Despite Google Apps' obvious limitations, the service's release was a market-changing event felt by Microsoft, IBM, Oracle, Salesforce.com and Cisco with its WebEx acquisition.
The Burton Group predicts Microsoft will take a hit but come out stronger with its argument that software-as-a-service augments software rather than eliminating it.
"While Microsoft may take a perception hit from Google, especially in the small and midsize business market, in the short run, it will no doubt regroup and come out stronger in the end," the Burton report says.
IBM, on the other hand, is looking weak, with a Lotus Notes strategy that hasn't embraced software-as-a-service, the Burton Group says. Both IBM and Microsoft admitted to feeling heat from Google Apps during a panel discussion in June. An IBM executive noted the company has a partnership with Google but said IBM still expects the search giant to become a competitor in the corporate market in the future.
While Oracle has dabbled in collaboration and content products for years, and offers the software-as-a-service Siebel CRM On Demand, it's likely to be overshadowed by Google's entrance into the market, Burton Group says..
Burton Group is more optimistic about Salesforce.com and Cisco's WebEx. Many enterprises will choose Salesforce over Google when it comes to software-as-a-service, because the products are more sophisticated, and Cisco's purchase of WebEx makes it a "new but potentially huge competitor in this area," according to the firm.
