Even before their tit-for-tat patent lawsuits, Microsoft and Salesforce.com were already on a collision course. On one side, a scrappy player looking to take on established names in deployed enterprise software with its promise of delivering CRM and other applications cheaply and effectively via the cloud. On the other, a massive force in software, looking to come to grips with IT’s growing fascination with software-as-a-service and all things cloud-based.
It was little surprise, then, that the two bitter competitors found themselves squaring off in a fight that led to the courts, with each accusing the other of infringing on patents they owned.
But this week, Microsoft suddenly announced that it and Salesforce had reached a settlement and cross-licensing deal. Who came out on top, and what, if anything do the results mean for where enterprise software is heading? eCRM Guide takes a look.
Microsoft and Salesforce.com (NYSE: CRM) settled their competing patent infringement lawsuits out of court on Wednesday, and while little is known about the deal itself, industry observers see the agreement as more about Microsoft notching a victory in safeguarding its intellectual property, and less about the software behemoth quashing a fast-moving rival.
In the deal, Salesforce paid Microsoft an undisclosed sum and the two bitter rivals agreed to cross-license some of each others’ patents, according to a Microsoft (NASDAQ: MSFT) statement. Furthermore, the statement refers to a contract “term” — indicating that the deal is not perpetual and may need to be renegotiated at some future point.