"Our Take" - Vendor Talk

(Past Editions by: Date, Title, Topic)

 
About "Our Take" 
"Our Take" is a collection of daily vignettes covering a wide range of CRM topics. It's an attempt to add our own spin to the world of CRM. We will use the column to share our perspectives, opinions, epiphanies, web nuggets, or quite frankly anything that moves us. Get ready to expect the unexpected. And, don't be shy about sharing your thoughts.
 
 
1/5/06 - What Matter More Than Market Share
Yesterday I asked the question, "Does market share really matter." My opinion is that while it might have some relevance, it's not as big a deal as everyone makes it out to be.
 
One reader wrote, "What matters the most is the niche players who are rapidly increasing their market share. In other words, what the future of competition may look like."
 
Consolidation has been a topic in this industry for the last seven years yet we haven't seen the market distill to just a handful of players. Why? There are a couple reasons. One, CRM is a big market and no one vendor can provide solutions for "everything CRM." Two, creative new ideas combined with investment capital make for innovation from a host of vendors. Do you agree?
 
Gary Lemke, Publisher
(Share your thoughts)
 
1/9/06 - Anyone Out There?
Yesterday I asked if anyone had opinions about which up-and-coming CRM vendors might establish market leadership (greater than 10% market share) by 2008. I was a bit surprise by the lack of response.
 
Very few responded leading me to believe that either no one really knows or no one really cares. Knowing that the CRMAdvocate readership tends to actively reply when they care about the topic, I am assuming that no one really cares about market share numbers.
 
Is that a correct assumption or is this the sort of prediction best left to the analyst?
 
Gary Lemke, Publisher
(Share your thoughts)
 
1/10/06 - Market Share - Not Interested
When I was on the vendor side of things, we always had a market position slide in the Powerpoint deck claiming leadership of this or leadership of that. I would never think of going to market without it. However, most of the feedback suggests that "market share" just isn't that important.
 
Some focused on functional fit more than market share while others talked about a desire to see vendors partner more in the success of an implementation. Others suggested that market share might be a point of curiosity but not much else.
 
On the other hand, it was suggested that market share leadership is related to risk mitigation - the bigger the market share, the less risky the solution. I guess that is the case, if functionality fit and partnership exist. Bottom line: I would suggest that market share only come into consideration if all other decision points are equal.
 
Gary Lemke, Publisher
(Share your thoughts)
 
1/11/06 - Bigger is Not Always Better
Since we've been talking about vendor market share, I thought I would share what one reader wrote about her experience with the big guys. She wrote:
 
"Until we started working with the Siebels and SAPs of the world we thought they were always a safe buy. Wrong. They do not have the hands-on experience that smaller more entrepreneurial shops have. You need additional resources. That means the customer pays for a very large team versus a smaller one depending on the complexity of the project. We had to write the CTI spec for a Symposium-Siebel project because Siebel did not understand the complete desktop."
 
Now let’s be clear. Sometimes, the big guys are the right solution. The message is not that big is bad. Simply, big alone does not make it right.
 
Gary Lemke, Publisher
(Share your thoughts)
 
1/12/06 - Financial Viability of CRM Vendors
The selection process for CRM solutions almost always involves a discussion about the financial stability and future of the vendor. Perhaps that is one aspect where market share comes in to play assuming that bigger means more stable.
 
Unfortunately that doesn't always hold true. For instance, two of the bigger players, Peoplesoft and Siebel have ceased or soon will cease to exist while numerous small companies will be left standing as independents (at least for the time being). So it is conceivable that you recently selected one of the big guys based on size and stability over a smaller vendor only to find that a less tumultuous product path would have been the smaller vendor.
 
At any moment, any company of any size big or small can be acquired thus re-writing the product and technology roadmap you bought into. There are no promises against that. Therefore, about the best you can do is to gain a better understanding of the vendor's financial stability, not their ability to stay independent. Do you agree?
 
Gary Lemke, Publisher
(Share your thoughts)
 
1/13/06 - Financial Stability and Software Escrow
Regarding the topic of CRM vendor viability, one reader responded saying, "Companies can hedge some of the risk by escrowing the source code."
 
I am familiar with the practice of escrowing source code both from the vendor and buyer perspective. However, I am a bit suspect of the effectiveness of such practice. If the triggers have occurred for you to acquire the source code, you are probably on your own. It means outside support has probably ceased and the vendor is no longer able to invest in improvements and patches.
 
I think our readers would be interested to hear of anyone that has actually had to use escrowed software. If you have a story, click on the "share your thoughts" link and let me know what type of experience you had.
 
Gary Lemke, Publisher
(Share your thoughts)
 
1/18/06 - New Kids on the Block
I've not yet had the opportunity to look at the new solutions coming out of SugarCRM but I had one reader write to me saying:
 
"Why do big CRM implementations fail? Because they get too big, they collapse under the weight of project management, the weight of user expectations, and the weight of overhead required to get the job done. We implemented Sugar for our business in 48 hours and I can't think of anything that I feel I'm lacking vs. a vanilla Siebel 7 install. Oh and it's quicker...by a country mile."
 
This is not an endorsement for Sugar. However, I'm interested to hear if other Sugar users are having the same experience. Now is your chance to sound off and let me know what you think.
 
Gary Lemke, Publisher
(Share your thoughts)
 
2/7/06 - Making the Switch
If you have been a CRMAdvocate reader for any length of time, you probably have read at least one news item about vendor x replacing vendor y. Announcements like this don't happen every day but they do seem to be getting more prevalent. It's hard to tell if there are more "switches" going on or if organizations are just more willing to talk about it.
 
One recent example, was an announcement by Onyx that AIG Edison Life Insurance, a Tokyo-based division of American International Group, Inc. had selected Onyx to support its ongoing Customer Relationship Management (CRM) strategy as a replacement to a Siebel implementation. Reason? It didn't have anything to do with the Oracle acquisition.
 
Rather, it was reported that the reason for the change was "that Siebel had proven extremely costly to maintain." Cost is a relative thing - relative to return on investment (ROI). Costs can be high if the return is even higher. Does the Oracle acquisition make Siebel users re-look at their ROI?
 
Gary Lemke, Publisher
(Share your thoughts)
 
2/9/06 - You Can Check In, But You Can't Check Out
Years ago, I had my own experience with Salesforce. Overall it was a good experience and I feel positive enough about it to suggest people evaluate it for themselves.
 
However, I did have a bit of difficulty trying to terminate the service. And I'm not alone. I've had multiple people write to me saying they experience similar "feet dragging" suggesting there is a systemic resistance to people dropping service or reducing the number of licenses.
 
One reader wrote, ". . . numerous e-mail notifications, and promises of billing fixes only to get additional collection letters" while another wrote, "I wanted to drop a license because a rep had quit, and salesforce.com claimed not to have received the notice. The resulting billing dispute resulted in termination of service until the issue was resolved by payment." Perhaps there is something to the control issue mentioned in yesterday's column . . .
 
Gary Lemke, Publisher
(Share your thoughts)
 
3/13/06 - Window of Opportunity
Over the last few weeks, I have had the opportunity to talk to a wide range of solution providers. We are briefed on upcoming announcements including new products, new partners, new customers, etc. As one might expect, most of the stories are quite bullish. That is, they are very bullish about their future.
 
And why not? At the enterprise level, there is a window of opportunity that didn't exist in years past. Oracle's acquisitions of Peoplesoft and Siebel now mean that the assets and energies of the three aforementioned companies are inwardly focused on trying to "figure it all out." Some experts suggest that it could take years.
 
In the meantime, most companies are reporting loosened budgets as it pertains to the acquisition of CRM technologies. So while I would not consider it a "perfect storm" opportunity, 2006 looks to be a golden opportunity for new CRM leaders to emerge. What I'm waiting for is a CRM vendor to make a bold move to capture the flag. I don't see it happening yet. Do you?
 
Gary Lemke, Publisher
(Share your thoughts)
 
5/5/06 - Does Indefinitely Mean Forever?
Oracle had previously made assurances that it would support products acquired from Siebel and Peoplesoft through the year 2013. In software years, that is a lifetime. But it seems the commitment was viewed as short-sighted.
 
At a recent user conference, Oracle revised their commitment saying they would support and upgrade acquired product indefinitely. In short, there would be no forced migration to next generation applications. Is this a story of a company listening to concerned and vocal customers? Is it a message of assurance to keep defections to a minimum?
 
Or could it be that Oracle realizes that the acquired technologies represent something better than the applications developed in-house? If Oracle can change their support strategy in such a short time, one has to wonder what other commitments might change down the road. If you are a Peoplesoft/Siebel/Oracle customer, tell us what you think about what Oracle is telling you about your future.
 
Gary Lemke, Publisher
(Share your thoughts)
 
6/2/06 - Do the Big Boys Have Their Hearts in It?
That was the title of a sidebar article in Information Week Magazine a week ago regarding a cover story on Salesforce. The sidebar talks about how the established vendors are "stampeding" toward the software-as-a-service model but have yet to see much payoff.
 
The article goes on to describe the efforts of companies like SAP, Oracle and Microsoft as "sleepy," "heartless," and "uninformed." What is left up to the reader to decide is if the lack of fervor is the result of slow market adoption or defensive posturing.
 
The established players must respond to the SaaS question - there is no doubt that some type of response is required. But the Big Boys recognize they need to be careful not to slay the cash cow associated with their traditional software licenses especially since the cash cow funds the development of the new SaaS offerings. But when your heart is divided can you be true to either? Can the established guys be both software vendor and software-as-a-service provider?
 
Gary Lemke, Publisher
(Share your thoughts)
 
6/8/06 - Mergers and Acquisitions, CRM Style
"What do you think about Onyx being bought?" I get that type of question every time there is a CRM vendor merger or acquisition. Over the last few years, it has been a frequent question.
 
Ever since the early days of Vantive, Scopus and Clarify acquisitions (are you old enough to remember those companies?), people have predicted the consolidation of CRM makers to a mere few that could be counted on your fingers. A decade later that is hardly the case because although we have seen the ranks shrink through acquisitions, mergers and failures, many new CRM vendors have been launched. That's the good thing about innovation and venture capital.
 
OK, back to the Onyx question. The acquiring company is one that acquired an ERP vendor in the SMB space a few years ago. Since it was a company that we have worked with in the past, I have watched from a distance as they have made the hard decisions via leadership and strategy to garner market share and profitability. This impressive track record bodes well for a bolder and better Onyx. Let's see if they can do it again.
 
Gary Lemke, Publisher
(Share your thoughts)
 
6/20/06 - Microsoft CRM Update - 2006
Late last year, Microsoft announced their intentions to skip version 2.0 of their CRM product and go directly from v1.2 to version 3.0 with product shipments in the fourth quarter of 2005. At the time, Microsoft claimed to have over 5,000 installations so I challenged Microsoft users to tell me what they liked about the new release.
 
Did Microsoft make good on their promises of more functionality, more integration, and better "software as a service" capabilities? When I asked the question, the new release had not reached end-users. But it had reached Microsoft partners who replied with rave reviews. I would expect that much from loyal partners.
 
Now that Microsoft CRM version 3.0 has been out for a while, I want to ask the question again: Has Microsoft delivered on their promises? What do you like and dislike about the product? Please share your first hand experiences.
 
Gary Lemke, Publisher
(Share your thoughts)