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Salesforce CEO knocks Microsoft's hosted CRM bluster

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Salesforce.com's chief executive is talking tough after Microsoft CEO Steve Ballmer pledged to give its smaller rival a "run for its money" with a planned hosted CRM service.

Marc Benioff is confident his company can see-off Microsoft's hosted customer relationship management (CRM) service, based on the companies' competitive past.

Benioff said in a statement: "We have competed against [Microsoft] in the CRM market since 2002 and they have failed to deliver a competitive product. They just cancelled version two of that legacy application and skipped ahead to three. In the meantime, we are on the 18th generation of our service. Customers are tired of waiting for Microsoft to innovate."

Benioff spoke after Ballmer promised a set of hosted services from Microsoft that includes CRM for the mid-market.

"People want hosted CRM," Ballmer told Microsoft's Business Summit in Redmond, Washington. "We will respond to and address that need. We expect to give Salesforce.com a very effective run for its money by having on-premise and hosted solutions over time."

The service is expected to be part of the newly branded Dynamics family. Dynamics consists of the existing Axapta, Navision, Great Plains and Solomon products that Microsoft is attempting to unify on a single code base under Project Green.

The fact that Project Green is running late has apparently not deterred Ballmer from committing the roadmap to a substantial shift in direction. Once expected in 2004, Project Green is now planned in two waves with the first due this year and through to 2007 bringing a common interface to the Dynamics family. The second wave, starting in 2008, will attempt to see the Dynamics family use the .NET architecture and Visual Studio development tools.

Ballmer's pronouncement fits with his strategy of, if Microsoft cannot be first to market, then it must be cool or, even, super cool and beat the competition.

Last year, Project Green was targeted at large customers with between 1,000 and 5,000 PCs. Ballmer on Wednesday, though, was addressing his comments to an audience who are firmly in the mid-market customers, which Microsoft defines as those running 25 to 500 PCs.

The decision to lurch into hosted, mid-market CRM comes after Salseforce.com has cleaned up with 300,000 subscribers in small, mid and departmental level companies. The company is also, now, moving into the enterprise, having signed a 5,000-seat deal with Wall St giant Merrill Lynch, during the last quarter.

The timing of Ballmer's announcement is also slightly suspicious. Ballmer gave no indication of a delivery date, and the Project Green roadmap has, at least as late as July - when Microsoft again explained its roadmap for companies at the company's Worldwide Partner Conference - made no reference to a hosted service.

However, Salesforce.com will next week host its annual Dreamforce customer conference in San Francisco, California, where it is expected to make new service and customer announcements.®

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