforce.com moved deeper into the world of cloud computing on Monday, announcing partnerships that link its Force.com hosted applications platform with services from Facebook and Amazon Web Services. Read article

The deal with Facebook allows Salesforce customers to build applications on its Force.com platform that appear natively inside Facebook, CEO Marc Benioff announced at the start of Salesforce.com's Dreamforce conference in San Francisco.

He showed an example of a recruiting application that an employee could embed in their Facebook page, where they can then use their social connections to recruit new employees for their company.

The Amazon partnership makes the company's on-demand storage and computing services available from Force.com. A developer in need of extra storage, for example, could offload some of their data onto Amazon's S3 storage service, Benioff said. They can also use Amazon's EC2 computing service.

Addressing a packed hall of Salesforce.com customers, Benioff painted a picture of a computing Wild West in which cloud platforms from different vendors are combining to create new opportunities and challenges.

"These are crazy times; these are whacky times," he said. "No one can predict these times, but there's never been a better time for cloud computing."

China Martens, a senior analyst with The 451 Group, said it makes sense for cloud providers to combine their services. "They don't really compete and they each have their own specialty, so it makes sense to have the integration," she said.

Combining the services may also ease fears about getting locked into a cloud platform, she said, something some customers have worried about. But she wondered about the implications of mixing personal data with business applications on Facebook.

"What kind of issues does that throw up? Maybe we need to start drawing rings around personal and professional data," she said.

Executives from Facebook and Amazon joined Benioff on stage for the announcements. Sheryl Sandberg, Facebook's chief operating officer, said she hoped the partnership would pave the way for a new wave of enterprise applications on the social-networking site.

In the recruiting application demonstrated here, the interface looked like a standard Facebook program but was hosted on Salesforce.com's servers and built using its Visual Force user-interface tool. Developers can download a new toolkit, Force.com for Facebook, free from the Force.com Web site today, Benioff said.

Salesforce.com added 4,100 new CRM (customer relationship management) customers during its July quarter, Benioff said, for a total of 47,700. It expects to pass US$1 billion in annual revenue for the first time this fiscal year.

Competition is increasing, however, as more packaged-software vendors start to offer their products as hosted services. Oracle, SAP and Microsoft already offer hosted CRM, and Microsoft last week announced a new project, Azure, that will compete with Force.com by providing a platform for building hosted applications.

Benioff mocked Azure, calling it "vaporware," and suggested that Microsoft will lock developers into its platform. The future will be about combining open cloud platforms that create "the best of all worlds," he said.

"This isn't about one vendor standing on stage and saying it's only our OS, our devices and our ecosystem, like we saw last week," he said, referring to the Azure launch. "Those days are over."
Monday's speeches here focused on the Force.com platform; Tuesday's will address the applications suite, Benioff said. He hinted that presidential hopeful Barack Obama will make an appearance during Tuesday's speech, though he didn't say if it would be in person or by video.
Monday's announcements take Salesforce.com further from its core business of providing an online CRM service. Force.com was a first step in that direction, providing a platform where companies can build and host add-ons for its CRM programs. Salesforce.com is now trying to diversify further.

Earlier Monday it announced Salesforce.com Web Sites, where it offers to host internal and public Web sites for its customers. Those Web sites link to a customer's back-end Salesforce.com applications, so that changes on the back-end appear immediately on the Web sites.
The service is in beta now and slated for introduction next year, Benioff said. Salesforce Professional customers get up to 250,000 page views per month for no charge, Enterprise customers get 500,000 page views, and Unlimited customers get 1 million. Additional page views cost $1,000 per month for 1 million pages, or $3,000 per month for 5 million pages.

Starting in 2009 USGAAP to Move to IFRS by 2016

The Securities and Exchange Commission recently announced that the U.S. will abandon Generally Accepted Accounting Principles -- for almost 75 years, the bible for U.S. accountants -- joining more than 100 countries around the world instead in using the London-based International Financial Reporting Standards. Pointing to the "remarkably quickening pace of acceptance of a true lingua franca for accounting," SEC Chairman Chris Cox set out a timetable for all U.S. companies to drop GAAP by 2016, with the largest companies switching as early as next year. See here.

There are specific differences between the two systems; for example, the international system only allows the first-in, first-out inventory accounting system. The most important difference is that the international standard is based on principles, whereas GAAP is based on rules. GAAP suffers from the complexity of trying to set rules for all situations, a complexity that often masks economic reality.

GAAP rules fill a nine-inch, three-volume set of pronouncements plus interpretive information. In contrast, IFRS is a slim two-inch book. GAAP was crafted in part by the pressures of the U.S. legal system. Companies have been glad for GAAP rules as defenses for claims of accounting irregularities. But these rules often only pretend to provide clarity. There are hundreds of pages of GAAP covering how to account for derivatives, but this didn't stop opaque pricing mismatches, which helped create the credit crunch. GAAP rules allowed trillions of dollars in securitized financial assets and liabilities to stay off the books of U.S. financial firms, while the international standard, by focusing on the true underlying economics, kept these on the books for firms based elsewhere.

It's surprising that there is no common language for measuring the performance of companies. Until recently, all major countries had their own accounting rules, but IFRS has become the approach of choice. Inconsistent approaches to accounting make it hard to compare an energy company based in Texas with one based in Amsterdam, a bank in New York with one in London, or a biotech firm in Boston with one in Singapore. A single set of accounting rules would mean more effective global disclosure and transparency. It would reduce costs for multinationals that must now prepare multiple books. It would also make U.S. exchanges more competitive for listings by eliminating accounting differences.

A measure of the importance of a single standard is the dislocation that getting there will cause. It will mean rewriting business school texts and retraining of corporate finance departments. The forensic accountants who sniff out problems will have to develop instincts using a new set of measures. The transition will also be tough on investors. Under the SEC proposal, larger companies in the same industry would switch to the international standard before smaller companies do. Investors for the transition period would have to compare similar companies using different accounting.

The big U.S.-based accounting firms generally support the abandonment of GAAP. Skeptics could call this switch in systems the equivalent of the accountant full-employment act for many years, but the profession itself also recognizes that GAAP often fails to reflect underlying economics.

A PriceWaterhouseCoopers briefing document for executives on the accounting change notes that changes will also be necessary in the law. "If an accounting and reporting framework that relies on professional judgment rather than detailed rules is to flourish in the U.S., the legal and regulatory environment will need to evolve in ways that remain to be seen." These include that "regulators will need to respect well-reasoned professional judgments."

A system based on principles could create new defenses for company boards and accountants who try to do the right thing, if they fully disclose why they thought that a particular accounting treatment made sense. The law will have to adjust to accept more ambiguity in accounting, as a necessary condition for reporting with maximum accuracy.

As technology has shown in other areas of life, agreed-upon standards and accepted operating systems drive usage and efficiency. Common measures add value to information. If even the belt-and-suspenders accounting profession is willing to take on the risks of switching its basic system for assessing businesses, we're truly in an era when anything that adds to understanding belongs in the asset column, while anything that undermines transparency is a liability.