The day after the Salesforce deal: What about Microsoft CRM?

The day after the Salesforce deal: What about Microsoft CRM?

Summary: What does the newly forged Microsoft-Salesforce partnership mean for Microsoft Dynamics CRM customers and partners?

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A new partnership between rivals Microsoft and Salesforce.com has left some Microsoft Dynamics CRM customers and partners wondering about the future of Microsoft's own CRM offering.

dynamicscrmfutures

With its Dynamics CRM product and service, Microsoft has been chasing CRM market leader Salesforce for years. So it had to be a bit odd for Microsoft's Dynamics team to hear Microsoft CEO Satya Nadella say "We are bringing the leading CRM application to Windows devices, both phones and PCs" -- in reference to Salesforce, not Microsoft Dynamics CRM -- as he did yesterday. 

On May 29, Microsoft and Salesforce announced a partnership via which a Salesforce1 CRM app for Windows 8 and Windows Phone 8.1 are in the works and will debut in beta form later this year. (It's not clear from the announcement who will build and support the app and whether Microsoft is paying Salesforce as part of the arrangement.) The pair also announced continued integration between Office and Office 365 and Salesforce's marketing cloud offering.

Microsoft launched its own Dynamics CRM apps for Windows Phone and Windows 8 in the fall of 2013.

Kirill Tartarinov, the Executive Vice President of Microsoft Business Solutions (the Dynamics CRM and ERP unit), said in a blog post yesterday that Microsoft and Salesforce will continue to compete while continuing to partner. From his post:

"Salesforce is acknowledged for their leadership in shaping this industry by delivering applications in the cloud. Microsoft Dynamics CRM is one of the fastest growing products at Microsoft and shows no signs of slowing down as we continue to innovate and make progress. Our unique ability to deliver agile, simple to use, end-to-end solutions that take advantage of all Microsoft technologies puts us on the precipice of tremendous opportunity to impact businesses and organizations throughout the world."

Tatarinov also noted that Microsoft will be rolling out its Spring 2014 CRM Update, a k a codename "Leo," next week. Select users and partners started seeing the update as of late last week.

Alongside the Spring update -- and its on-premises complement, known as Dynamics CRM 2013 Service Pack 1 -- Microsoft will be rolling out Social Listening, its social-analytics app based on technology it acquired when it bought Netbreeze and Microsoft Dynamics Marketing, the new name for Microsoft's marketing-automation app. 

Salesforce CEO Marc Benioff said that Salesforce would be doing some testing and development using Microsoft's Azure cloud, but wouldn't be putting any of Salesforce's core CRM apps or services on Azure. Salesforce's Heroku platform runs on Amazon's AWS, and will continue to do so, Benioff said.

Microsoft's Dynamics CRM Online isn't yet hosted on Azure, either. (Dynamics CRM can run in a virtual machine on Windows Server in Azure.) But Microsoft is using Azure as the base for some of its newer CRM-related components. Microsoft Social Listening runs on Azure, a spokesperson confirmed. And Microsoft Dynamics Marketing is using Azure storage.

Topics: Cloud, Enterprise Software, Microsoft, Salesforce.com

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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14 comments
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  • Withering on the vine?

    Clearly, MS's own CRM product has just suffered a major setback. MS has a long history of "sticking it" to its partners. It is the reality of business however, that hitching your wagon to a single player leaves you totally at that partner's mercy. The partner has no choice but to make decisions ensuring its own success, and if that makes you a casualty, then that should not really come as a great surprise. I certainly does does highlight the risk however.
    Economister
    • "sticking it to its partners" - often said, but wrong

      People say this so often that they believe it. And while on the surface it can appear that MS "sticks" its partners a deeper understanding is required.

      Microsoft only tends to create competing products to its partners when it has to. And then they charge premium prices.

      Some examples AV, Surface, Phone but in each case they had no choice if they wanted to compete in the space.

      Microsoft has probably the strongest partnerships of any company that I can think of (Intel being another). One of the reasons Microsoft survives is that vendors make a lot of money off of Microsoft and they don't make a lot of money off OSX, Linux or other competing platforms. Vendors then keep promoting Microsoft products.

      It was interesting but when Microsoft entered the AV space the number of AV companies grew. The eventual decline was due not so much to MS free AV but that AV was becoming less of a concern compared to browser and kernel vulnerabilities that required no malware but simple scripting.

      Now there are some areas where Microsoft decided to compete. CRM being one of them.
      MeMyselfAndI_z
      • Really?

        Ask Stacker...
        Corell/Novel...
        And don't forget Apple...
        Blue Mountain...
        I4I...
        Sendo...
        And the ever popular OS/2 lawsuits...

        LONG history of "sticking it" to its partners.
        jessepollard
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      Yestu1954
  • Microsoft (as a platform) works hard with it's partners

    Microsoft has a long tradition of strong cooperation with partners with which it competes. For example, I'm pretty sure that there's a team in the Windows Server group that works closely with Oracle to make sure that the platform delivers what Oracle needs. If Oracle asks for a tweak in the way I/O works, then there's a good chance they'll get it.

    This all goes on without the SQL Server group knowing about it. "Coopetition" is a tradition in Redmond (and out in the Microsoft field).
    Flydog57
    • Only when it favors Microsoft...

      Now, MS may have changed its spots... But that has yet to be shown.
      jessepollard
  • Serving Real World Customers

    To encourage adoption of and satisfaction with the Windows 8 and Windows Phone platforms by enterprise customers - or any customers for that matter - it is important to have widely-used applications available. Microsoft must be realistic about what technology customers use.

    The fact Salesforce can be accessed via an app instead of via a browser and will integrate with Office 365 and OneDrive/Sharepoint doesn't really impact Dynamics CRM customers. Dynamics CRM differentiates itself in other ways, and it already has Win 8/Win Phone apps and service integrations.

    I have no doubt Microsoft will continue building and improving Dynamics CRM, but for those Win 8/Win Phone customers who use Salesforce, there's an app for that.
    Jgarrettca1
  • who said?

    you set up a straw man in your opening paragraph - "has left some Microsoft Dynamics CRM customers and partners wondering about the future of Microsoft's own CRM offering."

    name one. show a quote or two.
    boobuhbuhloo
    • If you would like a long list:

      http://www.groklaw.net/staticpages/index.php?page=2005010107100653

      These are just the legal issues that have come up... Those that never made it into court filings aren't present. And there are quite a few from out of the country.
      jessepollard
  • This is good for Microsoft

    I don't really think that this move will have too much of a direct impact on Dynamics. Yes, Salesforce grew up as a CRM, but is really now more of a business platform. Companies interested in Dynamics may be of a very different mindset than those attracted by Salesforce.

    Regardless of that, this is good for Microsoft's core products such as those represented by Office 365. For instance, we've considered moving away from Microsoft to products that will play nice with Salesforce (and other tools), such as Google Apps (egads). However, we've never considered moving away from Salesforce to a CRM or platform that plays nicely with Office.

    In addition, when comparing hosted Microsoft solutions (Exchange, Sharepoint, Lync, etc), companies that use Salesforce may now strongly consider sticking with straight-up Microsoft via Office 365. In the long run this is good for Microsoft and frankly makes my life easier. It might not be great for consumers, but I'd rather see someone come along and compete strongly with Microsoft products rather than having competition be a bunch of companies offering hosted Microsoft solutions....which is feeling more and more like and old school concept.
    Boden2
  • CRM

    this sounds great if it does what I think it does and they actually use it for feedback :)
    dnationsr
  • Smart Move

    The strategy trying to suffocate the rest of the IT world with MS products failed. Nadella is not scared to send the signal to the market that Microsoft failed in some areas. That gives hope for a better future of Microsoft.
    hengels
  • Moving some chips

    As a former Salesforce Consultant, turned Dynamics Partner, I am not sure yet what this means. But the part of the announcement about building integrations for Salesforce with Office 365 concerns me as that has been a big advantage for Dynamics.

    Dynamics has been slowly gaining ground on Salesforce recently, but make no mistake, Azure is the new darling. I think that Nadella has moved some chips from his slow growing Dynamics stack over to his Azure pile where he seems to be trying to go "all in".
    SteveMordue
  • This Could be Good for Dynamics CRM Customers...

    Dynamics CRM has moved ahead of Salesforce.com in some areas, but has lagged behind in some very important areas. This partnership means that Salesforce.com will catch up in the area where it has shown the greatest competitive weakness for years (Outlook and Office integration).

    Why would this be good for Dynamics CRM and the customers of that platform?

    Because it will now put pressure on the Microsoft CRM team to catch up in the areas that have long been gaps in that product versus Salesforce.

    More detail and analysis:

    http://blogs.c5insight.com/Home/entryid/461/The-Salesforce-com-and-Microsoft-global-partnership-what-it-means-for-CRM-customers

    http://blogs.c5insight.com/Home/entryid/462/The-Salesforce-and-Microsoft-Partnership-Part-2-How-it-Will-Impact-the-Companies-and-the-Marketplace
    GeoffAbles