On Wednesday, January 28, 2015, Amazon announced the launch of a new product: Amazon WorkMail. This new offer is targeted to enterprise businesses in need of email and calendar management offered on a subscription basis via a cloud service.
The announced features of Amazon WorkMail position the product as an alternative to Exchange, Microsoft’s backend for Outlook Web App (OWA), one of the core components of the Office 365 application suite. A lot of the editorial comment already published on this product makes additional mention of Google Apps for Business as a target. But Amazon WorkMail operates just fine with Microsoft Outlook as the client interface, something Google Apps for Business does not do.
With Amazon challenging Microsoft on the email and calendar front, and Facebook challenging Microsoft’s Yammer and, arguably, the rest of the collaboration features built into Office 365, it looks safe to say enterprise business consumers have increased their appetite for cloud SaaS productivity suites. Microsoft reported strong growth in the number of subscribers to Office 365 during its Q2 FY 2015 earnings conference call. Three big competitors are now on the playing field looking for some of the same action.
With consumers trending in this direction, the likelihood of competitors addressing product development from the perspective of “competition to be the best” certainly increases. As I have written on numerous occasions in this blog, Dr. Michael Porter argues this strategy is a mistake. I like Dr. Porter’s position. Readers interested in learning more about what he has to say on the topic may want to read a piece written by Joan Magretta back in 2011 for the Harvard Business Review titled Stop Competing to be the Best.
The cost of product development, together with a substantially narrower prospect horizon for multiple players marketing to, in theory, the same prospects (in actuality I would argue no two enterprise organizations are really the same, nor do they often exhibit the same needs), are two warning signs ISVs should take very seriously as they consider jumping into direct, brand to brand competition.
Ira Michael Blonder
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