A likely partnership between Google and Salesforce.com could encourage the adoption of software as a service in small and medium-sized enterprises, according to Forrester Research.
Reports from the Wall Street Journal suggest that Google and Salesforce.com are discussing a joint venture that would help the companies to compete with Microsoft in delivering customer relationship management (CRM) software to SMEs on-demand over the web.
"Google brings familiar software, such e-mail, calendars, and office applications, which SMEs can begin using as a starting point for getting their heads around the concept of software as service," said Forrester research analyst Rebecca Jennings.
"As smaller companies become more comfortable with the delivery of software this way, it will open possibilities for them to try more advanced applications, like the ones offered by Salesforce."
This could mean potential competition between Google Apps and Office Live, and between Windows Live and Google on advertising, as well as between Salesforce.com and Microsoft CRM, said Jennings.
Stronger links between Google's advertising capabilities and Salesforce.com's CRM software could enable users to automatically plan, price, place and track marketing campaigns from a central application within Salesforce.com.
Providing software as a hosted service over the internet reduces the need for user companies to invest in hardware to support the running of applications. In businesses that have limited IT infrastructures, this can provide access to software functions and packages that previously would have only been available to larger businesses.
Although the combined offerings of Google and Salesforce.com could be attractive to SMEs, Jennings warned firms against underestimating costs. "Look at cost of ownership carefully savings you could make from reducing the need for hardware in the first year could be offset by contracts enforcing lock-ins and minimum terms," she said.
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