Salesforce Patent Settlement a Win for Microsoft Azure
Microsoft and Salesforce.com have agreed to settle their patent suits against each other. The tale of two clouds can move on to the next chapter now as the two agree to disagree and enter into a license sharing agreement for the competing cloud technologies.
Thu, August 05, 2010
PC World — Microsoft (MSFT) and Salesforce.com have agreed to settle their patent suits against each other. The tale of two clouds can move on to the next chapter now as the two agree to disagree and enter into a license sharing agreement for the competing cloud technologies.
A Microsoft press release states "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."
Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft declared "Microsoft's patent portfolio is the strongest in the software industry and is the result of decades of software innovation. Today's agreement is an example of how companies can compete vigorously in the marketplace while respecting each other's intellectual property rights."
Major players like Google (GOOG), Amazon, and Salesforce exist solely in the cloud and have been a leading force in demonstrating the benefits of Web-based applications and storage, and driving businesses to migrate to the cloud. Microsoft has an advantage, though, with its vision of the cloud.
It is easier to take an established dominance in client-server technologies, messaging, and productivity--software and services that businesses already rely on--and convince customers to migrate to the cloud, than it is to take an established presence in the cloud and build credible tools and services to compete with Microsoft.
It often seems like Microsoft is oblivious to technology trends, and simply lacks the agility to compete in new markets. Over time, though, Microsoft also has a demonstrated ability to come late to the party, crash it, and emerge as a dominant force after the fact. That seems to describe Microsoft's ascent into the cloud.
Microsoft seemed opposed to the cloud trend, fighting for the traditional client-server model it has built its server and desktop operating system empire on. When stubborn denial fails, though--and the cloud goes on despite Microsoft--eventually Microsoft has to recognize that there is a culture shift going on in technology and figure out how to adapt.
Fortunately for Microsoft, it has the intellectual property to create a compelling cloud service, as well as the customer base and corporate credibility to successfully market its Azure services and carve out a significant share of the cloud market. With the recently unveiled Windows Azure Platform appliance, Microsoft also offers a bit of a bridge between the traditional client-server model and the true cloud-based Azure platform.
Now, with the Salesforce patent suits out of the way--including some monetary compensation to line Microsoft's pockets--Microsoft can proceed with doing what it does best: assimilate, adapt, and overcome.