Microsoft and Salesforce.com Announce Strategic Partnership

Microsoft and Salesforce.com late Thursday announced a strategic partnership to create new solutions that connect Salesforce.com's customer relationship management apps and platform to Microsoft Office 365 and Windows.

Under the deal, Salesforce will release Salesforce1 for Windows and Windows Phone 8.1. This will allow Salesforce customers to access the Salesforce CRM solution from their Windows mobile devices. A preview is planned for the fall, with general availability in 2015.

Salesforce will also release Salesforce for Office 365, with new interoperability between the two solution sets. Users will be able to access, share, edit, and collaborate on Office content from within Salesforce and on Salesforce1 using Office Mobile, Office for iPad, and Office 365; use OneDrive for Business and SharePoint Online as integrated storage options for Salesforce; use Salesforce and Outlook together with a new Salesforce App for Outlook; and connect Salesforce data to Excel and Power BI for Office 365 to visualize information and find new insights.

Also as part of the deal, Salesforce will expand its use of Microsoft's SQL Server, database, and Azure cloud technology, particularly within its ExactTarget portfolio.

During a press conference call late yesterday afternoon, Salesforce Chairman and CEO Marc Benioff and Microsoft CEO Satya Nadella both said the partnership will bring value and productivity to customers of both companies.

"We are excited to partner with Salesforce.com and help customers thrive in a mobile and cloud-first world," Nadella said. "Working together, we'll deliver new solutions that connect the customer insights of Salesforce to the cloud productivity of Office 365, the cloud platform of Azure, and the mobility of Windows, so our customers can do more."

"Today is about putting the customer first," Benioff said. "Together with Microsoft, we are building bridges that allow customers to be more productive."

Benioff also said the partnership comes in response to customer demands. "Customers need and want us to work together," he stated. "They want to be able to work with Office and Salesforce together."

Nadella agreed. "Having the two leading SaaS applications coming together is what customers expect of us," he said.

While the press conference was warm and congenial, Benioff in the past has been critical of Microsoft. Benioff acknowledged this during the press conference, and said the relationship has changed. "Microsoft is making all the right moves to transition customers to the cloud," he said.

When Salesforce acquired ExactTarget, it acquired a stronger relationship with Microsoft, and ExactTarget is already embedded within Office 365, Benioff pointed out.

The two CEOs also admitted that there will still be areas where Salesforce and Microsoft compete head to head. Microsoft, for example, has its own Dynamics CRM product line, and that will not be affected by this deal.

"This is about putting the customer first and extending the power of Salesforce within the Micrososft Office and Windows environment," Benioff said.

And while the deal is a big boost for Microsoft, Google, Apple, and Oracle are seen by industry analysts as the big losers here. Salesforce has long touted Google's Gmail and Google Apps as the perfect complement to its CRM products and relied on Apple as a mobile platform. Then, just a year ago, Oracle and Salesforce announced a partnership whereby Salesforce would standardize on Oracle Linux and the Oracle database.

"While Salesforce showing some marketing love to Microsoft is a nice gesture on the surface, the winner of this announcement is clearly Salesforce," concludes Rebecca Wettemann, vice president of Nucleus Research. "This announcement is good news for Salesforce users that will have a more streamlined way to work between Office, Outlook, and Salesforce, and good news for those worried about Office 365, SQL Server, and Azure sales at Microsoft."

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