Anybody that had doubts about Microsoft’s commitment toservice got more proof this week. Only days before its second quarter earningsannouncement, the company announced plans to acquire cloud storage vendorStorSimple and that it closed on a deal to buy marketing automation provider MarketingPilot.Should Salesforce be concerned?
Head in the Clouds
Microsoft is using every opportunity it gets to let us know it is no longer just a software company. Microsoft’s most recent annual report, released earlier this month, included a letter from CEO, Steve Ballmer, reiterating to shareholders that it has evolved into a “devices and services company.” This week the software giant has been busy putting its money where its mouth is.
On Tuesday, October 16, Microsoft announced its intent to purchase StorSimple, which provides an appliance for Windows and VMware that integrates cloud and on-premises storage. Microsoft plans to leverage the technology in its hybrid cloud offerings.
The next day, the company announced the closing of a deal to acquire MarketingPilot, a marketing automation software provider.
Microsoft is always buying something, but the latest round of acquisitions signal a significant shift within the company, which has made its fortune selling software. Windows and Office have long been the main contributors to Microsoft’s profitability and growth. These product families aren’t going away any time soon, but Microsoft realizes consumers and companies are increasingly choosing cloud-based solutions instead of locally deployed software. In addition, more businesses are adopting an IT-as-a-service model, which encourages delivering capabilities as discrete units of service that can be aggregated into more sophisticated offerings. This is driving Microsoft to invest heavily in the cloud and service oriented offering.
The terms of the deals have not been disclosed. Microsoft promises to release more details at the Convergence conference in March.
Microsoft’s acquisition of MarketingPilot is also a part of another major trend -- customer engagement. Although the cloud technology and marketing automation may seem unrelated from a business perspective, they aren't. Businesses want holistic, highly integrated, flexible solutions that “just work.” They want the same thing in their interactions with customers and leads.
Many traditional content management and customer relationship management (CRM) vendors have been adding features that allow business to manage content, marketing campaigns and customer engagement from a single platform. Microsoft may be preparing to follow their lead. The MarketingPilot purchase is being handled through Microsoft’s Dynamics CRM, which could mean customers will soon see marketing automation modules be natively integrated in the platform. There is also an opportunity for marketing automation to come to SharePoint.
Oracle, Microsoft and IBM now own all of the components to create their own Salesforce-like offering. However, none of the companies has put the components together in an easy to use, subscription-based package. If Microsoft decides to move in that direction, they could eventually provide a fair amount of competition to Salesforce in the small and medium business sector because of their will established position in the market.