Despite their recent alignment in some areas, Microsoft Relevant Products/Services now seems to be aiming square for Salesforce Relevant Products/Services.com’s jawline with its latest CRM Relevant Products/Services software release. Redmond, Washington-based Microsoft is hoping to gain major momentum among U.S. government agencies with its new cloud Relevant Products/Services computing solutions. The well-rounded infrastructure Relevant Products/Services includes Microsoft's Azure cloud computing platform, its Office 365 productivity apps, and now Dynamics CRM for customer Relevant Products/Services, or in this case, constituent relationship management.

In a Thursday blog post, Microsoft's VP for the U.S. Public Sector Curt Kolcun announced updates to Microsoft's cloud offerings, spanning infrastructure, data Relevant Products/Services, productivity, mobility, and more. The crux of the announcement is that Dynamics CRM Online will be joining Office 365 and Azure in servicing U.S. federal, state, and local governments agency.

Essentially, he explained, Dynamics CRM Online for government will be a separate offering for government customers in compliance with FedRAMP and operated by U.S. citizens. The new version will hit the market in early 2015 and allow government customers to leverage existing Microsoft on-premise and cloud investments, including integration with the Azure and Office 365 government community clouds.

Government Cloud Momentum

“The Dynamics CRM Online government cloud will also provide citizens with a central online resource to research information about events and services, find community health centers, apply for permits or licenses, pay bills and fines, or log reports and requests,” Kolcun said.

Kolcun went on to explain that a Microsoft government cloud environment will enable better communication and collaboration, streamline infrastructure and management, offer better access to data insights, and empower governments to better engage with citizens.

If Microsoft’s success with Azure and Office 365 in the public sector is any indication, Redmond could do well out of the gate. The company pointed to the likes of Illinois Department of Corrections (DOC) and partners like Schneider Electric and InfoReliance that are using the Azure preview.

Meanwhile, over 2,200 federal, state and local government customers in the U.S. are using Office 365. In the last 90 days alone, Kolcun said, more than 750 state and local governments and over 60 federal government agencies have purchased seats of Office.

Large cities and counties, from the County of Los Angeles to the County of Mecklenburg, NC, and cities like Chicago, San Jose, and San Francisco have all picked Office 365. And the majority of federal cabinet level agencies have chosen Office 365 for productivity and collaboration needs, including full implementation across agencies such as the U.S. Department of Agriculture and the EPA.

Should Salesforce Be Worried?

We caught up with analyst Brad Shimmin of Current Analysis to get his take on Microsoft’s move to take Dynamics CRM into the government cloud. He told us Redmond’s cloud platform is “extremely well positioned” to play a disruptive role.

“Look at the incredible momentum Microsoft has achieved with its platform-as-a-service, which is in my mind the most direct and dangerous counter to what Salesforce is trying to do with Force.com,” Shimmin said. “This comes as no surprise and definitely is a shot over the bow for Salesforce but also smaller players that have seen good success in the cloud catering to the government.”

As Shimmin sees it, Microsoft is among the tech behemoths that can come into a market and take the Walmart approach, putting the mom and pops out of business Relevant Products/Services. He expects Microsoft to “make hay” with its push to make Dynamics CRM available in the government cloud.

“I’m not sure how pricing will work out -- if Microsoft will be able to come in and undercut Salesforce, which has been famous for driving pricing down [among] cloud services,” Shimmin said. “That’s something we’ll have to wait and see how it shakes out. For now, I think Microsoft is definitely playing to its strengths.”