Google, Salesforce To Jointly Deliver Online Business Software

To counter Microsoft's foray into the small- and mid-sized business applications market, Google and software-as-a-service provider Salesforce.com said Monday that they have teamed up to offer a range of hosted business applications under the Google Apps brand.

Salesforce for Google Apps combines existing Google Apps tools for e-mail, word processing and spreadsheet creation with Salesforce's customer relationship management software to create a complete business applications suite that's delivered over the Web.

"Google and Salesforce have always had similar models and philosophies about delivering innovations made possible by the Internet," said Google CEO Eric Schmidt, in a statement.

Salesforce for Google Apps integrates Salesforce's CRM applications with Google's Gmail e-mail service, Google Docs word processing, spreadsheet and presentation tools, Google Talk voice and IM service and Google Calendar scheduling software.

Salesforce for Google Apps is available immediately for existing Salesforce users at no additional charge, the companies said. An enhanced package featuring telephone support and additional third party applications will be released in the summer at a price of $10 per user, per month.

Salesforce CEO Marc Benioff said in a statement that the combination would appeal to "the millions of businesses looking to manage their entire office in the cloud."

Benioff was referring to so-called 'cloud computing', an emerging computing model under which end users tap applications not from their PC hard drives but from remote servers via the Internet. The concept is a Web 2.0 take on an older computing paradigm that saw users access mainframe applications through dumb terminals.

Cloud computing advocates argue that the approach is less expensive and more efficient than the traditional client-server model for business computing.

Benioff, a former Oracle executive, has long argued that it makes about as much sense for businesses to run in-house servers and applications as it does for them to operate their own electrical plants and sewage systems. "The end of software is here," Benioff said.

The company's are billing Salesforce for Google Apps as "the world's largest cloud computing platform for building and running applications."

As such, the service could pose a formidable challenge to Microsoft's efforts to establish itself in the SMB applications market, which remains widely fragmented. Microsoft's main entrant in the market is its Dynamics line of CRM and productivity software.

Microsoft recently introduced Dynamics CRM Online in order to deliver a SaaS version of the product.

Oracle also provides Web-based CRM software through its Siebel CRM On Demand offering and is targeting SMBs through a program called Accelerate that features a range of fixed-price business software for smaller companies.