Microsoft bears shield, as Salesforce and Google synch up

With the Salesforce.com-Google collaboration, Microsoft will face yet another competitor in the online enterprise software applications market, analysts say.

But make that enterprise with a little "e."

Google's online applications will be integrated with Salesforce's customer relationship management (CRM) applications, giving it an entry point into Salesforce's customer base of mainly small to midsize customers and department-level groups of large corporations, said Kevin Buttigieg, an analyst at the Stanford Group.

"It expands the distribution of Google Apps," Buttigieg said, noting that the search giant likely views it as a starting point to later drill into large corporate accounts, in which Microsoft is dominant. "I think it will have a significant impact on Microsoft over time, but how soon and how large is hard to say."

Google Apps has a price advantage, but its feature functionality is lagging behind Microsoft in such areas as the detail of its spreadsheets, analysts say. And Buttigieg notes that Google Apps lacks an offline version. This may factor into large enterprise customers' hesitancy to use it, for fear of losing the ability to operate critical parts of their business, should the servers that host the applications crash.

As part of the agreement, Google Apps, Gmail, Calendar, and Google Talk will be tightly integrated with Salesforce, marking a move by Salesforce to offer a wider package of Web-based applications and cutting ties to desktop versions.