Five years from now, Google — rather than Microsoft — will dominate the software as a service (SaaS) market, according to 48 percent of managed service providers who participated in MSPmentor’s reader poll for the week ended January 30, 2009. Here’s a closer look at the poll stats — and a surprising snub involving Oracle.
MSPmentor asked its readers “Five years from now, who will dominate SaaS?” Exactly 100 readers participated in the poll, and responded as follows:
- Google, 48%
- Microsoft, 28%
- Oracle, 0%
- None of the above, 20%
- All of the above, 4%
We realize the poll isn’t scientific and Google fans may have stuffed the ballot box. Plus, Google could be front-of-mind with readers because the company just launched its Google Apps Reseller program — though Google continues to hit some bumps with its SaaS strategy.
Paging Larry Ellison
Meanwhile, are readers underestimating Larry Ellison and Oracle? Lots of small SaaS companies (many of them listed on our SaaS 20 Stock Index) are prime targets for Oracle’s acquisition dollars.
But so far, Oracle (and SAP and Lawson Software) have mostly downplayed the SaaS opportunity to customers, partners and investors, notes Jeff Kaplan at THINKstrategies. I bet that will change within two years.
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Posted In: Software as a Service and Hardware as a Service
Tags: Google SaaS | Google Software as a Service | Microsoft Azure | Microsoft SaaS | Microsoft Software as a Service | Oracle SaaS | Oracle Software as a Service
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Yikes, I did not see the poll, I would have thrown mine in for Microsoft or Non of the Above. Google may be a SaaS innovator, but they are an advertising company. They still have not found a way to make real money by delivering SaaS technology to businesses.
Lane: We’ll give you credit for the vote and lift MSFT up to 29%. It wasn’t a scientific survey but it’s always interesting to take the pulse of our readership. I think a lot of people overlook MSFT’s early momentum with partners that are hosting SharePoint, Exchange and CRM Dynamics.
I wonder if those three hosted businesses, combined into one, are bigger than Salesforce.com…
If Lane can get a late vote in for Microsoft, put my late vote in for Google. MS hasn’t shown they have a way to make money on SaaS either, and given their late entry to the market, their vested interest in the status quo of traditional desktop OSes and apps, and their lack of success in general with Internet technologies I will be rooting for Google.
I’m sitting fireside at home and enjoying this debate. That’s one post-electorate vote for GOOG, and one post-electorate vote for MSFT.
Joe,
I am not voting for anyone. But the problem for Google is the culture. They are are used to selling Ads where their customers are kind of beholden to Google and that reflects in their support. Even simple things like changing an adwords account from a pre-paid to post-paid account is not possible. They tell you you have to open a new account etc. If they are serious about selling Apps to SMBs or Enterprises (through SaaS or otherwise), they need to change this culture. I think that is impossible. When you have your adwords customers begging you to get in however rotten your support is you cannot create a different support culture in parallel which has to provide real and helpful answers. As they say, it is the DNA and that cannot be changed. I seriously believe that is where Microsoft has an edge because of their extensive partner network and experience in providing real support.
BTW, I am seriously contemplating a blog post titled “Google, The Evil?” because even their own adwords support people do not know what is going on most of the time though they are all very smart people.
Sekar.
Sekar,
I would take your argument one step further: Google doesn’t sell ads. People buy Google Adwords. It’s a self-serve model… almost an automated sales machine.
I have great respect for Google and I generally “like” the company. But I also enjoy healthy debate and differing views — including this article titled: Is Google Making Us Stupid?
Sekar,
Now that I think about it, the other problem you’re pointing out relates to The Long Tail (one of my favorite books).
Google Adwords allowed thousands (millions?) of tiny businesses to participate in online advertising. Each individual business doesn’t spend much. But roll up this “long tail” and you have a huge amount of revenue. Trouble is, it’s impossible for Google to offer one-on-one, personalized support for all of those really small businesses.
Now, the company is casting a wide net (as you’ve pointed out) with its Google Apps Reseller program. So, supporting all of those resellers with personalized communications could prove equally challenging.
Joe,
Your point is well taken. But it is not a question of respect for Google etc. The problem is when you have such a huge success in a short period of time and there is no need for you to worry about customer service, then there is a culture of hubris that sets in whoever you are. In fact, we have had a very positive experience with the people we have interacted with in Google. But however hard these people tried to answer some simple questions they were not able to because everything is a black box and no one seems to know how all these things work. And they resort to the same guessing game we do without any information whatsoever. They would internally consult the experts and come back with the same guessing game. The randomness of it is what rubs you. My point, as you have understood correctly, is that this culture has to change if they have to do well with Google Apps.
I am not very sure about the Long Tail effect for Google. I actually think about 20% to 30% of Google’s Adwords customers may be contributing about 70% of their revenues. I may be completely wrong here.
Another point I failed to mention is that the margins in SaaS are inherently low. Look at salesforce.com. And that is another thing it will be impossible for Google to get used to. In that context, I wish you had included Amazon in your poll. They probably have the best shot at emerging as a powerful player as SaaS service provider. They have all the basic ingredients in place already.
Sekar
Sekar: You’re right. Amazon would have been a good addition to the poll. I will see if there’s a way to work them into the next polling discussion, starting Monday.
Sekar: The next poll, focused on Amazon.com, is now live on MSPmentor and our sister site, TheVARguy.com.
Joe,
I just voted “yes”. I think as the Cloud goes into mainstream in the near future Amazon has a huge advantage to become a leading platform for ISVs, MSPs etc. I seriously believe the stars are aligned in their direction.
Sekar.
Google, Amazon, and Microsoft are all great candidates. But, one thing history has show us is that the next great thing typically comes from out in left field somewhere. IBM should have had the heads up on the PC, but out of nowhere came Microsoft and Apple. Google beat out Microsoft and Apple when the internet came to prominence. Because of this, my vote goes to an unknown kid sitting in a dorm somewhere right now for the future leader in SAAS.
Paul: You’ve got a point in terms of new “disrupters” rocking the establishment. But don’t forget: Oracle, MSFT, IBM and others all adjusted to the ebusiness and dot-com crazes. They’ll continue to adjust.
Google’s culture and software design is native to the Web. Microsoft’s expertise has always been running software on a local device. This background will fundamentally keep Microsoft a step behind native multi-tenant software. http://www.lingotechnologies.com.
Steve: Hard to argue with you there. But I will give Microsoft some credit in a couple of areas. MSFT has successfully taken a few of its enterprise apps (SharePoint, Exchange) and pushed them into the hosted/SaaS market with success.