Microsoft and Salesforce were once foes but are close buddies now, as evidenced by the series of partnership deals they've announced over the last couple of years.
Their friendlier relationship was perhaps most apparent at yesterday's Dreamforce conference, where Microsoft CEO Satya Nadella gave a 90-minute keynote speech — the first time that any Microsoft CEO has done so.
But it looks like their friendship isn't all sunshine and roses, according to at least one industry analyst. On Thursday, Wedbush Securities wrote in a note:
"We’ve heard chatter that Microsoft isn’t being overly cooperative with CRM [Salesforce] in their joint effort to better integrate their products. We hypothesize that an aborted M&A discussion between the two companies (per media reports) may have something to do with this state of affairs."
In April, Microsoft was reported to be engaged in talks to acquire Salesforce, a deal that fell through after Salesforce reportedly asked for a higher price nearing $70 billion. The two companies have still kept a good relationship, striking a number of different partnership deals, including yesterday's deal that integrated Microsoft's Skype, OneNote, and Delve closer to Salesforce's platform.
It's unclear what exactly Wedbush has been hearing, or how the partnership is being affected, if at all. Wedbush declined to further elaborate when we reached out for clarification. Salesforce and Microsoft were not immediately available for comment.
But it may be worth noting that Microsoft has a product that directly competes with Salesforce in the cloud CRM software space called Microsoft Dynamics. It still lags behind in market share compared to Salesforce, who leads all CRM vendors with roughly an 18% share. But there has been some reports indicating Dynamics is quickly catching up in the space, especially as it's been “experiencing renewed investment and focus within Microsoft,” according to Gartner.
In any case, Wedbush added that a less enthusiastic Microsoft won't have any big impact on Salesforce's business, which has been beating revenue forecasts and hitting all time high share prices lately. "In any event, we don’t think these developments have much bearing on CRM’s near-term outlook," it wrote.
