I usually like patent actions between the IT Top 12 and other signficant industry players not because I care much about patents -- see Mary Jo Foley for a list of the patent areas involved in Microsoft's (MSFT) suit against salesforce.com (CRM) -- or because I care whether patents should apply to enterprise software at all -- see Florian Mueller instead.
I like such suits because the plaintiff has to declare some damages. And in those declarations, IT market researchers like me can often divine some hard numbers that might validate or negate software market growth forecasts. In the Microsoft suit against salesforce.com, the patent stuff will likely sort itself in a few months and the case will be settled for an undisclosed amount that will include a cross-patent agreement (I'm assuming salesforce.com has some). There might even be some kind of cross marketing agreement with a little press conference. In stating this, I am also making the assumption that this dispute is pretty much a lawyer thing between the two companies. High-tech egotists such as Ballmer and Benioff don't try to decide who can put out a fire in a wastebasket at a distance of eight feet over technical stuff like patent law.
But to a market researcher, the question is how does salesforce.com, a company doing a billion-two in software sales, harm Microsoft, a company doing $50-billion-plus in software sales. Note: in both cases, I am not counting the "professional services" components of the respective businesses. That is, I am not including the revenue Microsoft recognizes for training, Microsoft Press, etc. nor the minor revenue in salesforce.com's SEC-reported revenue stream for some similar functions. salesforce.com bills monthly and also bundles some "professional services" revenue in its subscription line -- something it likely won't be able to get away with much longer under new SEC transparency rules bound to come out of financial services regulation changes.
But sadly for me this is really not a case of comparing salesforce.com's billion-two in revenue, mostly for its homongenous ACT-on-steroids sales-contact capabilty, vs. maybe a $100 million in disparate sales and service automation functionality buried somewhere in the $15B Microsoft Business Division. The Microsoft stuff is a mishmash of code first developed inhouse by Microsoft about 10 years ago along with four different code streams inherited from Damagaard, Great Plains, Navision and Solomon.
Instead, although Microsoft claims the harm caused by salesforce.com is "irreparable," it will settle for what it thinks it would have received in royalties if salesforce.com had just paid up in the first place. I'll learn nothing new from this lawsuit, which likely we'll never hear about again.
-- Dennis Byron
(no financial interest in companies mentioned except for the $12 a year I pay Microsoft for Office.)