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ESRI have similar network effect to Microsoft. No individual product is that great but taken together it is very competitive. And ArcGIS online is developing that network effect in a similar way to Office 365.

Also, the GIS space tends to have crossover between different departments in companies. You have a mix of IT departments, GIS specialists outside of IT departments managing infrastructure, data management, casual users etc. Each has a different budget and a different competitive environment. ESRI sits as a compromise between these different groups. Each group may be able to adopt a competitor but not gain traction outside their group.