Salesforce.com is challenging Oracle by entering the business of selling database programs that manage vast arrays of corporate data. Salesforce announced its new Database.com service as it diversifies its lineup of software programs for businesses.

The company has long generated the bulk of its revenue from selling software for managing corporate sales and marketing activities, but has branched into other areas in recent years in a bid to accelerate sales growth.

Database.com is built on the same cloud computing model as Salesforce.com's existing products: Salesforce.com will host the database, which customers will access via secured connections over the public Internet. The fee covers software costs, hosting and data storage.

Database.com, which will be available, next year, can store data for applications written for Facebook, Twitter, Apple iPhone and iPad as well as Google Android operating system for smart phones.
It is also compatible with applications that run on cloud computing systems from Amazon.com, Google and Microsoft.

The makers of top-selling databases Oracle, Microsoft and International Business Machines typically require businesses to buy software in advance, install it on their own computers and then employ staff to maintain those systems.

"It's an alternative delivery method," said Donald Feinberg, Analyst, Gartner who estimates the value of the database market at about $21 billion a year. "They could very possibly be on to something."

"Database.com is the second major fully cloud-compatible database management software system on the market, following Microsoft's launch earlier this year of SQL Azure," said Feinberg. "It would likely take at least several years for cloud databases to present a serious challenge to old-style versions of the technology as many businesses are uneasy about handing sensitive data over to a third party. Salesforce.com's entrance in the market ought to spur adoption because the company has a reputation for providing reliable service and good data security."