News

Google and Salesforce Ratchet Up the CRM Competition

Integrated solution suggests potential threat to Microsoft's hosted CRM offering

• By Kurt Mackie
• 04/14/2008

In a shot across Microsoft's bow, Google and Salesforce.com have integrated some of their hosted solutions.

Customers using Salesforce.com's customer relationship management (CRM) solution now have access to the Google Apps office productivity suite within the Salesforce.com platform. The new combined solution is called "Salesforce.com for Google Apps." It's available today for free to Salesforce.com customers.

This integrated solution now squares off with Microsoft Dynamics CRM Online, Microsoft's own hosted platform. Dynamics CRM Online is already integrated with Microsoft Office productivity suite applications, including the Microsoft Outlook scheduler and e-mail program.

A New York Times story today quoted Microsoft's CRM General Manager Brad Wilson, who indicated that the Google-Salesforce.com integration just "validates" Microsoft's approach.

"Salesforce has belatedly recognized that it is important to link CRM apps to productivity tools," Wilson added, according to the Times' account, titled "Google and Salesforce Join to Fight Microsoft."

Salesforce.com's CRM application integrates with Google App's calendar, e-mail and instant messaging applications. Users can have their e-mail activity automatically tracked within Salesforce.com's CRM application, preserving communications associated with sales activities. Documents and proposals can be shared using the collaborative aspects of Google Apps.

Sometime in the summer of this year, Salesforce.com plans to offer a supported version of Google Apps along with a supported version of Salesforce.com for $10 per user per month, according to an online presentation given by Marc Benioff, founder and CEO of Salesforce.com. The presentation, officially unveiling the new integrated application, was available on Salesforce.com's home page.

Benioff said that Salesforce.com customers have been requesting integration of Google's applications, such as its mapping capability, since as early as 2006. He added that the "standard bearers of the industry" have not come forward to meet such demands.

Eric Schmidt, Google's chairman and CEO, also provided comments during the official Google-Salesforce.com announcement. He added some context, describing how "cloud computing" is supplanting "the old model that all of us grew up with." He noted that while the software-as-a-service concept has been worked on for more than 20 years, "we now know what it takes to build this next generation of services."

Salesforce.com -- founded nine years ago -- has been at the forefront of this cloud computing effort, Schmidt added.

"They figured out first with Salesforce automation, and now with the broader platform play, how to actually self-service and even do the traditional service level agreement," he said. "That model is the defining model of the cloud computing age because it's how people will make money."

Schmidt emphasized a need to figure out a business model for cloud computing to make it work.

At least one observer sees cloud computing -- and the Google-Salesforce.com announcement -- as being a disruptive technology factor for Microsoft.

"We continue to believe that the transition to 'cloud computing' represents classic technology disruption and that Microsoft and other PC- and enterprise software companies will ultimately be in a challenging spot," stated blogger Henry Blodget.

Blodget is the one-time Wall Street analyst who gained infamy for his too favorable predictions about .com Internet companies in the 1990s. The term "disruptive technology" is attributed to Clayton Christensen in the book, "The Innovator's Dilemma," and refers to technology that destroys the business models of entrenched industries.