The strategic tie-up is a huge shot-in-the-arm for the burgeoning SaaS industry. Under the agreement, Salesforce will sell the Google Apps productivity tools as an integrated component of its SaaS customer relationship management software.

The new integrated products made it easier for companies of all sizes to “run their business in the cloud,” Google and Salesforce said.

For Salesforce, the alliance with the internet leader Google is a massive boost. For Google, the tie-up will boost the credibility of its Google Apps among larger business users.

“Google and salesforce.com have always had similar models and philosophies about delivering innovations made possible by the internet,” Google chief executive Eric Schmid said.

“Salesforce.com was a pioneer in Software-as-a-Service and a year ago we joined them in this mission to bring the benefits of cloud computing to businesses of all types. Together, we are making more applications and services available online so customers can focus on building their core business rather than the applications that support it.”

The SaaS-delivered architecture of the Google Apps productivity tools and the Salesforce CRM means customers can effectively communicate and collaborate without any hardware or software to download, install or maintain.

Salesforce.com chairman and chief executive Mark Benioff said the alliance was a powerful push forward for the transformation of the industry to cloud computing. “The end of software is here,” Mr Benioff predicted.

Google’s vice-president and general manager for Enterprise, Dave Girouard said the Google Apps model had “followed a trail blazed by Salesforce” as a cloud computing pioneer.

Mr Girouard was a keynote speaker at the CeBIT Australia 2007 business technology exhibition in Sydney.