Cloudy glasnost for Microsoft and Salesforce.com, but what must Bernard think?

Profile picture for user slauchlan By Stuart Lauchlan May 29, 2014
Summary:
Microsoft and Salesforce.com have announced they are now the new best of frenemies, so customers like Bernard should no longer be fought over by the former CRM arch-rivals.

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Bernard makes his debut

As I write this, I find myself thinking about Bernard and wondering what he'd make of it all.

Who’s Bernard? Bernard was the ‘unhappy customer’ (AKA a stock photo model) who appeared in Microsoft’s Salesforce.com-bashing adverts back in 2010, before being hauled on stage at Dreamforce that year to come back into the Salesforce.com fold in a typical Marc Benioff marketing coup de grace.

It was a simpler world back then. Microsoft in one corner, Salesforce.com in another and a battle-royal to win the hearts, minds and budgets of millions of Bernards. These were two companies that traded insults and lawsuits as Microsoft sued Salesforce for nine patent infringements and Benioff dubbed Microsoft a patent troll.

As recently as last year, the Salesforce.com CEO was calling Microsoft such a disaster” that only Bill Gates could save it.

So what would poor Bernard be thinking if yesterday he heard Benioff declare:

I've always wanted to have a closer relationship with Microsoft, and now we do.

Yup, Salesforce.com and Microsoft have become new best frenemies. At this point, with similar shock vendor tie-ups in the past, I've turned to that old cliche: only Nixon could go to China.

But in this instance I think a better comparison would be UK Prime Minister Margaret Thatcher's observation on the Soviet Union’s Mikhail Gorbachev at the height of the Cold War that here at last was a man she could do business with.

Now, I’m not getting into who’s who in this analogy - that way madness and law suits lie! - but I'll just say that I can’t imagine yesterday’s announcement happening under the Steve Ballmer regime. (Sorry Marc, I think I just cast you as Maggie :-( )

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The best of frenemies

But in the new era of cloud glasnost under Satya Nadella as Microsoft CEO, perestroika is not only possible, but clearly commercially advantageous.

Benioff confirms:

 I started working with Microsoft first in the mid-1980s and our relationship, of course, has changed and evolved as the technology has changed and evolved over the decades.

Today, we're announcing a very important interchange between our technologies, and first and foremost when we acquired ExactTarget, we acquired a stronger relationship with Microsoft. That changed.

And when Satya became the CEO of Microsoft, that gave us the opportunity to have an even stronger relationship with Microsoft, and that changed.

The new era

Nadella’s not been afraid to move closer to rivals as we saw with the decision to make Office available on the Apple iPad. But given Microsoft already has its own competitive CRM offering and bearing in mind the feisty nature of the Microsoft channel, this is a pretty major move.

For his part, the Microsoft CEO concedes:

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.

So what's the skinny on all this beyond a cordial press and analyst call. The details to date:

First up, there will be Salesforce1 for Windows and Windows Phone 8.1. A preview is slated for fall 2014, general availability in 2015.

Then there are plans for Salesforce for Office 365 which will allow customers:

  • 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.
  • Connect Salesforce data to Excel and Power BI for Office 365 to visualize information.

A key driver for this alliance is clearly ExactTarget, a dyed-in-the-wool SQL Server shop when Salesforce.com bought it and put it at the heart of its Marketing Cloud strategy.

Under the new rapprochement, Microsoft will extend its use of ExactTarget for marketing and Salesforce.com will keep using SQL Server for ExactTarget as well as use Azure for testing and development for ExactTarget.

Benioff says:

We’ve been so excited to work with Microsoft in embedding ExactTarget into Office 365. So to see them using more ExactTarget within Microsoft is exciting.

That encourages us to use more SQL Server. SQL Server is something that I've watched grow from just an idea at Microsoft to a $6 billion business, and I'm sure will be a $10 billion business and one of the very largest and most important database products in our entire industry. Salesforce is more committed to using SQL Server today than ever.

What the deal is not is about adding Azure as a new Salesforce.com platform, although the firm will use the Microsoft offering as part of its internal development environments.

Benioff was quick to emphasis the message that Salesforce.com uses multiple platforms behind the scenes, but that this is invisible to subscribers:

We do have different development environments at Salesforce, but those development environments truly are transparent to our users.

Today, of course, Heroku is built on AWS, Salesforce's core services use its core development centers in our own core data centers. And ExactTarget runs in its own data centers and also in other heterogeneous cloud services.

This is an opportunity for us to bring in new services from Azure, as appropriate. Our customers themselves don't necessarily need to know about that. What they need to know is that Salesforce's platform is integrated and works well together.

You're going to see similar integration between ExactTarget Fuel and Force.com and Heroku. But, in no cases do the customers have to be aware of what is underneath. Those are decisions that we're making. They don't need to know are we using SQL Server, are we using Oracle, are we using something else.

My take

After last year’s ‘Oracle Week’ when Larry Ellison’s empire reached out to Microsoft, NetSuite and Salesforce.com, I suppose we should be used by now to emulating the Queen in Alice in Wonderland and being ready to believe 6 impossible things before breakfast.

Still, this tie-up came somewhat out of the blue, but on the surface (no pun intended) looks like a good thing for all concerned.

Of course, such vendor relationships can be ephemeral. Remember last year when (for about five minutes) we all thought that Salesforce.com would be using Oracle HCM internally!

Benioff argues poetically:

I really believe that relationships are eternal, and it's the technology itself that's temporal.

Nonetheless, the devil will be in the detail.

That said, customers should be the real winners if both Salesforce.com and Microsoft execute on this alliance as planned.

It remains to be seen however what the Microsoft channel will have to say on the matter. This year's Microsoft Worldwide Partner Conference in July should be interesting.

What else have we learned?

We are reminded Marc Benioff is ready to be commendably pragmatic when it comes to gaining easier access to a huge addressable market.

We realize yet again that Satya Nadella is indeed a very, very good thing to happen to Microsoft.

And we can hope that there will be no further reason to squabble over who Bernard likes best!

 

Disclosure: at time of writing, Oracle and Salesforce.com are premium partners of diginomica.