One of the most interesting trends in B2B marketing right now is the growth of SaaS, or Software as a service. The example that immediately comes to mind is of course Salesforce.com, which has built a customer base of over 1 million users by offering a CRM that runs inside a browser. Being able to access sales data from any computer with an internet connection (and soon any iPhone) is something of a small revolution.
The viability of SaaS apps for small and mid-sized companies get a boost earlier this week when Salesforce.com and Google announced a deal to allow Google Apps (Google’s set of office applications, also run inside a browser) to run inside salesforce.com, and to integrate the two. At first glance, this seems like a match made in heaven: salesforce.com and Google are both challenging Microsoft, and their alliance is clearly meant to put a dent in the dominance of the Redmond giant. Running Google Apps inside of salesforce.com (alongside other powerful applications such as Prospect Insight) is certainly an interesting proposition for current salesforce.com customers: you can create documents, events and spreadsheets that can be attached to prospects in salesforce.com and are always updated for anyone who looks at them. On top of that, you can chat with colleagues and customers from within the CRM, and all this comes for free. It’s a great way for salesforce.com to extend their value proposition, and it allows Google to access a new set of potential customers.
Of course, the deal isn’t nearly as revolutionary as Google and Salesforce would like you to think. The problem rests mainly with Google and its set of online office applications: while they make sharing files and calendars a breeze (I use them every day and wouldn’t be able to do without them), they are also lacking a lot of the functionality that makes Microsoft Office so dominant among businesses. In fact, I’ve been writing this blog on Google Docs, and I can tell you that Google still has a way to go before it can actually challenge Microsoft, especially for any document that is going to be seen by a consumer. Add to that the fact that many businesses already have invested in Microsoft technologies over the years and are reticent to make the jump to Google Docs, however cheaper it may be.
My final point is that SaaS is much easier to adopt when it comes to newer categories of software, such as marketing automation and web analytics. Many more businesses will be willing to look into SaaS as a viable option if they haven’t already invested time and funds in a traditional solution. While the Google-Salesforce deal will certainly pave the way for future expansion of SaaS, Microsoft will still be around for a long time to come.