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Salesforce New Amazon Deal A 'Slight Negative' For Cisco

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salesforce.com, inc. CRM 0.58% is building its new service based on the could computing facilities provided by Amazon.com, Inc. AMZN 0.18%. JPMorgan’s Rod Hall mentioned that Salesforce’s decision marks “a notable shift for a company that generally has used its own computing infrastructure.”

With its latest move, Salesforce joins other companies, including Netflix, Inc. NFLX 4.27%, in offering services that run on AWS even while these services compete with Amazon’s other division, analyst Rod Hall said.

On the other hand, there were several complaints on twitter after CRM NA14 went down for almost a day, which Marc Benioff apologized for on twitter. From the complaints, the downtime seemed to be caused by a database issue, WSJ noted.

“We suspect events like these would force enterprises to more aggressively consider public cloud solutions (which CRM by the way appears to be doing here as noted in the WSJ story),” Hall wrote. He added that Salesforce uses services provided by Cisco Systems, Inc. CSCO 0.71% in its internal cloud, which means that the AWS migration is “a small negative for Cisco’s overall Switching demand.”

Spending on AWS-like clouds by enterprises made up merely 5 percent of total infrastructure spending in 2015, the analyst added.

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