Salesforce has integrated Google's online productivity applications with its on-demand CRM offerings.

The deal strengthen an existing partnership between the companies, marked in part by their pact to plug Google's AdWords service into Salesforce.

The companies have "always had similar models and philosophies," said Google CEO Eric Schmidt.

Salesforce CEO Marc Benioff said: "The combination of our leading CRM applications and Google's business productivity applications pushes forward the transformation of the industry to cloud computing. The end of software is here."

One industry observer said the deal has clear benefits for both companies.

"The corporate standard [for productivity applications and e-mail] is, of course, Microsoft, but if you look at [Silicon] Valley and the startups, they are using Google Apps because of the collaborative aspects," said Ray Wang, an analyst with Forrester Research. "There are a lot of startups using Salesforce.com, especially here in the Valley."

For Google, the move could provide a stronger foothold among business users, Wang said. "Google is already quite pervasive, but they want to be more pervasive in the enterprise."

The Google Apps integration will enable Salesforce users to work in concert with Gmail, Google Docs, Google Talk and Google Calendar. A demo provided by a Salesforce spokesman showed how users could perform various tasks, such as pushing Gmail messages sent regarding a particular customer into the appropriate place in Salesforce.

Salesforce customers hailed the integration, terming it an ideal fit for their business needs.

Mike Epner heads the services team at CollabNet, maker of a Web-based platform for distributed software development teams.

"My team works closely with sales so the chat, e-mail and calendaring are all intriguing. If you were to manage the consulting team calendars via Salesforce, for example, we could set up a synchronization with their personal Google calendars (which many of them use)," he wrote in an e-mail message. "That could be quite interesting and also give visibility to the sales team on when customers are scheduled."

In addition, CollabNet's technical support team uses Salesforce to manage its caseload. "The collaboration and e-mail/chat/phone log with sales, support, consultants, engineering, and customers in a single case record has interesting potential," he wrote. "We can take a lot of hassle out of the system and let sales and tech support use Salesforce as their main 'portal' for day-to-day activities."

Benefits like those are just the beginning, according to Salesforce. The combination of its Force.com hosted development platform and Google's open APIs present a powerful new entry in cloud programming, the company said.

"It's an application story, of Salesforce becoming intertwined with Google Apps," said Kraig Swensrud, vice president of applications at Salesforce. The situation presents "a huge opportunity" for third-party developers and independent software vendors, he added.

An eager user base awaits such hybrid programs, according to Swensrud. "We think there will be significant, significant appeal," Swensrud said. "Users want a model with less cost and complexity."

However, the debut product is not entirely seamless. For example, it does not include single sign-on to both Google Apps and Salesforce out of the box, Swensrud said. That task has been completed by a partner, Sxip, which is announcing an application Monday. Another partner, Appirio, created the calendaring integration, according to Salesforce.

Salesforce for Google Apps is now available as a free option for Salesforce customers. The company will roll out a version in a few months that bundles features such as telephone support, unified billing and provisioning, and enhanced platform APIs for US$10 (£5) per user per month.