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.

No comments: