And Next to Attack Salesforce is….

I reported a couple of weeks ago about the aggressive stance salesboom is taking in order to
acquire Salesforce.com
customers.

Hot on the heels of that comes Netsuite‘s Renewforce program. Renewforce seeks to migrate SFA customers
to Netsuite’s own product line and is guaranteeing;

• A 50% cost saving (including service and support) when compared to
  Salesforce
• Increased functionality (including cross-selling and up-selling automation)
• 100 hours of professional services to handle the migration

More and more we’re seeing downward pressure on SaaS vendors – there is a
cyclical effect going on here. When Salesforce first bought SaaS to mainstream
business users, the major play was that their product would disrupt the
incumbent offerings. Much of this disruption was going to come about as a result
of the move from CAPEX to OPEX and the lower TCO of the product.

We’re now seeing the initial SaaS vendors begin to feel the pressure from a
new generation of vendors – all believing they can do it cheaper than SFDC.

It’s a little comical that, simultaneously with consumer applications
scrambling to find ways to gain a monetization path, business applications are
being pressured on all sides by downward pricing pressure.

I wonder how far this pressure will cause prices to drop and who is best placed to trim the fat sufficiently to come out on top?

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