Mainstream enterprise software vendors breathed a collective sigh of relief when a much-hyped deal between Salesforce.com and Google in early June amounted to a hill of beans, as opposed to the paradigm-shifting event that everyone had anticipated — or feared — depending on one's perspective.
What you can't deny is that these two companies grabbed headlines and scared the you-know-what out of some very big companies. For no good reason, it turned out.
Part of what frightened the market is that these two companies have tried, with varying degrees of success, to upend traditional notions of what software is, what it costs, and how it is used. If these two companies could actually make good on their headline-grabbing mantras - "No more software," in the case of Salesforce.com, and "Don't be evil," in the case of Google (OK, that's the informal motto; the real one is about improving the way people "connect" with information) — the combination could constitute the kind of perfect storm that sends markets into tailspins and rivals into receivership.
Luckily, nothing of the sort even remotely came true, nor, in my opinion, will it any time soon. When you look behind the hype, you find two rather traditional companies doing rather traditional things — with very few paradigms actually being shifted along the way.
The perfect-storm threat from Google and Salesforce came from one of the tactics that Google is trying hard to hype as the next paradigm killer: its attempt to move into the small and medium-sized business — aka Microsoft's territory — with online versions of Word, Excel, Outlook, and other business tools. If you put Google's "desktop" tools together with Salesforce's "enterprise" applications, the combination would kill off Microsoft, SAP, and Oracle, or so the doomsday thinking went.
There are two very simple reasons why this won't ever happen, and they both speak to the primacy of software, the kind that neither Google nor Salesforce.com knows much about. First, Google's desktop software is so primitive and so unready for what the enterprise needs that it's almost silly to compare it even to a much earlier version of Office, much less Office 2007. In an era when enterprises are flocking in droves to products that offer strong connectivity between Office-like functionality and ERP back-ends — Duet from SAP and Microsoft, or Microsoft's Office Business Applications — the no-software, on-demand world of Google Apps is just too limited to meet the enterprise's needs.
And second, Salesforce's "no software," on-demand CRM product lacks enough software to make it a true contender in the enterprise market going forward. It simply lacks the product depth and built-in connectivity to make it a long-term competitor to SAP's and Microsoft's nascent, integrated on-demand offerings. Indeed, Salesforce has tried to remedy this with new offerings that, lo and behold, actually require the use of new software that Salesforce is more than happy to sell.
In the end, there are paradigm shifts and then there is hype. Google and Salesforce, like the end of software (and even, if you ask me, "Don't be evil"), are more hype than true agents of sweeping change. The end of software makes no more sense than the end of words or the end of music — or the end of companies like SAP, Microsoft, and Oracle. Google and Salesforce may be very successful companies, but that doesn't mean they can do the impossible. Not yet, anyway.