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Oligopoly forms amid SaaS market consolidation – Valutrics

And then there were three

The report defined oligopoly as control For marketing automation software, Salesforce is close to forming another oligopoly along with Adobe and Oracle, depriving smaller vendors like Constant Contact and Bazaarvoice of revenue share, the report read.

SaaS market consolidation raises the chances organizations will be locked in — forced to paying one vendor for its services forever, the report continued. Whereas customers of traditional licensed software can turn down upgrades or cut maintenance fees That lock-in becomes more ominous when prices of cloud application subscriptions rise. That could happen, the report read, when these SaaS giants become so big that they can’t grow faster than the larger technology market. Investors then will demand that they turn profits, and vendors will stop using low prices to compete. Research and development cuts come next, and the big vendors will stop rolling out the kind of innovation that results in better software.