The SaaS space is heating up very fast.

Going on from my post the other day about different SaaS strategies, Microsoft has announced a hosted CRM solution that will undercut Salesforce‘s offering in terms of price.

I said (prior I might add to the MS announcment) that I saw Salesforce as being a SaaS/s and that this was a risky strategy on their part. I also said that Salesforce has sufficient momentum to protect itself until someone comes in cheaper and/or better.

Well, Microsoft have gone down the cheaper route – throwing down the gauntlet in the SaaS/s price wars.

Meanwhile Zoho seems to be going down the SaaS/v route, their product seems to be more than just CRM, it also has order management, procurement, inventory, and invoicing functionality. Seems they are going down the full enterprise functionality path.

Zoho has also hinted that they are working on a full ERP suite – this is the space that I believe Xero should be aiming for and does in fact provide rationale for their IPO (versus slower VC funding rounds) – Rod the pressure is on you to get the developers working fast and launch the product before someone else steals your thunder – just remember SaaS/v and a downward trending product development timescale!

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • Falafulu Fisi |

    I think that Microsoft will try to lure Salesforce potential customers by offering more to the package rather than just core CRM. May be they will throw in CRM Analytics, which is something I have no idea if Salesforce has or not.

  • Hello Falafulu – I must say I take it as an honour to have you comment on one of my posts – your breadth and depth of knowledge is outstanding among the NZ blogging crowd!

    Yes they may well add some features to their offering to make is more SaaS/v. I guess the difficulty is that if MS decides it wants the CRM market they have a significant amount of dollars they can sink into it – be it through acquisitions, development or predatory pricing

    Watch this space I guess

  • Hi Ben,

    Comes back to scale, last time i looked Salesforce had 26 000 customers or so, MS has what? 600 million? Go back the Mckinseys graph, if they have that much scale, they can halve their EBITDA and still make as much as Salesforce.

    The other thing is MS hasn’t been that successful with its business apps. (a bit contrary to the above but desktops will cross subsidise business apps) So ANY increase in demand is good for them, they could kill the market but gain massive scale and still come out on top

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