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Blair Reeves

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There are no GAFAs in enterprise

Many of us who run in software/tech circles tend to form exaggerated notions of just how dominant particularly popular vendors are. I ran across some enterprise software market share numbers recently that I think are pretty interesting to illustrate how our perceptions match up to reality.

Salesforce is currently the leading CRM vendor in the world. Yet that market-leading share is only about 18% of their total market:

Of course, this is a particularly Salesforce-friendly report from IDC. Personally, I think it’s exaggerated – I’m not sure I believe Salesforce has literally double the market presence of Oracle or SAP. Gartner put out a report just last year whose extrapolations wouldn’t match this. Different firms, different methodologies, etc etc.

Don’t misunderstand me – Salesforce is an absolutely tremendous company, and their share is growing fast. Yet for all you hear about Salesforce CRM, would you have guessed that, at most, maybe 1 in 6 enterprise CRM customers use them?

Next, consider Slack. Lots of people, especially in tech and media (two industries whose lanes tend to cross a lot), think Slack is utterly ubiquitous. But it is not. Anecdotally, I know swaths of people outside of tech/media who’ve never heard of it. But more interestingly, IDC also says that in the workplace collaboration software market, Slack only commands about 5% of the market. Compare that with 37% for Microsoft, with their Skype for Business and now Teams products.

Again – Slack is a truly tremendous product, and company. (I’ve personally built a game bot on their platform, which was surprisingly cool!) But I suspect that a lot of tech people hold vastly exaggerated ideas about either how widespread they are in their market, or how easy it will be to displace well-entrenched incumbents in a product space that many customers don’t perceive as critical. (I have a different blog post brewing about that last part.)

Personally, I come from the Marketing Clouds world. Market share numbers there are highly unreliable, closely questioned and never really a good apples-to-apples comparison. Nevertheless, the big three – Adobe, Salesforce and Oracle – constitute the biggest part of the market. IBM still owns a surprisingly large chunk of it, too (again, depending on how you slice the numbers).

As I’ve said before, there are no GAFAs in enterprise. There are no monopolists – just some major players who own big slices of the market, and then dozens or hundreds of others behind. Nor do I see this changing anytime soon. This is great news for innovators. Selling in enterprise is difficult, but for the most part, we do not encounter the same kinds of insurmountable obstacles to adoption that most consumer web products do today. That’s cool.

More on this to come.

Relevancy and Truth
Smart and Dumb

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