Salesforce Guns For Microsoft With Google’s Help

SAN FRANCISCO — upped the ante this week in its battle against traditional software vendors with the
announcement of Salesforce
for Google Apps
. CEO Marc Benioff all but declared packaged software
dead here Monday during the unveiling of his company’s integration of its
on-demand customer relationship management (CRM) applications with Google

The two companies already had a
but Monday’s news significantly expanded the
relationship. Still, at least one analyst said the new offering is nothing
for Microsoft to be too concerned with as far as its near time impact on
enterprise customers.

Tom Kucharvy, vice president for market research firm Ovum, said he
doesn’t think Microsoft has anything to fear that corporate sales of its
cash cow, Office 2007, is threatened by the news, at least for now. “Their
upgrade legacies are so strong, ‘Salesforce for Google Apps’ will not have
any effect on them for years to come,” Kucharvy told

He also noted most large organizations are much slower to upgrade,
whereas “small and mid-sized companies have no legacy to protect and fewer
security concerns.” He thinks eventually a cross-section of customers, from
SMB’s to enterprise, will be interested in Salesforce for Google Apps, but
for now SMBs might prove to be a more fertile sales territory.

Last year, the two firms began a formal working relationship with the release of
Salesforce Group Edition with Google AdWords. “It was a huge success and
offered a clear vision that we could do more with Google,” Benioff told the
luncheon meeting here at a downtown hotel.

Salesforce (NYSE: CRM) had been using Google Apps internally because “we
don’t want to be installing more software, we don’t want to be upgrading
more software, we want to use e-mail right in the cloud,” said Benioff.

One company that has begun testing Salesforce for Google Apps is UST
Global, an application development and services company. Prasan Vyas, a
director with the company, said right away he could see the integration
generating enthusiasm among his staff.

“We were using Salesforce and third-party applications and having to
send the file, Word documents, Excel spreadsheets and Powerpoint
presentations, as attachments to Salesforce documents,” he told “With this option, they can work entirely on the
Internet and many users are saying they are much more likely to use more because of the integration.”

Salesforce CRM and Google Apps are based in the cloud, but functioned
separately. The integrated offering gives salespeople the ability to, for
example, send a sales lead with an attached spreadsheet and not have to
launch a separate application.

Google (NASDAQ: GOOG) chairman and CEO Eric Schmidt, also present, said
this represented the new model for client computing services. “The
Salesforce model is the defining model for the client computing age,” he
told the audience.

“The first step is build the business, add the customers, get the
reference accounts and built the underlying technology to make this change
happen,” he went on to say. “This is a twenty, thirty, forty year vision,
not a one or two year vision. This is the development of a real business.”

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