Microsoft's the winner in its partnership with Salesforce

The rivals continue to build on the connection between Salesforce services and Microsoft Office apps -- but Microsoft benefits most in the long run

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Credit: iStockphoto

It was surprising enough when Microsoft and Salesforce decided to partner up earlier this year and hitch together Office 365 and Salesforce's CRM. Now they're expanding the partnership -- while being careful not to step on each other's toes. Salesforce works only with the parts of Microsoft it knows it can't replace or displace.

The official statement about the next step in Microsoft and Salesforce's joint solutions outlines three additions to the Microsoft/Salesforce family: a Salesforce1 app for Windows 8; a slew of Salesforce additions for Office, including Outlook and SharePoint; and Salesforce integration with Excel and Office 365's Power BI tools. All of the offerings are set for general availability at various times in 2015.

Strikingly, with all these products, Salesforce is only leveraging Microsoft's front end, and almost none of Microsoft's growing back end. That makes sense, as it's in cloud services where competition between the two companies is fiercest. Office 365 may be a cloud-hosted offering that includes SharePoint, but the galaxy of Office services is best seen as a way for Microsoft to retain users of its conventional Microsoft Office suite.

The real cloud offering from Microsoft is Azure, of course -- and any direct integration between Salesforce and Microsoft Azure is conspicuously missing from their team-up. No wonder: Microsoft Dynamics ERP applications have been available through Azure since the middle of last year, as a way to put the apps into users' hands without the rigmarole of standing up the apps on their own (shades of Salesforce's own "No Software" slogan). Why empower the enemy?

Trouble is, Salesforce may end up doing exactly that.The two companies ostensibly collaborate because of a great deal of overlap between the audiences for Microsoft Office and Salesforce, with each product filling needs not satisfied by the other. But the door remains open for Microsoft to lure users into its own cloud ERP and CRP apps -- by way of the very same apps Salesforce connects with.

You don't have to look far for further evidence of the two companies continued clashes. In a recent blow against Salesforce, Microsoft cut pricing on its CRM Online bundle -- a package that includes Office 365 and the Power BI tools to which Salesforce will add connectivity. And the two have squabbled in the past over everything from competing single sign-on technologies to patents (the latter settled through mutual cross-licensing agreements).

Small wonder Salesforce and Microsoft are happy to work together for a change. But given what's being offered to whom, Microsoft might be getting the better part of the deal.

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