Salesforce and Google team to conquer the enterprise

Salesforce has just released (see all coverage) the long-awaited integration of its CRM applications with Google Apps, embedding email, documents, online chat and integrated calendaring directly into its core sales force automation, marketing and customer service applications. I've had advance warning of this move, as [in a paid engagement — see disclosure page] I wrote the white paper for today's launch. Here are the key takeaways in my view.

This is a huge validation for Office 2.0 — the whole notion of collaboration and productivity applications delivered from the cloud. Salesforce.com has more than 41,000 customers, including a growing number of large enterprises. It's now saying unambiguously to all those customers that Google Apps is its preferred productivity suite. The integration is far in advance of anything achievable with MS Office. Product manager Kraig Swensrud, who has been closely involved with the project, described the Google Apps components to me as 'first-class citizens' within Salesforce.com.

This will spread faster than people expect or realize. When it takes just a mouse click to open Gmail and have the message saved with the prospect record, it won't take long before Gmail becomes the default email system for most Salesforce users. The Google Talk integration is just as compelling. The ease of storing and sharing documents along with prospect records will make people want Google Docs to become the system of record for sales and marketing documents, even if they still use MS Office to create and edit the originals — but many users will feel just as comfortable working natively in Google Docs.

The viral effect within enterprises is going to be significant. Once one or two people within a workgroup start sending others links to view and share their Google Docs documents, it'll reinforce usage of the online apps by everyone in the same group. They'll also share documents with colleagues in other departments and with partners, customers and prospects, exposing many more to the experience of using Google Docs.

Much of this will happen under-the-radar. David Armstrong, product and marketing manager for Google Enterprise in EMEA, told me yesterday that Google Apps already has half a million organizations — not individuals, organizations — signed up worldwide, with 2000 more signing up every day. But that astounding adoption rate is visible only to Google. There are no shrinkwrap packages passing through distributors' warehouses or flying off retailers' shelves. There's not even any money changing hands for sign-ups to the free version. It's just an invisible stream of bits in the ether. Adoption will be mostly unseen, until one day it will suddenly have become too big to ignore.

I know some of my ZDNet blogging colleagues are skeptical that enterprises — particularly the larger, most established organizations — will be comfortable using Google Apps. Josh Greenbaum dismisses the relevance of Google Apps to Salesforce.com users because "Google’s terms of service severely hamper the usability of its Apps in the real world of corporate computing," a view seconded by Dennis Howlett, who also criticizes Google's release cycles: "Google is among the slowest to get things done. Even when it does, there seems to be no development strategy or roadmap that discerning buyers can assess. That’s not comforting to business buyers."

When I put those criticisms to Armstrong on Friday, he wouldn't be drawn, stressing that, "What we're announcing here is fundamentally a reseller agreement." Google evidently won't be rushed on resolving these defects until it becomes convinced of the need, which may put a brake on announcing larger deals. But let's not forget that similar criticisms were advanced a few years back as reasons why enterprises weren't going to adopt CRM from unproven on-demand vendors like Salesforce.com. Part of the genius of the company's strategy was in picking a core application where business decision-makers have a great deal of autonomy. Sales and marketing departments tend to get what they want, and if they want Google Apps, there are very few organizations out there where IT will override them (added to which, many individuals within corporations are already using these tools unofficially for aspects of their work anyway).

This is a showcase for on-demand integration. Salesforce for Google Apps is a close integration of two distinct on-demand application stacks, in which both applications can continue to follow their separate upgrade and evolution paths without breaking the integration. All the integration is based on APIs (in fact both Salesforce and Google have added some extra APIs to round out the integration). Like all APIs in the on-demand world, they've been designed to allow each application to upgrade separately. They'll also permit other applications to be linked in, making it possible to build a completely integrated suite of applications to run a whole company. Later today, the first integrations built in that way will be announced by three partners of Salesforce.com and Google, and it'll be a key message of the launch. As Google's Armstrong told me, "We're really excited about the opportunities this creates for the developer community to build a set of applications, tools and integrations that we can only imagine."

Salesforce for Google Apps is a PaaS offering. Because of the two APIs and Salesforce.com's Force.com development platform (I'm excluding Google App Engine because Google itself has already ruled it out for business use), it's possible to build on top of Salesforce for Google Apps to create additional functionality and — most important of all in an enterprise context — to create workflows and business processes that flow and leverage collaboration, email and documents across multiple applications. This is potentially one of the most powerful attributes of the combination.

It's worth recalling for a moment the enormous disappointment a year ago when Salesforce first unveiled its alliance with Google. The announcement had been overhyped and rumors had swirled for several weeks prior, including my own speculation whether Google might buy Salesforce.com. With far less hype this time (apart from an over-enthusiastic Reuters report, which Salesforce.com can hardly bear responsibility for), I believe today's release has fulfilled many of those early expectations. It's taken a while, but that's because the two companies' developers have worked together to create a solid integration that is live and ready to use now — except for certain aspects including several of the new API hooks, which won't be available for custom use until Salesforce.com's summer release.

For Google, the combination brings Google Apps into big enterprise accounts and also expands its footprint among smaller businesses. For Salesforce.com, it expands the reach of its Salesforce application and further validates its Force.com integration and development platform. But more importantly for both of them — and for the rest of us who are committed to the on-demand model — it puts extra weight behind the gathering trend towards running business applications and computing in the cloud. Marc Benioff is fond of saying that we often achieve less than we expect in a year, but more in a decade. In the past year, it may seem that little has been achieved. But in a decade's time, we may look back on this moment as one of the key turning points in the shift to on-demand.

UPDATE [added 4:40 am PDT, plus Sxip para at 6:20 am]: Some links of note. On the Appirio blog, Ryan Nichols has introduced the four applications being launched today by the Salesforce and Google integrator. The post also makes a strong argument for the business value of integrating the two application stacks together.

Also Astadia, probably the largest specialist on-demand integrator, has just issued the press release announcing its two new applications for Salesforce for Google Apps.

The full list of add-ons is at a new AppExchange category page for Google Apps. Also included on the list is a potentially invaluable free utility from Sxip Identity, the Sxip User Manager, which "allows administrators to provision and manage users to both applications from a single screen" and also gives users single sign-on to the two application stacks.

Henry Blodget does a good job of outlining the Innovator's Dilemma position that Microsoft is getting squeezed into as Google Apps accelerates its penetration of the enterprise. It dovetails with my own argument outlined above and in my white paper why this combined offering will make strong headway even while people continue to argue that it can't.

Finally, my ZDNet colleague Larry Dignan debates Google and Salesforce.com: Why don't they merge?. I've added my take in a comment. I'm not sure that Google would stomach the price. I'm also doubtful whether Google has yet accepted how much it needs to learn to sell effectively in the enterprise — it may even be arrogant enough to believe that it doesn't have to, because it's changing the rules of the game. I think Benioff would be wise to hold out for now if the approach did come.