How niche cloud services can compete against the likes of Microsoft and Google

How niche cloud services can compete against the likes of Microsoft and Google
Anand Srinivasan is a consultant from Bangalore, India. He has over 7 years of experience in this industry having worked with a number of SMBs on their cloud adoption and market outreach strategies.

A recent study conducted by Osterman Research revealed the growing popularity of tools like Microsoft SharePoint. Between 2012 and 2014, the percentage of employees using SharePoint within an organization has risen from 39% to 75%.

A major reason for this terrific rise is due to the spurt in the use of intranet applications like document collaboration, file sharing and records management. Interestingly, file sharing on SharePoint (82% of respondents) appears to have trumped popular third party services like Dropbox (63% of respondents) at the workplace.

Intra-organisation collaboration is a major avenue for growth of cloud-based service providers. Unlike retail customers, enterprise-level partnerships help providers reach out to thousands of paying customers with minimal outreach.

This explains why Dropbox, despite its 200M+ user base is still second to SharePoint when it comes to enterprise patronage. While 100% of SharePoint users are enterprise customers who pay, less than 5% of Dropbox customers pay for their service.

But that alone does not provide us with the complete picture. What’s stopping retail users, who are also decision makers at businesses they work at, to subscribe to their favourite cloud tools at the workplace? Dropbox is without doubt the file sharing service with the highest brand-equity today. Despite that, why is SharePoint, which is better known for its intranet management applications, used more?

The answer lies in the advantages that a software suite provides to enterprise customers.

Businesses have a need for software applications to help them out with a variety of needs – including networking, knowledge management, collaboration, lead tracking and communication. While cloud services in general are cheaper than hosted software packages, the cumulative cost of paying for niche cloud services that solve specific problems is still higher than paying for one software suite that solves all these problems.

To elaborate, consider Google Apps for Business. For US customers, it costs $5 per user a month to access emails, voice calls, calendars and the productivity tools. In comparison, finding cloud service providers who offer these services à la carte can easily cost more than $10 a user. It’s understandable why CIOs at enterprises would decide to go with software suites compared to niche cloud based services even if they are priced cheap.

So how can these niche cloud players compete against software giants like Google and Microsoft that can afford to build these software suites? The answer lies in creating a consortium of niche cloud players to build a single platform that will offer customers a suite offering similar to the one provided by Google or Microsoft.

In the case of Microsoft, it is common to build a SharePoint governance plan to facilitate an easy access point for the multiple customizations and features offered by the software. Similarly, cloud players like Dropbox (file sharing), OpenAtrium (intranet CMS), DocStar (document management) and (enterprise social collaboration) need to partner to create a single interface that would provide customers with all of these services on a single platform; similar to what SharePoint offers.

This is not without precedence. Tools like HootSuite are popular tools for businesses to consolidate their social media platform. On a similar vein, a business collaboration tool that could bring together services offered by the various niche cloud players would go a long way in not only ensuring a competitive alternative to the likes of SharePoint, but also help these cloud based businesses have a better outreach among paying business customers. 

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