At Huddle, we’re no strangers to throwing down the gauntlet to tech giants. It can be daunting, challenging and down-right scary when you are up against a company with a bigger reputation, that’s more established and is in fact one of the most recognizable brands in the world.

But you’ve gotta love a challenger. I doubt there were many ‘Team Goliath’ t-shirts when he fought David and it feels amazing to be in the position of underdog and people’s champion. The challenge might be bigger but so is the sense of achievement when you meet that challenge head on.

We won’t be the last and we certainly weren’t the first challenger to a large tech business. Smaller firms competing against big companies in tech has been going on for years. The following example is one very close to home for Huddle.

Sector dominated by an omnipotent software market leader….check.

A smaller web-based challenger comes on the scene….check.

Said smaller challenger is more flexible, agile and arrives with an innovative ‘by user’ pricing model….check.

The established company doesn’t get to grips with changing needs and technologies….check.

The previously dominant company sees market share eroded….check.

You’d be forgiven for thinking that sounds a little familiar. But we’re not talking about ourselves, we are of course talking about Salesforce.com taking on Siebel in the late 90s.

When Salesforce launched in 1999, Siebel was far and away the dominant CRM provider and was not bothered in the slightest about Salesforce’s web-based CRM tool that worked via a web browser. Salesforce also had a very flexible pricing structure that allowed smaller businesses to buy it one user at a time and to pay via monthly subscription rather than the whole package upfront.

But why should that trouble Siebel, which sold its product to massive organisations, that paid thousands for their deployment and were not likely to switch providers, let alone to a small web-based business?

Dismissing Salesforce was perhaps not quite on a par with the record company exec that passed on signing The Beatles, but it wasn’t far off. Saleforce.com’s software-as-a-service and individual pricing models were a massive success and Siebel soon saw its market share shrink as Salesforce moved from servicing smaller companies right up into enterprise space that Siebel had previously dominated.

Siebel weren’t the only ones outfoxed by the nimbler and more agile Salesforce but it certainly hit them the hardest. They were too small to compete with SAP, the market leader and too inflexible to fight off Salesforce. The organization was eventually bought by Oracle in 2005.

What is most interesting about this is not so much the good idea itself – although naturally we’re big fans of the SaaS model! – but how slow the rest of the market was to react as their business was being eroded almost overnight. We’ve blogged about Salesforce in the past and the company remains an inspiration for anyone with ideas of punching above their weight.

Alastair Mitchell

Co-founder


Request a Demo

© 2006 - 2019. All Rights Reserved.