Microsoft Takes on the Cloud Crowd

(MoneyWatch)  Microsoft continues to grind ahead on its relentless and glacial drive to take over Yahoo, but less noticed in the business press is that it's also making headway on another front: on enterprise software as it moves into the cloud.

In enterprise software, cloud computing has centered on software as a service, programs hosted on a network that users access typically through a browser. It can simplify maintenance of business software programs, but the newness of it can seem daunting to some IT managers.

Salesforce.com was a key pioneer in this area, quickly joined by Oracle and SAP. This week, Microsoft showed how serious it is about software as a service (or, to use the phrase Microsoft prefers, "software plus services") with the launch of Microsoft Dynamics CRM Online, a customer-relationship management software designed as an online service.

Although Microsoft is moving fairly late, it has an advantage in the familiarity of many software users with its Windows, Office and Outlook programs, which may be integrated with its online offerings. CIO magazine quoted Ovum consultant Warren Wilson on this point.

"Although Microsoft doesn't have the track record of either SAP or Oracle in terms of supporting very industry-specific business processes,it has the Windows and Office monopolies which is a huge, huge advantage," Wilson says.

"What better way to do that then let people remain in Outloook and use that interface to access the [CRM or ERP] functionality," Wilson says. "Microsoft knows Outlook better than anyone else and has a tremendous advantage to leverage that."

So Microsoft not only has Yahoo in its sights, it has Salesforce.com. But the Salesforce guys aren't taking that sitting down. Rumor has it they are tossing out their Windows PCs and buying all their workers Apple Macs.