Salesforce has reached a $2.5 billion cloud computing deal with Alphabet to jointly compete for Microsoft's enterprise customers

Aiming at Microsoft, Google and Salesforce collaborate in multiple ways to jointly layout the AI market.

On February 24th, Eastern Time, Bloomberg reported that enterprise software giant Salesforce has signed a significant cloud computing cooperation agreement with technology giant Google's parent company Alphabet. Behind this deal is the desire of both parties to work together to attract more enterprise customers, especially those currently using Microsoft products.

According to the agreement, Salesforce's customers can choose to run their customer management software, Agentforce autonomous AI assistant, and data cloud products on Google Cloud. Salesforce previously relied mainly on Amazon's cloud services, but over the next seven years, the company has committed to investing at least $2.5 billion in Google's cloud computing services.

After the news was announced, Salesforce fell over 2% during trading but rebounded to rise over 0.4%, while Google A, which was nearly flat, rose over 0.7%.

Google partners with Salesforce to counter Microsoft

The significance of this cooperation agreement goes beyond just switching cloud computing platforms. Google and Salesforce will also collaborate to develop a series of AI-enhanced products to provide more powerful tools for enterprise customers.

For example, Google Cloud CEO Thomas Kurian stated that the two companies already have many common customers who have been pushing for deeper product integration. Enterprise users will be able to use Google Workspace to write sales proposals, extract details from Salesforce's customer data, and fine-tune proposals using Google's Gemini AI model.

Kurian pointed out that Salesforce can choose to host its products on any cloud platform, but they chose Google Cloud because they value the quality of Google's technology and the growth potential of its customer base.

As a global leader in customer relationship management software, Salesforce's AI strategy has shifted towards developing AI agents aimed at automating tasks such as customer support and sales development. The high demand for generative AI typically requires more powerful cloud computing capabilities, which Google Cloud can provide.

It is worth noting that Salesforce also plans to allow its Agentforce customers to use Google's Gemini model, a move that will encourage many clients, including Wayfair and Accenture, to migrate their Salesforce applications to Google Cloud.

This collaboration also reflects how large technology companies are providing a broader range of AI-enhanced products and services through alliances and partnerships. Although Microsoft is leading in enterprise generative AI and many Fortune 500 companies are already using Microsoft's AI productivity tools, the actual adoption may not meet expectations, giving Google and Salesforce a joint opportunity to challenge Salesforce CEO Marc Benioff has repeatedly criticized Microsoft's AI efforts, including its Copilot AI assistant, which he believes is inferior to Salesforce's AI agents. Benioff posted on social media platform X last October, stating, "It's disappointing to see how Copilot is delivered to customers." In response, Microsoft's PR chief Frank Shaw countered that Benioff's strategy is "all marketing, lacking authenticity and substance."

As Salesforce reports its earnings this Wednesday, investors will closely watch for signs of sales growth driven by new AI tools. Benioff has revealed that Salesforce will sign "thousands" of Agentforce deals in this fiscal quarter