Salesforce.com continues enterprise build out

Salesforce.com announced two new initiatives aimed at expanding its presence with larger customers, one of the company's most significant goals for future growth.

After reporting on-target financial results late Wednesday that featured substantial gains in revenue and profits compared with the same period last year, the on-demand customer relationship management, or CRM, specialist detailed the new projects, which focus on strengthening Salesforce's underlying technology infrastructure and expanding its Web services capabilities.

The first effort, dubbed Mirrorforce, revolves around a $50 million investment the CRM company is making to expand its data centers, the critical IT systems that run Salesforce's online applications and store all of its customers' information. Under the plan, Salesforce is building new data centers on the East Coast and West Coast of the United States, the exact locations of which it did not reveal, to augment its existing facility in Silicon Valley.

The company is also building a fourth data center, located on the West Coast, that will help support the Salesforce's new product development.

Marc Benioff, chief executive of Salesforce, said the software maker needed to expand its operations in order to provide real-time fail-over protection for its customers, a requirement he said enterprise clients have been asking the company to address. Salesforce has traditionally relied on technology and services provided by Sungard to back up its applications, but Benioff believes that adding the in-house protection will help provide faster response.

In the new data centers, Salesforce's customer information will be replicated live from its existing operations to provide an immediate backup system.

"Enterprise customers really want to be able to see this kind of instant fail-safe in the event of a catastrophic data center issue," said Benioff. "We're doing this as a result of signing more enterprise deals; large customers want us to go one level further" with data protection.

As part of its earnings report, Salesforce reported new deals with sizable companies including Aon, CIT Group and Citizens Financial Group. Benioff said Salesforce has already taken delivery on the hardware and software needed to build the new facilities, which are expected to go live when Salesforce introduces its Winter '06 version of its CRM tools, due out before the end of February.

Industry watchers praised the move as something the company needed to do, especially in light of the fact that its existing data center resides close to Northern California's earthquake belt. Some analysts said they had expected the company to make such infrastructure investments earlier.

"I'm actually surprised that they haven't done this before," said Laurie McCabe, analyst with AMI-Partners. "A lot of companies with fewer customers have built redundant facilities for the same reasons, such as (on-demand rival) RightNow Technologies. (Salesforce) faced even more pressure to do this because they're a leader in the market, and if anything ever happened to their systems, it could be harmful to the reputation of the whole (on-demand applications) industry."

Remixing Web services
Taking a cue from the popular culture trend toward so-called musical "mash-ups," or remixes of multiple songs pulled together to create something new, Salesforce also detailed its latest Web services initiative, which it's calling Smashforce.

The Smashforce effort will consist of a software-development tool kit, built on AJAX technology, which promises users of Salesforce's