On May 29, 2014, Satya Nadella (CEO of Microsoft) and Marc Benioff (CEO of Salesforce.com) held a joint conference call announcing a global strategic partnership between the two firms. Details of the announcement can be found at the following links:
PR Newswire release
Microsoft community announcement
Salesforce press release
As one of the very few organizations certified on both platforms and providing in depth books and digital training on both platforms, C5 Insight is uniquely qualified to comment on this announcement and what it might mean for the customers of both products. So what has the scuttlebutt been around our office and among our clients on the topic?
Our first reaction was to say, “it’s about time!” Salesforce.com has long lagged behind Microsoft CRM in their integration with Outlook and other Microsoft products.
For one client looking for insight into the best CRM product, we provided an exhaustive 2-day side-by-side hands-on experience to 8 managers, 17 sales people and 2 IT administrators. At the end of the session, the group rated both products very highly, but gave a significant edge to Microsoft CRM in their Outlook integration rating (whereas Salesforce.com received a significant edge in the administration area). But, in the end, they overwhelmingly chose Microsoft Dynamics CRM as their first choice simply because of the Outlook integration. In the words of one participant, “it takes so much more effort just to track an email thread in Salesforce that, when I think of how much time each of us spends doing that, it’s a showstopper for Salesforce.com.” Since the time we had that engagement, Microsoft CRM’s Outlook integration has improved, while Salesforce.com’s Outlook integration has actually become outdated (working only with older versions of Outlook unless you pay for a separate Outlook integration product).
Outlook remains the standard for email management - so the enhanced Outlook integration, alone, will be a significant boost for Salesforce.com users.
But the integration will go deeper than that. Salesforce.com has agreed to integrate not just with Outlook, but also with OneDrive, Office 365, Windows Phone, Windows 8.1 and Excel. Let’s break these apart a bit to understand what this will likely mean:
In Other Words: This means that existing Salesforce.com customers will experience much better performance and ease-of-use because their CRM system will soon integrate with their Outlook, their desktop applications, their collaboration and their file sharing systems. And, for those selecting a CRM solution, it means you won’t be limited to Dynamics CRM if your team requires this integration.
When Will All of This Be Available? Well, it looks like there is a planned beta release in the fall and a full release in 2015. As these things go, I would expect several iterations before everything is fully released and integrated. So, Salesforce.com users, you probably have 12 to 24 months to go until you are totally integrated with Outlook, Office 365, Windows Phone, Windows 8.1, OneDrive and Excel. Hang in there!
If taken at face value, this partnership means very little for Microsoft Dynamics CRM users. The arrangement is clearly about retaining and expanding the users of Microsoft’s core operating system, desktop application and device investments. But let’s go a little deeper than face value…
The competition between Salesforce.com and Microsoft Dynamics CRM has ultimately always been very good for the users of both systems. It has forced both organizations to fill gaps in their offering and to add innovative new capabilities to their systems. Salesforce.com is certainly one of the top 2 or 3 companies that pushed Microsoft to invest heavily in the cloud – and now Microsoft customers derive great benefit from all of the Office 365, CRM Online, OneDrive and other online offerings. For the next year, Microsoft will retain leadership in CRM integration with Outlook, but they know that they will be losing that edge in the future. How might that inspire them to further innovate? Let’s look at past, present and future expectations.
The marketplace is already buzzing with rumors in the wake of the announcement of the Salesforce.com / Microsoft partnership.
Will Microsoft try to acquire Salesforce.com? We don’t think so. That would simply create too much overlap with other Microsoft products, would require Microsoft support a product written entirely on non-Microsoft platforms, and at a time when Salesforce.com appears to be over valued. The partnership aligns well with what Microsoft is already doing with SAP, Oracle and Apple; and with what Salesforce.com is also doing with Oracle. Nothing to see here. Move along.
Will Microsoft exit the Dynamics CRM business? Again, we don’t think so. There is plenty of room for multiple players in those areas, and the Dynamics product line (and CRM specifically), appears to be doing quite well for Microsoft. Dynamics CRM remains one of the top rated products by the industry analysts and we expect those ratings (and sales) to increase as a result of some of the recent improvements made.
Will this partnership lead to one clear winner and a loser finally? Individuals committed to one of the two solutions with a religious fervor seem to think so … but unfortunately we can’t contribute to do the drama … don’t expect this to happen unless one of the two companies makes a significant strategic blunder. Both organizations continue to invest heavily in developing their products and in acquiring new products to integrate into their suite.
We do believe the announcement is truly about serving customers. Both organizations have invested in strategies that have not produced the desired payoff and, in the end, it is their customers who have paid the price. Specifically, we believe this partnership means the following:
What do you think about the announcement? How do you expect it to impact you? Do you think it is time for C5 Insight to do another another Microsoft Dynamics CRM and Salesforce.com Side-by-Side Comparison webcast to highlight the differences between these two amazing customer management platforms?
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Outstanding analysis Geoff! Thoughtful and detailed, going well beyond the surface level.
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