Salesforce CEO: Microsoft Keeps Pursuing A “Zune Strategy” Against Us

zune tbi CEO Marc Benioff says that Microsoft is taking a “Zune strategy” with its cloud computing offerings like Office 365 and Windows Azure. surprised investors yesterday with a solid first quarter earnings report — revenue came in at $504 million, up 34% from last year and ahead of consensus analyst estimates of $482 million, and the company upped its annual revenue estimate to more than $2 billion for the first time.

Investors have sent the stock up almost 9% this morning in the wake of the good news.

Benioff has never been shy about criticising Microsoft, but yesterday’s remarks were particularly cutting:

Microsoft’s desperate strategy of underfunding, pricing with undifferentiated and highly proprietary products basically has had the same impact on our business as the Windows tablet and Zune did against the iPad and iPod. We call Microsoft’s strategy, “the Zune strategy”.

It’s the concept that they can take a proprietary, undifferentiated offering at a lower price and somehow make an impact on a high-value, highly differentiated product that’s loved by customers. Microsoft has not changed our exceptional win rates or affected our average selling price with this Zune strategy.

Customers continue to want visionary products that give them a competitive advantage, not the me-too Zune-type products locking them into these old, proprietary, desktop-driven platforms that are dying off.

He is now calling Microsoft’s CRM product “Zune CRM,” and notes that had some takeaways from former CRM customers like Angie’s List.