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Microsoft and Salesforce: What new complications await this strange relationship?

by Jason Gumpert

Microsoft's relationship with Salesforce is back in focus now that the companies will begin to compete in the workplace collaboration space. Much of the media and analyst focus in the days since Salesforce announced its plan to acquire Slack has been on the mammoth deal size (almost $28 billion) and on the deal’s  ability to instantly elevate Salesforce to a position of  competitive credibility in an area seemingly dominated by Microsoft.

As long-term rivals in the CRM space, there has never been doubt as to which company is the greater success. Salesforce has maintained a robust market share advantage for more than a decade.  Any time Microsoft grew its CRM revenue or customer base, Salesforce seemed to grow as much or more. While industry analysts have generally rated Microsoft's Dynamics CRM and now Dynamics 365 as a worthy competitor in side-by-side comparisons, success as measured by revenue and market share has eluded Microsoft.

By contrast, Microsoft has executed with precision and strength in the productivity space. The company has adapted its business collaboration and communication strategy over the last few years from a somewhat fragmented story based on Skype for Business and Yammer, to a model now almost totally focused on Teams. The approach has paid off, with the company reporting more than 115 million daily active users in its most recent quarterly earnings call.

So whereas Microsoft's CRM story has been respectable but not remarkable, with over $1 billion in annual revenue (and over $3 billion for the broader Dynamics business) and a few points of overall CRM market share, Teams has become one of the company's standouts, blowing away Slack and all others with its market performance.

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About Jason Gumpert

As the editor of, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at

Prior to co-founding, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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