Co-opetition: Microsoft-Salesforce.com partnership doesn't mean the end for Dynamics

Microsoft and Salesforce.com have announced a strategic partnership that will allow Salesforce’s new CRM platform, Salesforce 1, to integrate with Windows, Windows Phone and Office 365.

The deal will help Salesforce.com in its drive towards making CRM software more mobile, while also pushing them closer towards CEO Marc Benioff’s vision of people one day “running their businesses entirely from their phones”.  

In a press call on Thursday, Benioff said the partnership was part of their “mission of helping customers succeed in today's new world, a world of the Cloud, a world of social computing, of mobile computing, of connectivity”, while Microsoft’s new CEO, Satya Nadella added that the deal was about “empowering people to use Office 365 and Salesforce seamlessly together, whether it's sharing Office documents in Salesforce1 or analysing CRM data in Power BI for Office 365”.

Jeremy Cox, Ovum’s principal analyst for CRM and enterprise solutions, says the announcement comes as no surprise, and that both companies are bringing together what has long been noted as a need from customers for their combined products:

“I think this has happened because Microsoft is making inroads into the mobile space with its tablets and smartphones (Nokia Lumia particularly) and the iPad is no longer the only option. Even if firms wanted to stick with one platform the BYOD phenomenon has disrupted that idea, and business is increasingly done on the hoof.

“Whilst both compete there is also a degree of complementarity and customers want both. This makes sense. I still think the idea of running a business from a smartphone is aspirational though, as the battery life doesn’t help!”

One immediate question that emerges from the deal is how exactly Microsoft Dynamics will fit into the equation. However, when queried over the topic during their press call, both CEOs gave fairly nebulous responses, with Nadella stating, “there will be some areas that we will compete in. But at the same time, I think as being anyone who has got a broad partnership and a platform approach, you will expect us to do exactly what our customers demand of us on those respects.”

Benioff was equally as vague, adding that, “Satya and I have both been in this industry a long time and the reason that these relationships work is because Microsoft's core strategy is Windows and Office, that's where the revenue comes from. And Salesforce's core strategy is our CRM apps. That's where our revenue comes from. And we both want to grow our revenues, so we know that we need to be investing in our core and in our strategies.”

Jeremy Cox is optimistic about Dynamic’s future, despite Microsoft’s seemingly ambiguous stance: “The market is still expanding for CRM as it goes deeper within the organisation vs the old triumvirate of just the sales, marketing and service," he says. "Ovum Global research shows this growing from around $15bn in 2013 to over $26bn by 2018.

“CRM is morphing into a customer hub around which adjacent applications can be used to support omnichannel experience. Deep integration with back office and supply chain will enable organisations to become more customer-adaptive and increase their relevance to customers as a result. In that context closer integration and collaboration [between Microsoft and Salesforce] makes considerable sense. Lastly it is refreshing to see this more mature co-opetition perspective from two major players in the CRM space and the customer will end up being the winner. This new reality is already underpinned by some of the other major CRM providers such as SAP, Oracle and SugarCRM making it easier to co-exist with competitor offerings, in the cloud  on premise or a hybrid of the two.”

A press release from Microsoft added that a preview of Salesforce 1 for Windows would become available as of Autumn this year, going on general sale some time in 2015.

Some of the key features will be the ability to “access, share, edit and collaborate on Office content from within Salesforce and on Salesforce1 using Office Mobile, Office for iPad and Office 365,” as well as being able to use Salesforce.com and Outlook together and connect Salesforce data with Microsoft Excel.