Forrester

Why Read This Report

Interest in software-as-a-service (SaaS) is heating up; 55% of firms tell us they are deploying the technology, will be deploying it in the next year or so, or are interested in it. In response, large software vendors and a host of startups have emerged to provide SaaS applications across a range of software categories. New vendors entering crowded, mature markets face special challenges. Dimdim, a new vendor entering the Web conferencing market, seems to have hurdled these challenges, reporting more than 5 million users as well as partnerships with Intuit, Novell, and Nortel CVAS. How? It designed a solution that allowed it to address a specific issue with Web conferencing technology for a broad portion of the market, and it leveraged the "freemium" model (a limited free service offering) to cheaply market that capability. For vendors hoping to replicate Dimdim's approach in other crowded markets, product design and marketing have to focus on solving specific business problems with a set of offerings that let users try and then buy the tool.