Friday, June 09, 2006

Is Google entering Salesforce’s backyard?

Some products, like Google Sets, graduating from Google Labs may seem the esoteric. However, all these products fit a larger offering Google is building – a highly flexible set of application components with can be easily integrated into an application of your choice.

Applications or components include email, online calendars, spreadsheets, online document processing etc. But when combined together – these provide a significant productivity boost for customers. For instance, when I get a tracking number from an order I placed, Gmail automatically detects the string as a UPS tracking number and provides a link to check the status of the package. It is also able to detect a meeting request or an address and show me the appropriate links (like “Add to Calendar” or “View map”).
Gmail conversation threading and labels provide the ability to track chains of conversations. Also, Google Analytics provides a fantastic system to view Web leads and look at your sales-funnel, and you could get the features of a basic CRM for free with Google products. Granted that most of the products are still in Beta, but Salesforce has had some outages as well. One missing pieceGoogle Proxy authentication, which seems imminent, when available will make software development over Google Services easier and undermine some of Salesforce’s value proposition to ISVs.

Meanwhile, Salesforce has probably anticipated and is reacting to this strategic threat with AppExchange. Just as fries or soda are always easier to sell with the burger... by providing a platform with rich services, the AppExchange platform is helping ISV’s by reducing the friction in the sales and product development process, and increasing value of both the Salesforce platform and the ISV’s product to customers by providing a seamless interface. Of course, the markets segments each company is targeting currently are very different, with Google targeting individual and small business e-commerce companies, and Salesforce targeting the SMB and the enterprise marketplace. But with the projected high growth rates of both companies and not-so-high growth rates of the CRM market - competition is inevitable.

Passport 2.0?

One of the challenges facing Web 2.0 companies today is the friction due to required signups. You typically provide an email address and a password to create an account, and you get a confirmation email with an activation code. As a visitor to the website, this causes a significant amount of friction, and I looked into how we can eliminate this while ensuring that the website is able to provide features that will not be misused (for email or link spam)

Why do websites require accounts?

To prevent misuse – Visitors without accounts can use the “email this article” feature to spam others. Alternatively, comment spam could be used to boost Pagerank.

2. To keep track of visitors and their information – Websites could also do this with cookies, but users have the ability to delete them.

3. To notify users of “Exciting new features” – This is a proven method of increasing web traffic.

4. To protect private information a user may have entered or other transactional information.

All these, or most of these functions can be accomplished by having one company manage ID’s for multiple websites. Like the Google Account or Microsoft Passport earlier, a OneID would make it easier for web users to get access to a lot of features on a website without the webmaster having to worry about the potential misuse by anonymous users.

Symantec is reported to be exploring this opportunity, and Google may be coming up with an Account authentication proxy. Several blogs, including ZDNet, point to this imminent launch.

The feature will be particularly useful for Google because they can look at what other sites a user visits, and will be able to better train their search algorithms to display to the user what they were looking for without having to visit 10 websites to get this information.

Is this the case of Google copying Microsoft?