Just last week, I wrote about a flock of financial analysts downgrading their ratings on software-as-a-service darling Salesforce.com, citing concerns about sales slowdowns among both traditional on-premise software vendors and Salesforce's SaaS peers.
The authors of this Technology Evaluation Centers piece, who are so bullish on Salesforce that I wonder if they aren't in some way connected to the company, apparently wrote it before the analysts turned in their negative appraisals, which sent Salesforce stock on a downward slide. Still, although the article seems suspiciously skewed in Salesforce's favor, it does offer one a nice rundown of Salesforce's different products, including its activities in the platform-as-a-service (PaaS) space. (You'll have to register to read the article. While it's free, this site required me to enter my user name/password info several times during a single reading. Annoying.)
While the title of the article implies it contains a broad discussion of the competitive landscape of the on-demand CRM market, it focuses almost exclusively on Salesforce vs. Microsoft Dynamics, with a discussion of the strengths and weaknesses of each. Though it only officially launched in April, Dynamics presents one of the most formidable challengers yet to Salesforce's dominance of this market, according to the article's authors.
Working in Dynamics' favor, according to the article:
- It's priced at least 30 percent less than equivalent offerings from Salesforce (and comparisons offered in the article make it clear that Salesforce charges a premium over not just Dynamics but other alternatives such as Oracle Siebel CRM OnDemand and Sugar CRM Professional On-Demand).
- Customers will welcome a legitimate alternative to Salesforce.
- Dynamics integrates with all of the usual Microsoft suspects, including Office, Content Management Server, Mobile and MapPoint.
- Microsoft is working on a process-oriented, end-to-end CRM approach involving Sharepoint Server, BizTalk, Exchange and other Microsoft technologies that will emphasize not only internal collaboration but collaboration with customers.
Working against Dynamics:
- As a company strongly oriented toward products, Microsoft will have a tough time adopting the kind of services mentality necessary to make SaaS work.
- Because Microsoft partners will sell the product, Microsoft won't have the kind of direct connection with its customers that has helped make Salesforce a success.
- Microsoft can't match the Salesforce interface for ease of use.
- Because it doesn't have to worry about building market share, Salesforce can focus on offering new functionality and vertical solutions.
- Microsoft doesn't yet have a directory of third-party, on-demand applications equivalent to Salesforce's AppExchange.
ZDNet blogger Joshua Greenbaum hits on another possible disadvantage for Dynamics in his post about the fluidity of Microsoft's strategy for the product. Though it was once aimed at the upper end of the enterprise software market, Microsoft has now apparently decided to target SMBs instead, largely due to its reluctance to adopt a direct-sales model for Dynamics. (Interestingly, as IT Business Edge blogger Kachina Dunn wrote earlier this year, Microsoft's sales partners are worried their revenues will suffer under a SaaS model.)
It's a smart move for Microsoft, though, concludes Greenbaum. There is lots of revenue up for grabs in the mid-market, and its army of resellers should give Microsoft a big boost there. (Unlike the authors of the TEC article, Greenbaum sees Microsoft sales partners as a definite strength.)