On 7 March 2008, a new and intriguing entry appeared on the US Patent and Trademark Office database. Trademark  77525433, when it was fully disclosed later, read: "App Store: Retail store services featuring computer software provided via the internet". And it continued: "...services for use on handheld mobile digital electronic devices". Simple. To the point. Revolutionary.

Four months later, Apple launched what observers have characterised as the defining service of cloud computing. But the App Store had a progenitor.

The trademark was passed as a gift to Apple's Steve Jobs from Marc Benioff, CEO and founder of Salesforce.com, whose unreserved admiration for Jobs and Apple (he spent a summer there as a programmer in the mid-1980s when he was a student) persuaded him to give away the rights to Salesforce's own use of "AppStore" - a platform it had announced in late 2006 and designed for the "trying, buying and deploying of [third-parties'] applications" as a service over the internet.

By the time Apple's App Store hit the web, Salesforce had not only opted to use the term AppExchange for its store, but had already shown just how successful that model could be. Today, AppExchange is a marketplace for over 850 on-demand business applications - from logistics and financials to business intelligence and HR - all of which sit alongside Salesforce's own portfolio of core CRM applications, Sales Cloud and Service Cloud.

"It's the only time I have ever been ahead of Steve Jobs on anything," says Benioff reverentially. Indeed, he happily reverses the chronology, portraying AppExchange as "Apple's App Store brought to enterprise software".

In enterprise circles, though, it is Salesforce's achievements that are lauded. For many, it is the undisputed pioneer of cloud computing, having proved the viability of most of the fundamentals of the delivery of IT as a service over the internet in the 10 years since shipping its first application for salesforce automation.

Turning the tide

Salesforce's software-as-a-service (SaaS) applications - even up against the formidable forces of packaged software companies such as SAP, Microsoft and Oracle - have established a user base of two million, spread across 70,000 customers, not including applications sold through AppExchange. The software subscription model underpinning that generated $1.3 billion in revenues in 2009.

It towers above fellow SaaS application providers - such as SuccessFactors, Workday, RightNow and NetSuite - although others have thrown their not-inconsiderable weight behind the wider model of cloud computing: Google, with its Google Apps email, word processing and related office services; and Amazon Web Services, with its increasingly broad range of compute, storage, database and ecommerce offerings.

In charting a roadmap for the future of cloud, Benioff is adamant that the tide of IT has turned. And, he believes, the current economic and business environment is only spurring on that change. "This is a time when we need change, we need new ideas, and we need lower costs," he says. "There are literally thousands of companies around the world that are now delivering the next generation of cloud computing for the enterprise."

Despite this, he still feels the need to evangelise. "We're at the early stages, but look at the results of cloud software companies in 2009," he says. Most showed impressive growth (Salesforce revenues rose 21%; Amazon Web Service doubled its revenues to $250 million). The traditional leaders of the business applications sector, by contrast, showed a sharp slump in software sales.

The reason for this is transparent, at least to Benioff: they are struggling to move their technologies, charging models and customers to the new cloud model, assuming they even have the will to go there: "Instead of trying to bring innovation into customers, they are simply trying to milk their cash cows. They may have made big promises in terms of on-demand software but they have never followed through. Instead, they default to the status quo, holding customers back, increasing maintenance fees and giving them no new value."

Fighting talk for the man who left Oracle in 1999, after a decade and a half at the software giant, to channel the fortune he had made and the experience he'd gained into a maverick's dream.

The old model is over, he argues, and customers are hungry for the new world of cloud computing. "We are liberating you from what is clearly a dead  - and expensive - paradigm. We've been working on it for 11 years, so we'd better [be able] to do so."

Customer concerns

Benioff may be convinced that cloud's day has come, but the corporate world still has some misgivings about how fast it wants to move applications, data and infrastructure to that new model.

One issue, at least at this stage, is the pivotal role of packaged software within organisations, and the lack of credible cloud-based alternatives. CIOs are acutely aware that, in choosing the strategic application services that drive their business operations, they need suppliers who are long-term players, with applications and supporting infrastructure that are cloud-proven. They also want to engage with vendors who can fund the sustained development and operation of robust cloud services.

While the functionality available today via the cloud represents only a fraction of what appears in the broad catalogues of on-premise software, the portfolio of cloud apps is progressively expanding.

One example is FinancialForce.com, a cloud-based accounting service from the Coda/Agresso stable of ERP software. Another is Glovia.com, an order management application that covers the complete quote-to-fulfilment lifecycle, including invoicing and warehouse management.

Benioff, provocatively, says he would love the ERP market leaders to follow suit. "The most important thing is for the mainstream players - SAP, Microsoft and Oracle - to start offering cloud computing because we want to move the whole market to cloud computing. We want everyone to accept that cloud computing is the way to go."

To date, however, the adoption of cloud services has not always involved bet-the-business applications. A recent survey by Information Week of 281 business technologists revealed that 59% saw their current SaaS products as tactical, point solutions, with only 32% considering them as part of a longer-term strategy. This suggests that as CIOs orchestrate a shift to cloud computing, they will also be looking to leverage the strengths of strategic partners with deep IT foundations.

Cloud adoption strategies vary widely from vendor to vendor, with approaches aligned to their backgrounds and strengths. Fujitsu, for example, advocates a phased, four-stage journey to cloud that starts with the shift of traditional infrastructure components to a cloud base, followed by the progressive transfer of the customer's application portfolio.

Later, at the more mature stages, the customer gains the ability to select and subscribe to IT resources and business processes, eventually servicing end-to-end processes through an open, App Store-like marketplace.

Facebook for work

Salesforce will continue to drive the transition to cloud by growing the ecosystem of products offered through AppExchange and the development and customisation of applications through its Force.com platform. But the company is pushing out in a different direction that takes it beyond CRM.

Widening its ambitions, Salesforce is moving into collaboration - as always, viewing the area through a cloud prism. During this quarter, it plans to roll out Chatter, a "Facebook for today's work environment - secure, reliable, mobile, multi-language, multi-currency," says Benioff.

"It's everything the enterprise needs for next-generation collaboration using cloud computing.

"Collaboration is an incredibly important part of enterprise computing," he continues. Over the years, we have seen a lot of great technologies for collaboration in the enterprise - IBM Lotus Notes, Microsoft SharePoint and others - but the reality is that it needs a new look.

"When cloud computing comes in, it starts the democratisation of the technology, and we need collaboration that applies the new models that are being used by half a billion people in the world concepts that have been popularised in the consumer world."

Users influenced by consumer rather than corporate IT are driving that shift. "The consumer world provides clues as to where the enterprise is going. The kids coming out of college are not being trained on mainframe or server [software]. They're all on Google [Apps], they're all on iPhones, they're all on Facebook.

"That is going to be the next wave of computing in the enterprise; that's just the reality that we are in. They realise the internet is the future, and that there are all these resources you can use to radically reduce your costs and improve your performance."

Global footprint

Even as it grows its cloud portfolio, Salesforce still encounters one major stumbling block for CIOs considering cloud adoption: security. That concern is unjustified, says Benioff, reeling off the names of CIOs whose purchases confirm solid uptime metrics for cloud. And, he continues, "I'll put our security and reliability up against any of our customers' [internal measures]."

Governance is a related aspect, with CIOs often uneasy about the lack of visibility of where their data resides and the control they have over its movement across borders. That, again, is no showstopper, says Benioff. He recently met with the European commissioner in charge of data protection, and the UK government CIO, John Suffolk, and was "given the thumbs up".

"Why else would the most important companies in Europe be using us?" he asks. BT, Deutsche Bank, Allianz, Fortis, Sanofi Pasteur MSD, Standard Life and Toyota Motor Europe are all flagship customers.

Those users are today served from application instances running at the company's main data centre in Sunnyvale, California and a replication site on the US Eastern seaboard.

And after many years mulling the establishment of a global footprint for the data centres that serve up its applications, Benioff now says Salesforce will follow the recent opening of a data centre in Singapore by launching facilities in both London and Tokyo - an expansion that, he maintains, has more to do with scalability and performance than security and governance concerns.

The location is unimportant, says Benioff - even, in his opinion, in terms of regulatory or data movement issues. "We simply have to have more data centres because we are growing so fast."  And that just reinforces the sense of a watershed.

At some point in the future, the Salesforce rallying cry for the past decade of "No software" will have to be dropped - when so little software is consumed on-premise that it becomes an anachronism.

For now, though, there is no letting up on Benioff's hyperbole: "It's the end of software. Customers need a new paradigm. They're under extraordinary commercial pressure to change. They need a new approach to stay in business, to stay alive, to feed their children."

FURTHER READING: "Turning cloud services into a business reality"

Photography: Eric Millette