Salesforce.com’s (News - Alert) latest foray into the cloud computing sphere with the announcement of Database.com in December has not gone unnoticed by Forbes’ Trefis.com team. In a blog today, they speculated on Salesforce.com’s future in this realm and what it will mean to its long-term profitability.

Salesforce.com has long been a dominant player in cloud-based CRM software. Its cloud-based war chest also includes Force.com, AppExchange and now Database.com. Moving deeper into cloud-based business areas is seen as a smart and profitable strategic move as IT departments have shown a growing preference for avoiding investments in on-premise hardware and software. Indeed, Gartner (News - Alert) released a cloud-based services study in June 2010 that said “The scale of application deployments is growing; multi-thousand-seat deals are increasingly common. IT managers are thinking strategically about cloud service deployments; more-progressive enterprises are thinking through what their IT operations will look like in a world of increasing cloud service leverage. This was highly unusual a year ago."

The same study stated the cloud services market “is poised for strong growth through 2014, when worldwide cloud services revenue is projected to reach $148.8 billion.” Ben Pring, research vice president at Gartner, said at the time the study was released, “We are seeing an acceleration of adoption of cloud computing and cloud services among enterprises and an explosion of supply-side activity as technology providers maneuver to exploit the growing commercial opportunity.”

The Trefis Team estimates that other than its CRM-based software, revenues from Salesforce.com’s cloud computing services such as Force.com platform and AppExchange have been relatively small. They project that Salesforce.com will increase its market share in the cloud computing space over their forecast period, from a relatively low current market share base.

Salesforce.com sees a strong market for itself in cloud computing, as evidenced by its chairman and CEO’s statement when the company released Database.com in December. “We see cloud databases as a massive market opportunity that will power the shift to enterprise applications that are natively cloud, mobile and social,” said Marc Benioff, chairman and CEO, salesforce.com. “For the first time, we are making Database.com, the database that is proven and trusted by our 87,000 customers, available as an open, stand-alone service to accelerate the creation of these new apps.”

Forbes concurs with those thoughts on Database.com. In its blog today it said, “Database.com is an innovative product that opens the company to a $21 billion market currently dominated by Oracle (News - Alert). The potential for the cloud computing market is so large that, should Salesforce.com accelerate its market share slightly beyond our base estimates, to 1 percent by the end of our forecast period vs. our base estimate of 0.8 percent, it would imply 10 percent upside to our $128 price estimate for Salesforce.com stock.”

There are, of course, some obstacles to Salesforce.com’s growth in the larger cloud market, such as competition from companies the likes of Oracle; although Eric Knorr in InfoWorld back in early December brought up the fact that “Oracle has been slow to embrace the cloud and Salesforce has maintained a huge, multitenanted version of Oracle's database for years.” He went on to say, “recent speculation that Oracle will buy Salesforce seems certain to redouble. After all, wouldn't you think Oracle would want to own the Database.com domain?   

Foreign competition is also expected to take a bite out of the U.S. cloud computing market. According to Gartner’s Ben Pring, although interest in cloud computing has grown, many enterprises still have strong concerns about the idea of cloud computing and cloud-computing products as well as cloud services. Security is primary among these, while other concerns include availability of service, vendor viability and maturity.

Salesforce.com dismissed that train of thought when it released Database.com, stating that, “Database.com is proven and secure. More than 87,000 customers have been using it for more than 11 years to store their most sensitive data. Database.com benefits from the security of salesforce.com’s global service delivery infrastructure, offering SSL, single-sign on, identity confirmation and anti-phishing tools.”

In the end, it comes down to what the Trefis Team says: "To what extent Salesforce.com increases its market share will depend on how much the above mentioned products can gain traction going forward.”

In other news, TMCnet reported Deloitte, a major international accounting and consulting firm, and Salesforce.com Foundation, the philanthropic arm of Salesforce.com (News - Alert), announced a joint initiative to assist Inveneo, a non-profit social enterprise, to deliver affordable telecom networks to underserved nations across the globe.