Salesforce's Benioff Takes On Microsoft's 'Evil Empire' In Cloud CRM War

Salesforce CEO and Chairman Marc Benioff on Wednesday kept the tent revival feel of Dreamforce 2010 rolling with an on-stage cloud CRM customer conversion.

While the converted may not have been an actual Microsoft customer, Benioff convinced the highly visible subject of a Microsoft Dynamics CRM Online customer advertisement -- or a solid doppelganger for the man in the ads -- to pledge his allegiance to Salesforce's cloud CRM.

Calling Microsoft the "evil empire," Benioff said the Redmond, Wash.-based software giant wanted to rain on the DreamForce parade as the pair of powerhouses continues to butt heads in the cloud CRM space.

"Not everyone wants us to have this fun. There are forces out there trying to stop us … They don't want us dancing to Stevie Wonder. They don't want us dancing to will.i.am," Benioff said during his Wednesday morning keynote, referencing the two marquee performers from the Dreamforce party the night before.

There's a legacy software industry, Benioff said, that wants to put a stop to Salesforce forging its way into cloud computing and the cloud CRM space. And that incumbent is pulling out all of the stops at DreamForce in San Francisco this year.

"There's an old industry … and they're trying to do everything they can to stop this," Benioff said.

The Salesforce chief executive pointed to a new Microsoft Dynamics CRM Online ad campaign featuring the slogan "I Didn't Get Forced. I got cloud-based CRM that works the way I do." The ads, which disparage Salesforce with the tagline "Don't Get Forced, Get What Fits," feature the image of a Microsoft customer with crossed arms and a look of consternation on his face. That customer is said to have left Salesforce in favor of Microsoft Dynamics CRM Online. Microsoft also deployed a fleet of Segway vehicles at DreamForce and around the Moscone Center featuring the ad.

And on the eve of DreamForce, Microsoft also launched a "Cloud CRM for Less" offer for Salesforce and Oracle customers through which Microsoft will rebate eligible customers up to $200 for each user that makes the move to Microsoft Dynamics CRM Online between now and June 30, 2011.

According to an open letter from Michael Park, corporate vice president for sales, marketing and operations at Microsoft Business Solutions, the Cloud CRM for Less launch was timed specifically to get the roughly 30,000 Dreamforce registrants thinking about jumping ship from Salesforce CRM. Microsoft in September also released Microsoft Dynamics CRM 2011 into beta, which creates parity between its cloud and on-premise-based versions of the application.

"In making the switch from other solutions, such as Salesforce.com, you will join thousands of companies that have found that Microsoft Dynamics CRM Online is easier to use, adds value to the technology investments they’ve already made and delivers greater business insight," Park wrote in the letter, which highlights two customers that saw dramatic savings switching from Salesforce to Microsoft for cloud CRM.

NEXT: The Cloud CRM Battle Didn't Start Here

It's not the first time Microsoft has used DreamForce to try and woo away Salesforce customers. Just before Dreamforce 2009, Microsoft launched a six-month free trial offer for Dynamics CRM Online for customers who switched from Salesforce or Oracle.

"They do not want us going to the cloud. They're trying to stop Chatter. They're trying to stop the Sales Cloud," Benioff said, adding that Microsoft is screaming "Stop that cloud, I tell you" in a last ditch effort to keep customers using its various software products.

And it isn't just Segways, magazine ads and rebates that Microsoft is dangling in front of Salesforce customers. The software behemoth has also tried to stop Salesforce through litigation, Benioff said.

In May, Microsoft filed a patent infringement lawsuit against Salesforce in the U.S. District Court for the Western District of Washington charging that Salesforce's on-demand CRM application infringed on nine Microsoft patents.

Roughly a month later, Salesforce fired back with a countersuit in the U.S. District Court of Delaware charging that Microsoft products like SharePoint and the .Net platform violate Salesforce patents.

Salesforce and Microsoft settled the dueling patent infringement lawsuits in August. The settlement grants each company coverage under the other's patent portfolio for products and services.

But as a coup de grace in the cloud CRM kerfuffle with Microsoft, Benioff on Wednesday brought "Bernard" to the Dreamforce stage; Bernard is the man featured in the Microsoft "I Didn't Get Forced" ad campaign (or an impressive look-alike). Bernard, who in the ad portrays a customer that left Salesforce in favor of Microsoft Dynamics CRM Online, came to the stage with the same aggravated, arms crossed pose he struck in the Microsoft ads. Benioff apologized to Bernard for Salesforce letting him down. The CEO said he was sorry that Salesforce caused him to leave in favor of its cloud CRM rival.

"We don't want you to go back to software," Benioff implored of Bernard. "We were there too. We know what it's like. The constant updates and upgrades … We don't want you to go back to the evil empire."

After a short bit of prodding, Bernard lamented, saying he would stick with Salesforce for cloud CRM. The pair high-fived before Barnard left the stage.

"When you're fighting with Microsoft, you've got to do everything you can," Benioff said.