has its head in the cloud

Now that has proved that SaaS (software-as-a-service) is a successful business model, the company hopes to lead the way in cloud computing.


Many in the software industry consider cloud computing -- offering a development infrastructure as a service -- to be the next step in the move away from packaged software. Chairman and CEO Marc Benioff stopped in New York last week to proselytise about why customers should use his company's platform, which offers application development in the cloud, over traditional application-development infrastructure.

Benioff is well-known for promoting his company's service-oriented strategy as the wave of the future, and he has positioned as the greatest thing to happen to application development since Visual Basic. However, given the emerging trend toward platform-as-a-service, Benioff and company appear to be on to something.'s hosted development platform is gaining traction among companies that don't want to spend time and money investing in on-premise software infrastructure or for those that can't afford to because of budget constraints, said business customers who have used

And as business customers become more comfortable with hosting and developing applications in the cloud, could displace traditional on-premise development infrastructure offered by the likes of Microsoft, Oracle and IBM for some customers, especially those in the small and midsize business market.

Platform-as-a-service got a big boost last week when Google introduced App Engine, joining and, with its Elastic Compute Cloud (EC2), as early entrants in the space. However, neither nor Google is particularly focused on business customers, which is what differentiates and could give it a better chance of competing with Microsoft and IBM for corporate developers.

Still, customers and analysts cite a few key challenges for persuading businesses to build applications on a hosted platform like's or Google's. Among them, according to RedMonk analyst Michael Cote, is that a traditional IT department will feel displaced when managers inform them their coding skills and abilities to integrate complex development infrastructure are no longer needed.

"If you're an IT department in a big enterprise, it makes you wonder what your job is going to be," he said.

Jeremy Roche, CEO of CODA Financials, ran into that problem when he told his IT department that the company would be building a new version of its ERP (enterprise resource planning) and accounting applications in the cloud on But there was no other option for the company, which would have needed "50-plus developers," millions of dollars and two years to build the infrastructure to do the development that was required, he said during a presentation at's New York event.

"I didn't want to have to talk to shareholders" about that, said Roche, whose company has headquarters in the UK.

CODA repurposed some Java developers and trained them on the platform, since, according to Roche, the development model is similar to Java. It took less than a month to train them, and they completed Coda2Go in about six months. If the company hadn't used, "we'd still be building the infrastructure right now," Roche said in an interview.

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