Jun 022014

After years of competition and mutual slagging what is left for Microsoft and Salesforce.com to do?

Why, make nice and “partner” of course.

In the past, Salesforce.com CEO Marc Benioff has opined that Microsoft’s latest operating system Windows 8 is going to be the “end of Windows.” Windows 8 would render Windows “irrelevant.” Benioff’s pokes at Microsoft have only been second to his jabs at his mentor and investor Larry Ellison and Oracle.

Benioff recent opinion of Microsoft: “follower, not a leader.”

So, naturally, it comes as no surprise that that the two companies have… banded together. “We are excited to partner with Salesforce.com and help customers thrive in a mobile and cloud-first world,” said Microsoft chief executive Satya Nadella. Salesforce.com will be available and compatible with use on Microsoft’s Surface tablets and Windows mobile phones.

Salesforce.com access and compatibility will be written into Microsoft’s Cloud Office Suite, Windows 365. The move should not be surprising. Nadella was hired to and has promised to further reorient Microsoft to the Cloud Computing movement. Microsoft has taken great strides in this arena with the aforementioned O365, Windows Azure and cloud versions of its other products. More recently Microsoft has announced an Office Suite for Apple’s industry-leading tablet, ipad.

The public and analysts seem to have forgotten that Microsoft and application developer SAP have a long-standing development and interoperability agreement. SAP apps are being written for Microsoft’s Azure environment, while the Duet Enterprise agreement has allowed SAP applications to connect to Microsoft solutions like SharePoint.

Several questions come to mind.

1- What does this deal say about the status of Microsoft CRM within Microsoft and the CRM world? Unit lead Kirill Tartarinov insists MS CRM is here to stay, but he would say that, wouldn’t he? Nonetheless, it is true that the only CRM offering that has slowed down Salesforce.com in recent years has been Microsoft’s and the product is one of several that are sold as a SAAS offering. Yet, rumours that Microsoft will abandon the low-margin application business have been around for years.

2- Will this deal cheapen Microsoft’s competitive brand in the Cloud by officially yielding leadership to Salesforce.com or be proof of Microsoft’s new age of ‘Cloud first’ thinking?

3- Is this deal even worth discussion in the first place? The fact that Salesforce.com is a Cloud visionary and Benioff and Nadella met in person suggests significance. Having said that, who remembers this Agreement?

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