Salesforce CEO Marc Benioff’s War of Words with Microsoft
In mid-July, much of the CRM media focused on Microsoft buzz, thanks to news aplenty released from the worldwide Microsoft partner conference in Boston. Biggest of all the big hype was news about Microsoft Dynamics CRM and SaaS offerings. Just before the convention’s close, however, a lone voice of protest online began drawing attention to some concerns Microsoft partners have with recent announcements regarding Microsoft CRM live services.
From Boston came the official announcement of what some called “the worst-kept secret in the industry”: Microsoft exec Steve Ballmer personally put in an appearance with a keg of Sam Adams beer to state that a new “CRM Live” service would be launched alongside Microsoft Dynamics CRM.
Seemingly waiting for this moment, Benioff instantly went on the attack, in the hopes of spreading his SaaS message. In doing so, Benioff was able to steal at least a little of the giant’s thunder on the day following the announcement. SFGate.com ran a Benioff story under the headline “Salesforce.com blasts Microsoft SaaS plans,” an article mostly devoted to Benioff’s theory on “The Death of Software,” which is based in turn on Bill Gates’ announcement that he was turning his title of Microsoft chief software architect over to Ray Ozzie. Ozzie is the author of a memo of October 2005 entitled “Services Disruption,” which, with a little spin from Benioff, “stress[es] the importance of SaaS and Microsoft’s failure to grasp the change.”
In the SFGate piece, Benioff goes on to say that “The world has changed. Everyone and everything is becoming a service. âÂ?¦ Now, everyone agrees that the future of software is not software at all, but rather an industry âÂ?¦ of heterogeneous services. All companies and executives now agree: no software application will remain standing at the end of this widespread transformation.”
Benioff offered his interoffice memo challenging Microsoft CRM to the press. A few highlights included:
– “Just three weeks ago, Bill Gates announced he would leave his day-to-day responsibilities at Microsoft, and turn his title of Chief Software Architect over to Ray Ozzie. Why did he choose Ozzie, a relative newcomer to Microsoft? Ozzie had made his views widely known in his October 28, 2005 memo called ‘Services Disruption,’ where he stated the future would be dominated not by software like that made by Microsoft, but by services offered by companies like Google and salesforce.com who were changing the software game forever by delivering a new paradigm.
– “Ozzie was right. Steve Ballmer has publicly fretted that he would not be ‘out hustled by anyone,’ but the fact is that Microsoft is being out hustled by everyone.”
– “âÂ?¦other companies are finally delivering a wide variety of software as service offerings from Business Objects to Adobe to Skype. And, Oracle and SAP both have announced they would take the software as service market seriously as well with their own on-demand offerings. And, finally, Microsoft has announced that it will begin hosting its own business software under the Live brand. The world has changed. Everyone and everything is becoming a service.”
– “Now, everyone agrees that the future of software is no software at all – but rather an industry dominated by tens of thousands of heterogeneous services delivering everything from traditional Office productivity to Verticals to VoIP to ERP and CRM systems. All companies and executives now agree: no software application will remain standing at the end of this widespread transformation.”
– “âÂ?¦The Business Web – with all of its innovation, creativity, and most important, customer success – won’t wait for Microsoft.”
Meanwhile, as Benioff’s comments circulated the ‘net, Microsoft Dynamics CRM general manager David Thacher wrote a cheery blog entry from Boston entitled “Thoughts about the ‘Microsoft CRM Live’ Service.” Thacher’s thoughts were recorded after Ballmer’s announcement.
“The dÃ?©jÃ? vu in this,” wrote Thacher, “is that when we started building this product six years ago, our original goal was to build a Microsoft hosted service, not the product you know today!” (This rankled a few industry critics as more than a bit revisionist.) Giving a brief history, Thacher continues with, “But, as other companies have proven, there are also plenty of customers who want their CRM as a service, and today we’re announcing that we’ll provide a Microsoft hosted service with the next release.
“The coolest work we’re doing,” wrote Thacher, “is âÂ?¦ building a single code base that will support on-premises deployments, partner hosted deployments, and the Microsoft Live service. Our goal is to give customers ‘the power of choice,’ allowing them to choose how they want to use the software and change that over time.” Thacher goes on to reaffirm the party line, though, when he says that “I’m sure we’ll see some customers initially choosing ‘quick and easy’ with CRM Live and later moving to an on-premises deployment with deep customization and systems integration.”
Microsoft CRM Live, say the Microsoft CRM brain trust, will give opportunities to mix-and-match, tailor deployment, redeploy, and multi-deploy. Multi-tenancy, promises Microsoft CRM, will be re-enabled. Large-scale service deployment will be emphasized, and the current plan calls for advancing the scalability and reliability achieved in Microsoft CRM version 3.
“For those wondering,” Thacher continued, “the next release is not just about SaaS. We’re also working on plenty of other cool new features, including enhanced Office integration, support for multilingual deployments, more customization options, [and] more management controls” and “âÂ?¦our focus now is the launch later this year of the first pre-releases of the next version and of the CRM Live service.”
Everything sounds great, right? Well�
Benioff, apparently a sharp-eyed blog watchdog, caught a dissenting voice against this entry, immediately “leaping on it” and circulating it to media and industry analysts. Benioff’s new friend in CRM is SPIV Technologies Group sales and marketing vice president Robert E. Spivack.
Spivack had posted a return reply on Thacher’s Microsoft Dynamics CRM Team Blog. In an entry entitled “re: Thoughts about the ‘Microsoft CRM Live’ Service,” Spivack lists concerns and complaints regarding Microsoft that may have found some sympathy among other Microsoft partners.
“I find this entirely revolting,” begins Spivack, writing that “As a Microsoft hosting partner, we constantly are told that ‘Microsoft cares about you and really does want to help hosters,’ yet what do you do? Pre-announce a Microsoft-branded hosted CRM solution that isn’t real, while we still struggle to provide CRM hosting using the kludgy ‘hosted CRM’ update that you guys threw together half-baked?”
Spivack goes on to comment that his firm is “still struggling just to bring up CRM in a test environment, and from reading the Microsoft Dynamics community website posts, MANY people are having trouble getting it installed,” and “The intricate interdependencies âÂ?¦ create an installation nightmare with octopus-like tentacles.” And, “Reporting services,” declares Spivack, “is hell.”
As for the multi-tenancy CRM that’s got Thacher and the Microsoft gang all agog, says Spivack, “Forget multi-tenancy CRM. [T]hat’s the least important CRM feature right now when you can’t even re-use a database server for multiple installs (officially), can’t use non-default instance SQL (without some restricted special fix), can’t share report server[s]…”
Tech news site ZDNet first broke the story of the Benioff/Spivack note and was quite sympathetic to the anti-Microsoft CRM cause. Trends strategist Phil Wainewright’s opinion, recent moves by Microsoft in CRM and SaaS represent “the worst possible approach Microsoft could be taking.” Wainewright had said two days before the Benioff/Spivack story that “Microsoft Dynamics Live CRM doesn’t exist. It’s vaporware.” (This expression would in fact be used by Spivack the following day.) Wainewright believes that Microsoft will perhaps never deliver: “This is a fud announcement of a plan to introduce a product this time next year in the hope that it’ll persuade customers to postpone buying decisions.”
Thus far, Benioff and Wainewright appear to be correct, as nearly six weeks have passed with essentially no new information on the mysterious Microsoft Dynamics Live CRM.” Indeed, Benioff was able to chair a conference call meeting regarding Salesforce.com’s second quarter results for fiscal year 2007 and, when asked to comment on the competition was happy to thusly:
“There is one competitor that I was reading about how they have this new on-demand product. It is a big software company – and I won’t name names here – I was talking to a reporter, and I said, ‘Well, can you tell me what is the URL for their on-demand offering?’ [The reporter] said, ‘Well, you know, this is a big software company and they are in the Pacific Northwest. They are known as leaders in the software industry.’ I said, ‘Yes, but can you give me the URL, because in the on-demand world the difference between the software world and the on-demand world is we have these URLs.’ [The reporter] said, ‘Oh, I guess they don’t have one.’ I said, ‘Well then, they probably don’t have an on-demand product either.'”
Just how soon (or even if) Benioff’s purely SaaS vision of CRM will come to pass is in question. Right now, however, Benioff has the upper hand in public opinion and Microsoft has yet to pick up his gauntlet.
