According to my colleague Dan Farber, Microsoft CEO Steve Ballmer roared about salesforce.com amongst other things at the company's mid-market conference in Redmond. In his coverage, Farber wrote that "[Ballmer] also took a swipe at salesforce.com, saying that Microsoft would give salesforce.com a 'very effective run for its money.' Details about that assault weren't forthcoming." According to InfoWorld however, Microsoft will be offering hosted CRM to the mid-market which would put the Redmond giant in a head-to-head battle against salesforce.com. Salesforce.com Marc Benioff, who is never at a loss for words when it comes to competitors who typically make their money on "on-premises" solutions (aka: shrink-wrapped software), took no time in blasting a response via e-mail to the press. Wrote Benioff in that e-mail:
Microsoft's failed enterprise software strategy has let the industry down. We have competed against them in the CRM market since 2002, and they have failed to deliver a competitive product. They just cancelled version two of that legacy application and skipped ahead to three. In the meantime, we are on the 18th generation of our service in just six years. Customers are tired of waiting for Microsoft to innovate.
If nothing else, Ballmer definitely has his best game face on and Benioff is daring him to bring it on. Where this battle will end up and how Microsoft intends to shoot down salesforce.com's rising star is hard to tell. Microsoft has been on the acquisition path as of late and one very quick way to get into the game is to acquire one of the other hosted CRM darlings like Rightnow. Both Benioff and RightNow CEO Greg Gianforte have scoffed at the idea of a merger between the two companies. But maybe the two will reconsider just to keep RightNow from falling into Microsoft's hands.
Meanwhile, CRM titan Siebel has been quick to point out that the number of seats that are signing up for on-premises solutions still blows away the number of seats that are signing up for ASP-style hosted solutions like salesforce.com.