Scott Wingo Business: Salesforce CEO Benioff Slams Microsoft

Salesforce CEO Marc Benioff used a high-profile company event in New York City to engage in one of his favorite activities: swiping at competitors such as Microsoft.

"I think they've lost their relevancy," was how he described Microsoft during a Nov. 30 question-and-answer session, following his company's unveiling of its Social Marketing Cloud. "I just don't think they matter anymore." He was dismissive of the upcoming Windows 8, suggesting that that the "Windows Everywhere" paradigm was terminally outdated.

Microsoft and Salesforce have made a sport of lunging at each other's throats. On the product side, Salesforce.com's browser-based CRM competes with Microsoft Dynamics CRM. On the lawsuit side, the two companies have engaged in tit-for-tat patent battles, the latest of which ended in August 2010 with Salesforce agreeing to pay Microsoft an unspecified amount.

In the wake of that lawsuit, the companies' respective spokespeople took a somewhat conciliatory tone, with Horacio Gutierrez, corporate vice president and deputy general counsel of intellectual property and licensing at Microsoft (not to mention the bête noire of Google Android), describing the endpoint agreement as "an example of how companies can compete vigorously in the marketplace while respecting each other's intellectual property rights."

But that doesn't stop Benioff from doing his best to rip into Microsoft seemingly at every opportunity. There's a method to his madness: Salesforce products like the new Social Marketing Cloud (a suite of cloud-based analytics and engagement tools built atop Radian6 software) fully embrace the idea of browser-based software as an increasingly important business platform, one whose flexibility and scalability eclipses traditional on-premises software (and associated hardware). Meanwhile, Microsoft is powering toward the cloud as fast as it can, with products like Office 365, but its revenues are still largely tethered to traditional software such as Office and Windows, which it continues to heavily promote. Benioff needs to cast his company as the way of the future, and Microsoft as struggling to catch up.

The flip side is that Microsoft has billions of dollars and thousands of very smart people at its disposal. That means the company can do things like burn through hundreds of millions of dollars per quarter on developing online services. It can also afford to play a much longer game, strategy-wise, than many of its competitors. In other words, it's a dangerous opponent.

So Benioff slams them as outdated, and Microsoft's people fire back, and the game continues.

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