Microsoft, Salesforce Settle, Further Disputes on the Way?

3 minute read
David Roe avatar

Defying all predictions that the bust-up between Microsoft (news, site) and Salesforce.com (news, site) over patents would be the bust up of the year, both have agreed to put their differences aside and have settled out of court.

For those relishing the prospect of some heavy-weight courtroom drama, which seemed almost certain after Salesforce CEO Marc Benioff described Microsoft as "alley thugs" and "patent trolls", the statement that was issued this week will be a little disappointing.

In a release issued by Microsoft, which appears to have gotten the better of the deal, the company said:

The cases have been settled through a patent agreement in which Salesforce.com will receive broad coverage under Microsoft’s patent portfolio for its products and services as well as its back-end server infrastructure during the term. Also as part of the agreement, Microsoft receives coverage under Salesforce.com’s patent portfolio for Microsoft’s products and services."

And that’s it really, apart from the mention that Salesforce is to pay Microsoft an undisclosed sum. For its part, Salesforce’s Jane Hynes simply said in a statement that  "Salesforce.com is pleased to put this litigation behind us".

Two Companies, 14 Patents

But there is more to this than just a row between neighbours.The initial suit was filed by Microsoft in May and claimed that Salesforce had infringed on nine of its patents. The following month, Salesforce responded in kind by filing a suit claiming Microsoft had infringed on five of its patents.

Salesforce hired David Boies, a former Department of Justice lawyer who successfully took on Microsoft over violation of the US antitrust law in the late 1990s and early 2000s.

The patents Microsoft claimed were infringed included those that covered methods for obtaining computer software from a remote server.

Learning Opportunities

Fighting for the Cloud?

The potential implications for cloud computing for both were huge and indicate areas where future disputes could occur between companies either moving their apps to the cloud, or for companies that are already in the cloud.

In this respect both companies in this dispute represent these two different sides – those looking to move to the cloud and those already there. Salesforce exists only in the cloud, while Microsoft is moving slowly there with the Azure platform.

Microsoft also has a huge number of apps that most businesses use, which Microsoft seems set on bringing into the cloud -- the recent release of Office Web Apps being a good example.

In this dispute, the suit and counter-suit had all the hallmarks of territory marking that was probably inevitable once Microsoft finally accepted that it had to go with the cloud crowd.

However, Salesforce and Microsoft are not the only companies with overlapping interests in the cloud and it seems improbable that further disputes over IP and patents can't be avoided.

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