Microsoft and Salesforce unexpectedly buddy up over Office 365

Partnership allows deeper connections between Office 365 and Salesforce's CRM tools, in possible sign of future collaborations

Partnerships between would-be rivals always spur questions about the motives of both sides, and the announcement of a new partnership between Microsoft and is no different.

The plan they've hatched involves allowing users of Windows and Office 365, and Salesforce's CRM products, to interoperate more deeply. Some of the functionality detailed in the announcement include new Salesforce connectors for Outlook, Excel, and Office for iPad. A Salesforce1 client for Windows itself and for Windows Phone 8.1 will also be released.

These solutions are some time off, though, with the Salesforce1 client slated for a preview release later this year and "general availability in 2015."

So what bought on a deal between two companies not normally known for being warm with each other?

The motives for the joint effort were outlined in a phone conference on Thursday, during which Microsoft CEO Satya Nadella and Salesforce CEO Marc Benioff both spoke of putting customers of both companies first, and allowing them to benefit from interoperating.

"We both view our missions as helping customers success in a new world of the cloud, social computing, mobile computing, and connectivity," said Benioff.

Benioff also spoke of how Salesforce is planning to ramp up its use of Microsoft's products to further build out its own portfolio, mainly through its exposure to Microsoft SQL Server and Microsoft Azure when developing its ExactTarget marketing product. ExactTarget was originally built using Microsoft technologies, but it was acquired by Salesforce in 2013. Benioff claims it was that acquisition, along with Nadella's ascension at Microsoft, that helped build a closer relationship with Microsoft.

What isn't happening -- yet -- is for Salesforce to allow its software to run directly on Azure. Bloomberg had reported earlier, based on unnamed inside sources, that Microsoft and Salesforce were partnering to allow the latter's software to run on the former's cloud, but such a setup seemed an unlikely change of heart for a company of Salesforce's demeanor.

Instead, as Benioff said in the conference, "This is about taking Microsoft's core strategies -- Office 365 and Windows -- and integrating it with Salesforce's core strategies, and making a combined offering that offers more value to each of our users."

Still, the rivalries that have existed between the companies, both in existing fields and in newly emergent ones, are likely to be tough to shrug off. Last year, they introduced rival identity services designed to appeal not just to users of their own services, but other products as well. And earlier this year, Microsoft revved its own Dynamics CRM after several strategic acquisitions designed to compete feature-for-feature with Salesforce.

When asked about how existing competition might affect the deal, Nadella -- like Benioff before him -- fell back on the customer as the best arbiter: "There will we some areas we will compete in, but as anyone who has a broad partnership and platform approach, you will expect us to do what our customers demand of us."

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