Google and Salesforce.com: Microsoft's Waterloo?

It was that invasion of Russia, followed by the famous double whammy in Belgium from Wellington's Brits and the Prussians (along with a bunch of other enemies), that finally sank the little emperor, who at least lent his name to a yummy French dessert and a spectacular cognac your editor purchased at a wine festival in Paris some years back. (Oh, and he wrote France's civil code, still the basis of French law today -- but we're more concerned with gastronomy here at RCPU.)

Well, we don't want to compare Microsoft to a brutal tyrant (really, we don't), but we see some similarities between Napoleon's downfall and the situation Microsoft is facing now with its Internet strategy (further explained, sort of, here). The parallels are hardly air-tight, but they're good enough for the Internet -- and if we could write about Lee Majors last week, you can surely allow us Napoleon this week. Right?

Let's keep this simple. Microsoft's $6 billion acquisition of aQuantive could -- just could -- turn out to be a little bit like Napoleon's ill-fated adventure in Russia. It's expensive and risky. It definitely represents a voyage into possibly hostile -- and still not terribly familiar -- territory of online advertising. At least, that's the way it is for Redmond. So there's that parallel drawn, however quickly.

And then there's this: Cooperation on the horizon between Google and Salesforce.com. Google is now freshly minted as a productivity-applications player and potential competitor to Microsoft, with Web-based applications that step into Microsoft Office's back yard. Salesforce.com is the company that's making waves in the market for customer relationship management applications with its pure Internet, software-as-a-service play. Some analysts are even talking merger here, which has us wondering if maybe, just maybe, we hear Wellington's men meeting up with the Prussians at Waterloo with their flexible, Web-based, inexpensive applications to deal the final blow to Microsoft's Windows-reliant, Office-dedicated, somewhat old-school Napoleon.

OK, probably not. At least not right now. The fact is that many IT folks quite like having control of their data, thank you very much, and aren't ready to ship it out completely to some vendor's server farms. Plus, there's a lot -- billions of dollars -- of investment in Microsoft sitting in corporate IT shops right now, and that's not going to go away any time soon.

Still, Microsoft doesn't seem entirely sure of its own strategy -- or that which it believes its partners should follow -- regarding Internet-based services, as demonstrated by the fact that Redmond has stuck the "Live" name on so many products that the moniker now seems largely meaningless and certainly doesn't evoke confidence or clarity. (By contrast, we know exactly what both Google and Salesforce.com offer in terms of Web services, and their messaging is crystal clear.)

Big, corporate America probably isn't ready to go all-Web, all the time. However, smaller businesses (where a lot of new revenues come from these days) will surely at least consider moving in that direction. Moves toward Web-based apps could get hastened even as Microsoft's core offerings -- Office and Windows, mainly -- move in exactly the wrong direction by getting fatter and more expensive.

The question now is whether Microsoft, big battleship that it has become, can execute well enough to catch Google on the sacred ground of online advertising and still hold off the charge of Google and Salesforce.com in Redmond's own apps back yard. Frankly, we're not sure that any company can do that, emperor or not. And while we're not sure that the battle is upon Redmond right now, we can hear the troops amassing in the distance. Where once the software industry's Napoleon put pressure on others, it now has to gear up to defend itself.

What impact do you think cooperation between Google and Salesforce.com would have on Microsoft? As a partner, what's your take on Microsoft's SaaS (or S+S) strategy? Talk to me at [email protected].

Posted by Lee Pender on May 24, 2007