Is Microsoft in denial on social?

June 10, 2012 Richard Boardman

I wonder, when we look back, how significant the last thirty or so days will prove to be in the battle for the enterprise CRM market.

First Oracle bought social engagement company Vitrue for an undisclosed sum, but thought to be in the region of $300 million. Then Salesforce.com bought another social engagement platform company, Buddy Media, for $689 million, its largest acquisition to date. Then, while the ink was barely dried on that deal, Oracle announced the acquisition of social monitoring company Collective Intellect.

The battle-lines are clearly drawn. Salesforce.com wants to expend its presence in the enterprise market, and a key part of its strategy is to provide the tools that companies use to monitor and engage with social networks, as well as collaborate internally. So products like Chatter, Radian6, and now the Buddy Media platform, are key components in its bid for the enterprise market.

Oracle, alongside SAP, has traditionally owned the enterprise space and has no interest in conceding ground to Salesforce. It understands the importance of the social battleground, and isn’t about to let Salesforce dominate, hence the Vitrue and Collective Intellect acquisitions.

Microsoft also has aspirations towards the enterprise CRM market place, but, at the moment at least, has very little in terms of social functionality.  Its Activity Feeds functionality seems to be a fairly tentative response to the success of Salesforce’s Chatter, and while there are hints we will see more social capabilities later in the year, these latest acquisitions will now leave Microsoft a couple of furlongs behind in the social stakes.

The interesting question is how will they respond. The answer to that will depend on how important they feel the social dimensions of CRM to be. And I do wonder if they might be in denial as to the importance of the social dimensions of CRM.

I have no inside track on the thinking in Redmond, so perhaps I’m doing Microsoft a disservice, but if they do take social seriously, they’re going to have to move fast. Their key competitors have put in a surge and if they want to avoid getting irretrievably gapped, they have to start delivering. I don’t think they can do this using internal development alone, so it’s going to interesting to see if Microsoft joins the acquisition feeding frenzy in the coming months.

On the other hand perhaps Microsoft sees the social dimensions of CRM as a passing fad. One they’re not about to pointlessly waste resources on.  That could prove to be a valid perspective, but it could also prove to be a very costly mistake.