Analysts say that the financial impact of the VMware, Salesforce.com partnership is likely to be negligible. Strategically, the VMforce partnership may be more interesting.
Global Equities analyst Trip Chowdhry said the possible combination of Saleforce.com’s recently acquired Jigsaw, Zimbra and CRM may be a formidable rival to Google and Microsoft. It’s possible that Salesforce.com will talk a lot about contextual applications and functions—something Zoho has been pitching too.
Chowdhry noted that Salesforce.com is partnering with VMware’s Zimbra partly as a defensive measure. In March, Google set up its Apps Marketplace where GMail is the key hub to other applications. Microsoft is also set to challenge Salesforce.com with its Azure Cloud, which will tie together CRM, Windows Live, SharePoint and the Office juggernaut. Microsoft (MSFT) brings its Exchange and Outlook installed base to the cloud party.
Indeed, you could argue that Salesforce.com is vulnerable without a big email and collaboration partnership.
Cowen & Co. analyst Peter Goldmacher lays out the Zimbra angle in a research note:
It is our belief that the most likely partnership between the two companies will revolve around Zimbra, the open source, on demand email and collaboration suite VMware bought from Yahoo. We suspect the practical impact will be underwhelming. We highly doubt that Salesforce.com reps are going to put significant effort behind an evangelical sale to displace Microsoft or Gmail when the ability to sell the core CRM product is so much easier and more profitable. Conversely, we doubt VMware reps are going to put much effort into selling an integrated Zimbra/CRM solution when they can barely handle all the incoming calls asking for server virtualization. While Zimbra gives the two companies peripheral overlap, it is not the common interest that significant partnerships are made of. However, if the partnership is around Zimbra, it may surprise some investors that an integrated CRM/web based Office partnership wasn’t struck with Google, long speculated to be a possible acquirer of CRM.
Goldmacher added that it’s possible that the Salesforce.com-VMware partnership will revolve around SpringSource, which allow enterprises to manage the Java application lifecycle. SpringSource on top of Force.com could give Java developers the ability to write applications on top of Force.com without using Apex, Salesforce.com’s development language. A SpringSource-centered deal would allow VMware and Salesforce.com to create a platform as a service play to rival Google (GOOG), Amazon Web Services and Microsoft Azure, said Goldmacher.
Indeed, a SpringSource-centered deal may be necessary. Microsoft’s Azure is primarily targeted at .Net developers, but is building in hooks to bridge Java, PHP and other languages.
In any case, the odds seem to favor that Salesforce.com is looking to VMware to fend off increased competition.