Why The MS/Salesforce Deal Hasn’t Killed Dynamics CRM

Why The MS/Salesforce Deal Hasn’t Killed Dynamics CRM

Last week, Microsoft and Salesforce.com announced a somewhat surprising alliance that will see tighter integration between Salesforce.com and Office 365. As soon as I heard about this, I wondered: what does that mean for Dynamics, Microsoft’s own CRM package?

One of the main selling points for Dynamics is tight integration with existing Microsoft products, so a shift to a cosier relationship with Salesforce.com might suggest that Microsoft is readying for an exit from that market. And Microsoft CEO Satya Nadella arguably didn’t help by brushing off a question about the future of Dynamics during a conference call with this non-answer:

That partnership is what we wanted to talk about today. There will be some areas that we will compete in. But at the same time, I think as being anyone who has got a broad partnership and a platform approach, you will expect us to do exactly what our customers demand of us on those respects.

Despite that, when you look at the substance of the announcement, it seems clear that Dynamics isn’t under immediate threat. The only product under the deal with anything resembling a timeline is a specific Salesforce1 app for Windows and Windows Phone 8.1. That’s supposed to go into preview by the end of Q3 this year, with general availability at some point in 2015. (Unsurprisingly, there’s no suggestion of an app for users of anything pre Windows 8.1.)

The option that will probably be more useful for existing Salesforce.com customers, but which doesn’t have a timeline, is better integration between Salesforce apps and Office 365. That will include being able to access Office documents via Office 365, Office Mobile and Office for iPad from within Salesforce, and being able to use Salesforce from Outlook via a new dedicated app. There are also plans to allow Salesforce data to be plugged into Excel and Power BI for visualisation, and to store Salesforce data in SharePoint Online or OneDrive for Business. Those plans all sound promising, but don’t yet come with a timeline/

Some things won’t happen, however. In particular, Salesforce.com will not become available as an Azure service. Salesforce.com says it will use Azure for some of the back-end development work on its ExactTarget marketing platform, and Microsoft says it will use that tool for some of its own marketing activities, but that’s as far as it goes.

One area where Dynamics CRM will continue to differ crucially from Salesforce.com is that it will be available in both hosted and on-premises versions. While the market for on-premises software is undoubtedly shrinking, there are still sites for whom that’s an important aspect.

Finally, it’s worth remembering that Microsoft quite often partners with companies who are also fighting for some of the same markets. It continues to produce Office for the Mac and has expanded into offering it for the iPad; last year, it partnered with Oracle, a fierce rival in the database space. Being helpful to your customers often requires being friendly with your competitors.