Why Microsoft partnered with Salesforce.com

Market Realist

Must-know: Microsoft's 2014 earnings review (Part 9 of 13)

(Continued from Part 8)

Microsoft and Salesforce.com announcement

On May 29, 2014, the coming of two leaders, Microsoft (MSFT) and Salesforce.com (CRM), announced a strategic partnership between them. Microsoft and Salesforce.com are market leaders in software and customer relationship management (or CRM) platform, respectively.

The above chart shows the survey results of different U.S.-based companies that were helpful in determining the relative market share of leading players. As is clearly evident, Salesforce.com continues to dominate the market and across all different-sized organizations. Microsoft Dynamics CRM holds the second spot in the CRM market. It is usually the preferred choice for organizations with 100 or fewer employees.

Integration between Microsoft and Salesforce.com

The partnership will offer the Salesforce1 CRM app on Windows 8, Windows Phone 8.1, and Microsoft Azure, allowing customers to access Salesforce from their Windows devices. The partnership will also create integration between Microsoft Office, Microsoft Office 365, and Salesforce software as a service application. Office 365 is expected to be a main point of integration between the two organizations. Interoperability between Salesforce and Office 365 is the key point of the deal.

The partnership is symbiotic. Through Office 365, Salesforce customers can now have access to business-class email and calendar services, online conferencing, and secure file sharing. Microsoft, on the other hand, strengthens its footage in the cloud space, a space strongly held by Google (GOOGL).

Microsoft`s uniform interface

Licensing of Windows operating system (or OS) and Microsoft Office suite contributes approximately 60%. Through Windows 8 and Surface, Microsoft launched a uniform interface across PCs, tablets, and smartphones. Surface Pro 3, the latest surface device, was released in June 2014. However, falling PC shipments and its competitor, Google Docs, are impacting Microsoft’s business. So, the company is making increased efforts to target enterprise customers through new launches.

Salesforce.com is preferred among small- and medium-sized enterprises. Salesforce1, its latest offering for tablets and smartphones, claims to have ten times more application programming interfaces than any of its other platforms. Consequently, partnering with Salesforce.com will lead Microsoft to attract more clients for its Surface tablet and mobile phones.

IBM and Apple join hands
In July 2014, IBM (IBM) announced strategic partnership with Apple (AAPL), in which IBM agreed to develop user-friendly apps for Apple’s iPhones and iPads. The partnership is expected to pose a threat to Microsoft’s position in enterprise solutions. Apple would be able to solidify its base in personal computers and tablets across enterprises.

The strategic partnerships entered by the leading players in the industry does indicate increased collaborations in the cloud space, with the aim to align and expand each organization’s products, services, customers, and ecosystem.

Continue to Part 10

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