Important Industry Announcements, and What We Think of Them

May 9th, 2008 by Matt

Usually, we cover four to six industry announcements in this space. However, sometimes there’s an announcement of such importance that it warrants more detailed attention. The last time we sequestered the entire article for a single announcement was when Oracle purchased Siebel Systems. This time the situation is a little different.

The recent codevelopment agreement between salesforce.com and Google is getting so much attention that we feel obligated to put it into perspective. Here are the specifics.

In mid-April, salesforce.com and Google put some meat behind last year’s announcement of a strategic alliance by introducing “salesforce.com for Google Apps,” a combination of business productivity applications (email, calendaring, documents, spreadsheets, presentations, instant messaging) and CRM (sales, marketing, service and support, partners). Here are the specific application combinations mentioned in the announcement:

  • salesforce.com and Gmail – Sends, receives and stores email communication, keeping a record of customer interactions.
  • salesforce.com and Google Docs – Creates, manages, and shares online documents, spreadsheets, and presentations within a sales organization, marketing group, or support team.
  • salesforce.com and Google Talk – Communicates with colleagues or customers from salesforce.com and optionally attaches Google Talk conversations to customer or prospect records stored in salesforce.com.
  • salesforce.com and Google Calendar – Exposes sales tasks and marketing campaigns from salesforce.com on Google Calendar.

There are numerous advantages to salesforce.com and Google from this strategic alliance. First, salesforce.com for Google Apps leverages the Force.com Platform and Google’s open APIs, creating more development opportunities for developers and partners. More importantly, it better aligns the product sets from the two high tech firms that share the same major competition: Microsoft. The combination of salesforce.com and Google Apps is clearly intended to be a counterweight against the formidable combination of Microsoft Office and Microsoft Dynamics CRM.

What the salesforce.com/Google combination offers to sales professional is less clear. While salesforce.com has proven itself as a workmanlike, practical CRM solution, Google Apps doesn’t seem to bring all that much to the table. While both companies tout “cloud computing” (offering applications as a service), the idea of using applications across the Web is of limited attractiveness in the realm of personal productivity applications.

First, personal productivity apps are, well, personal, which means that there’s no reason to be running them over the Web. In fact, running them over the Web is probably a disadvantage, because sometimes the Web goes down or (when wireless) can’t get a good connection. The ability to get work done even if you’re not currently on the Web remains a value feature in personal productivity apps.

Second, personal productivity apps are, once again, personal. Because such applications become part of your daily work routine, once you’ve learned to use a suite of software products, you tend to stick with it. The truth is that there’s not going to be a mass exodus to a replacement product for Microsoft Office. Even when functionally equivalent products have been released, for free, they’ve not managed to get any traction in the market. Better or worse, the world has “settled” on Microsoft Office and that’s not going to change.

What, then, are we to make of this alliance? The idea, according to the press release, is to “enable an entirely new way for business professionals to communicate, collaborate, and work together in real time over the Web.” I think it’s fair to say that it will be successful at doing that. And there will be a few companies – probably firms that hate Microsoft for their own reasons – that will standardize on this combination.

But for the rest of the business world, this product combination is likely to play little or no role in their future computing strategy.

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