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Monday’s Musings: The Controversy Surrounding Gartner’s CRM Market Share Analysis

Published on May 6, 2013 by R "Ray" Wang

The Gartner Market Share Analysis:CRM Software Report Raises Questions On Accuracy of Market Sizing Reports

The recent Gartner report “Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012” has generated some controversy among the enterprise software set. The report and other reports such as these, are often used for bragging rights by vendors and for buyers to gauge vendor viability.

This specific report attempts to rank CRM software spending by vendor using total software revenue worldwide. The good news – the numbers are directionally correct with Salesforce.com claiming the top mantle from SAP this year with $2.525 billion in CRM revenue (see Figure 1). The bad news – many question the accuracy of the actual revenues numbers as listed in the press release, especially for the Microsoft Dynamics CRM business.

As Scott Bekker at Redmond Magazine reported, “Gartner put Microsoft’s CRM revenue at $1.1 billion, up from $900 million in calendar-year 2011. That’s a sizable bump. As of May 2012, Microsoft was only claiming that all of Dynamics, which includes Microsoft’s established ERP products as well as CRM, amounted to $1 billion in annual revenues.”

Mssr. Bekker makes a polite but astute point. The 26% bump in CRM revenue is significant. However, the total revenues are questionable. In any modest observation, that kind of overall growth in the Microsoft Dynamics unit would have Microsoft CEO, Steve Ballmer, shouting from the tops of Mount Ranier and probably have Kirill Tatarinov next in line to be Microsoft’s CEO.

Figure 1. Gartner’s Recent CRM Software Spending by Vendor, Total Software Revenue Worldwide, 2012 (Millions of Dollars)

Not to violate any copyright laws, despite fair use laws, here’s a link to the full table found in their press release. A recreated table below shows the rankings.

Bottom line it shows Microsoft in 4th place for CRM with over 1.1B in revenue.

Organization 2012 revenues 2012 marketshare (%) 2011 revenues 2011-2012% growth

salesforce.com 2,525.6 14.0 2,004.6 26.0

SAP 2,327.1 12.9 2,325.1 0.1

Oracle 2,015.2 11.1 1,870.0 7.8

Microsoft 1,135.3 6.3 900.9 26.0

The Market Sizing Game For Vendors And Legacy Analyst Firms Flawed With Faulty Methodology

In reality, the market sizing game for enterprise software is both an art with some science. Having played this role as a vendor in an Analyst Relations capacity in a past life, one knows that executives can not disclose such financial information directly to a research or market sizing firm. The research analysts must play a guessing game with the software executive and ask 100 questions to zero in on a number. Unlike hardware, where individual counts are more obvious, software revenue sizing requires analysts to dig deep into financial statements and any conversation where growth rates have been discussed. Revenues are hidden in bundling, suite sales, discounting schemes, channel revenue deals, OEM arrangements, and inter-company transfers. To complicate matters, SaaS revenue calculations can differ from how on-premises revenues are calculated. Analysts must also determine the truthfulness of vendors who are trying to indirectly guide analysts to the “right” numbers. In short, this is hard work.

As assumptions are built on previous numbers, one false guess in a previous year, cascades and geometrically inflates or deflates a set of future numbers. In the case of these CRM numbers, one may speculate that past executives may have provided a higher number than actually generated, resulting in the current alleged inaccuracies. Another speculation may come from previous and current analysts who may only focus on one area of the business and not have the total picture on the Microsoft Dynamics overall business. There are many points of inaccuracy that can occur with software revenue market sizing and every legacy analyst and market sizing firm works hard to avoid these situations. For market analysts, dissecting revenue from vendors such as SAP and Oracle is often difficult as these numbers and break outs are masked with multiple acquisitions and product lines.

To be clear, the SAP and Oracle numbers also seem inflated. These numbers have been inflated over decades. Given that these vendors also have many other lines of revenue aside from CRM, it’s hard to gauge the accuracy of their numbers without some digging. Now one would assume a market sizing firm should be doing this right?

The Microsoft Dynamics CRM Revenues Do Not Meet The General Sniff Test

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Executive Profiles: Kirill Tatarinov, President Microsoft Business Solutions

Published on April 22, 2013 by R "Ray" Wang

Welcome to our series of market maker 1:1 interviews with business leaders in the world of enterprise software The interviews provide insightful points of view from a customer, industry, and vendor perspective.

Kirill Tatarinov, President of Microsoft Business Solutions (@KirillTatarinov)

Kirill Tatarinov is president of the Microsoft Business Solutions Division (MBS) with responsibility for MBS research, development, sales, marketing, and operations. MBS develops and markets a portfolio of Microsoft Dynamics products and services covering a broad range of functions including financial, customer relationship and supply chain management (ERP and CRM) that bring simplicity, value and agility to organizations of all sizes.

Prior to joining MBS in 2007, Tatarinov led the Management and Solutions Division at Microsoft, where he was in charge of the Microsoft Windows management technologies and products, including Microsoft System Center, Systems Management Server, Microsoft Operations Manager and Microsoft Application Center, as well as Windows Server solutions, including Microsoft Small Business Server.

Tatarinov joined Microsoft in 2002 with 15 years of experience in the software industry. Before joining Microsoft, Tatarinov was senior vice president and chief technology officer for BMC Software Inc. While at BMC he also had responsibility for corporate development and for Patrol Software business. Before that, Tatarinov was co-founder, chief architect, and head of R & D for Patrol Software, the developer of innovative software solutions for systems and network management acquired by BMC in 1994. Before co-founding Patrol Software, Tatarinov worked in several systems, networking and consulting companies in Russia, Israel and Australia.

In January 2002, Computerworld named Tatarinov one of the business world’s 2002 Premier 100 IT Leaders. This award honors individuals who have had a positive impact on their organizations through the use of technology.

Tatarinov grew up in Moscow, Russia, and holds a master’s diploma in systems engineering from Moscow University of Transport Engineering (MIIT) and an MBA from Houston Baptist University. He serves on the Seattle advisory council of the U.S. Fund for UNICEF, whose mission is to help the world’s children.

Tatarinov lives in the Seattle area with his family. Outside work, he spends his time skiing and is a Level-1 ski instructor, certified by the Professional Ski Instructors of America.

The Interview

Constellation sat down with Kirill Tartarinov in New Orleans, LA during the 2013 Microsoft Convergence Conference to discuss the changes since 2007 and to take a look forward for the Microsoft Dynamics product line.

1. Customers don’t always associate Microsoft with innovation in the enterprise side. What are some milestones that counter that perception Dynamics?

Kirill Tartarinov (KT): While our roots as a company have been on the consumer side, make no mistake, enterprise is hugely important for what we do. People overlook the fact that Microsoft has been providing mission-critical solutions for over 20 years. We achieved significant milestones across the entire product portfolio from Windows and SQL Server to Office, the Cloud both public and private, and Dynamics. We have seen significant innovation from consumer to the enterprise. Innovation that helps Microsoft serve as the trusted advisor between consumers and business customers. But as far as milestones, what is most important is what we see here at this event (Convergence). Convergence is a reflection of our success in the enterprise. Every single one of our customers and partners are proof points. It is their path, their story of how they are innovating using both our enterprise and consumer technologies and making them better at what they do. As we move forward, we see the complete power of Microsoft coming together in the enterprise across Windows Server, Azure, Office 365, and Dynamics.

We are in the business of transformation. We are privileged to wake up every day and get the chance to help businesses unlock their potential by uniting the tremendous innovation across Microsoft and delivering it to people in business in specific scenarios, really helping every person be the best at what they do and helping businesses succeed by uniting their people, processes, and technology with their customers. That’s our mission. It is our differentiator and something Microsoft is in a unique position to deliver.

2.Let’s take a look at over the past 6 years since you joined MBS in 2007, what did you set out to achieve for across the division and across Microsoft?

(KT): There were three things I set out to achieve on behalf of our customers and the company. First, I set out to unite all MBS employees from Fargo to Hyderabad to Copenhagen to Moscow and Sao Paolo. Second, I had to turn Microsoft Dynamics into a profit engine for our shareholders and third, I had to create a sustainable, long-term growth strategy to ensure our prominence in the enterprise business applications long into the future.

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Event Report: Microsoft Dynamics Convegence 2013 (#conv13)

Published on March 19, 2013 by R "Ray" Wang

Customer Success, Acquisition, And New Features Drive Day 1 Headlines

Almost 12,000 Microsoft faithful converged in New Orleans for the flagship Dynamics event. Wayne Morris (@WayneMorrisOz), CVP kicked off the event reiterating the theme of “A World Ahead”. Meanwhile, Kirill Tatarinov (@KirillTatarinov), President of Microsoft Business Solutions Division, led the session with a series of impressive brands and compelling customer success stories. Highlights from the day include:

Impressive Global 2000 customer wins. Kirill hinted at wins at SpaceX and followed with live customer presentations from ShockDoctor, Chobani, Weightwatchers, and Revlon. Dennis Goetz (CFO) of Shock Doctor shared how they grew their business moving away from spreadsheets to Microsoft Dynamics GP. Maureen Hurley (VP of IT) and James McConeghy (CFO) explained how Chobani installed Microsoft Dynamics AX in their main New York plant in less than a year and then implemented Dynamics AX at a new plant in less than 27 days. Christine Butler (VP of CRM and Business Development, and Loic Vienne (VP of Systems) at WeightWatchers discussed how they put in Microsoft Dynamics CRM to manage with 500 million customer touch points a year. David Giambruno (SVP and CIO) and Steven Berns (Executive VP and CFO) of Revlon, made the impressive move to consolidate 21 ERP systems into one on Microsoft Dynamics AX.

Point of View (POV): The Microsoft Dynamics team has successfully moved up market from a previously SMB centric message. The rise of global 2000 customers in the $500M to $5B revenue range shows the growing presence, success, and scalability of Dynamics AX and Dynamics CRM. Though the business is estimated to bring $1.4B in revenue, Microsoft Dynamics still represents a small fraction of Microsoft’s overall revenue ($73.72B 2012). However, success in the Microsoft Dynamics business improves attach rates and cross-sells into Sharepoint, Office, SQL Server, and Azure. Microsoft’s small investment in Dynamics reduces customer fragmentation and plays a key role in long-term growth.

Acquisition of Netbreeze for social analytics. The Netbreeze acquisition brings data mining, natural language processing (NLP), and text analysis to social signals such as Twitter, Facebook, YouTube, 6,000 online news websites, 500,000 message boards, and 18M blogs. The system supports 28 different languages including Arabic, Chinese (Simplified), Chinese (Traditional), English, French, German, Japanese, Russian, and Spanish. Direct language translation beats translation back to one language.

Point of View (POV): Netbreeze and Marketing Pilot address a growing need among the customer base for marketing automation and management. Netbreeze is key to merging both the structured CRM information and the unstructured social signals. As the CMO role continues to reclaim its technology destiny, we are moving away from transaction integrity and moving towards surfacing insights. Netbreeze provides insight into marketing spend effectivity.

Announcement of Marketing Pilot 15. MarketingPilot 15 adds improved user experience and analytics. In addition, the long awaited connector to Microsoft Dynamics CRM arrives on March 2013. International general availability is planned for later 2013.

(POV): Marketing Pilot provides core marketing capabilities that were missing in Microsoft Dynamics CRM. Customers seeking an integrated marketing solution should consider Marketing Pilot. However, the technology platform is dated. For those customers seeking a cloud based approach, Silverpop, InfusionSoft, Aprimo, and Marketo may serve as better alternative today. Compared to CMS marketing products like SiteCore or Adobe CQ, Marketing Pilot remains a distant second in features, but a top contender when cost is considered.

Windows Azure partner hosted offerings for ERP. Partner hosting for Dynamics GP 2013 and NAV 2013 will be available in June 2013. Dynamics AX will see an Azure hosted version in 2014.

(POV): Among the Dynamics ERP customers, partner hosting remains a popular option for dipping their toes into cloud ERP. A key barrier to Azure hosting has been the performance issues with SQL Server for Azure. Resolution of those issues will free Dynamics to deploy more of its capabilities in Azure. The go forward architectural model for Dynamics AX resembles Dynamics CRM where a VM is assigned per tenant but all management is done by Microsoft.

New mobile applications for Microsoft Dynamics AX 2012. New mobile apps will address key horizontal functions such as expense management, time tracking, and approvals. The expense management offering will capture and reconcile expenses, time allows the completion of time sheets, and approvals allows managers to complete business requests. Microsoft intends to support Windows 8 and Windows RT tablets, Windows Phone 8, Android phones, and iOS phone devices

(POV): Customers are increasingly asking for a mobile experience. The move to address mobility focuses on “in-between time” tasks that improve productivity for employees and bolsters offerings for services based industries and public sector.

Figure 1. Ongoing #Conv13 Flickr Stream

The Bottom Line: Progression In The Dynamics Product Line Results In A Competitive Alternative For Customers

On December 21, 2000, Microsoft announced the intention to acquire Great Plains. In July 2002, Microsoft bought Navision A/S, the foundation of Dynamics NAV and AX. Until 2007, Microsoft Business Solutions had struggled to find and grow beyond its SMB niche. Over the past seven years, the team has focused on deepening vertical capabilities, improved integration with Microsoft components, expanding partner programs, and making strategic acquisitions for product and technology features. The process has been slow but steady but increased investment in Dynamics AX and Dynamics CRM has paid off.

Fast forward to 2013, Microsoft now has a strong portfolio of solutions that Global 2000 organizations can deploy with confidence. The MBS team is not afraid of tuck in acquisitions nor purchasing common IP from trusted partners. The rearchitecture efforts and gradual hosted capabilities have helped move the product forward. Consequently, customers and prospects seeking a newer architecture, Microsoft footprint, and deeper micro-vertical capabilities now consider the core Dynamics products for both ERP and CRM in short lists. Key use cases include the consolidation of ERP, move to Two-Tier ERP, and primary CRM system of record. However, customers should be cautioned that success will require selection of the right Microsoft Partner. Selection of the right partner is never an easy process as many partners exist and validation of capabilities still remains a challenge for prospects and existing customers.

Your POV

Are you Microsoft Dynamics customer? Do you plan to invest more or less with them in 2013? What do you think about their strategy? Are you ready to consolidate on Microsoft? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your apps strategy. Sign up for a Constellation Academy Workshop or let us assist with:

Assessing readiness
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Vendor selection
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Resources and Related Research

Event Report: The Sentiment At Microsoft Convergence 2011

Friday’s Feature: Microsoft Dynamics GP 2010

Research Report: Microsoft Partners – Before Adopting Azure, Understand the 12 Benefits And Risks

Monday’s Musings: The Hidden Value In SaaS Deployments

Trends: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

Research Summary: Best Practices – The Case For Two-Tier ERP

Tuesday’s Tip: When To Go With A Two-Tier ERP Strategy

Strategy: 5 Lessons Learned From A Decade Of Naught

Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010

Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

Reprints

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Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2013 R Wang and Insider Associates, LLC All rights reserved.
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Event Report: #InforSummit Reveals More Than A Redesigned Infor

Published on February 17, 2013 by R "Ray" Wang

Changes at Infor More Than Cosmetic

Analysts and tech watchers gathered on Valentine’s Day, February 14th, 2013, for Infor Summit, a progress check on Infor, the third largest independent applications vendor in the market. While many customers may not have heard of Infor, most have heard of the brands it has acquired over the last 20 years. These venerable brands include Baan, BPCS, Epiphany, Hansen, Intentia, Lawson, MAPICS, NXTrend, SoftBrands, and Syteline. Since industry veteran Charles ‘Chuck’ Phillips took over Infor, the software vendor has grown revenue from $2.2B to $2.8B. More impressive, for the past 5 quarters, Infor demonstrated double digit license revenue growth. Infor is now the third largest private firm in Business Insider’s Digital List witha $16B valuation. The management team emphasized three key tenets of the Infor strategy:

Focus on microverticals. With over 2151 possible market micro verticals, Infor intends to go deeper than the 21 sectors often classified as verticals. For example, in the wholesale distribution sector, Infor supports micro verticals such as electrical, building materials (BMAT), industrial supply, heating ventilation air conditioning (HVAC), and auto. For the auto sector, micro verticals include interiors, fixing elements, and plastics and moldings.

Point of View (POV): Infor’s strategy to go deep on micro verticals comes at a time when SAP and Oracle are no longer substantially investing R&D in deep vertical functionality. By going deeper and more specialized in micro vertical industries, Infor can differentiate on features and functionality desired by customers. Infor’s hired over 800 developers since Charles Phillips joined. The delivery and support of micro verticals is accomplished as Infor’s support folks are co-located with the developers and many key folks are still in their original on-shore development centers. With 4000 developers just focused on apps, Infor has the economies of scale to focus on micro verticals.

Investment in internet architecture. Infor’s design principles begin with architecting software for the internet and embracing a world of heterogeneous apps. Support for the Open Applications Group Integration Specification (OAGIS) standards allows Infor to standardize on a canonical business language for information integration. Infor requires its legacy applications to communicate with each other via XML as the common alphabet for identifying business processes and for defining business messages. Infor has made significant technology investments including updates to the core technology framework Infor ION, the mobility framework Infor Motion, social software platform with Mingle, and analytics via Infor BI. Infor currently generates $100M in cloud revenues.

(POV): The overall support for OAGIS standards allows Infor’s legacy apps to communicate with newer applications and avoid duplicate creation of common components. This standardization marks the culmination of the original work initiated by Soma Somasundaram, EVP Global Product Development in 2010. With Infor ION in place, Infor now has an integrative fabric using loosely coupled architecture. Customers can run legacy apps and also take advantage of new products and solutions. Moreover, this enables Infor a platform for rapid integration of future acquisitions. Customers should pay close attention to see what acquired product families have been enabled to take advantage of Infor Ion and what upgrade paths should be made to take advantage of future innovation. Expect Infor to nudge customers to the cloud as the margins are higher and the pace of innovation is faster.

Creation of a consumer design experience. Infor took advantage of their New York City location to hire designers focused on user experience. As part of this transformation, they created their own internal agency called Hook & Loop. Marc Scibelli, VP of Hook & Loop is in charge of the 40 person team behind the design thinking transformation. From mobile apps to branding, Hook & Loop provides the creative services for Infor (see Figure 1).

Point of View (POV): Duncan Angove, President at Infor’s talk about Beauty as a Competence reflected the deep transformation throughout the organization. Infor’s new user experience was first revealed to customers at the 2012 Inforum customer conference. Users will notice a stark difference between the new apps and the old apps. When apps begin with user design instead of engineering, the end users benefit. Customers can expect to see the difference in the new apps but will have to wait for the old apps to catch up.

Figure 1. Flickr Feed Scenes From The Infor Summit

<iframe align=center src=http://www.flickr.com/slideShow/index.gne?user_id=35408001@N04&set_id=72157632767067526&detail=yes frameBorder=”0″ scrolling=no width=”600″ height=”500″></iframe>

Market Momentum Shows A Shift In Customer Preferences For Outcomes Not Technology

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News Analysis: Aptean Six Months After The CDC Software And Consona Merger

Published on January 27, 2013 by R "Ray" Wang

Mergers Continue In The Enterprise Software Space

On August 7th, 2012, CDC Software and Consona Corporation merged to form Aptean. Over the past six months, Monte Ford, the president of Aptean has made key executive hires, committed to new product investments, and rationalized overhead. Key points in the acquisition include:

Merger creates economies of scale. The merger brings 1500 employees and over 9,000 customers together from CDC Software and Consona Corporation. Both CDC and Consona have grown through acquisition over the years. Headquarters will center in Atlanta, GA.

Point of View (POV): The acquisition provides greater scale required to compete with Epicor, Infor, Microsoft Dynamics, and Syspro in product development, distribution reach, and overhead savings. Greater scale provides Aptean the means to service both SMB and Global 2000 companies. Aptean must also find means to move its intellectual property assets into the cloud in order to drive cost reduction and increase innovation delivery.

Acquired products provide a large functionality footprint. The acquisition brings together 32 product lines in ERP, CRM, Supply Chain, eCommerce, supply chain, and public sector. Key product lines include 4-Gov Fund Accounting, Catalyst WMS, Compiere, Ecompix, IMI Supply Chain, Intuitive ERP, Knova KM, Made2Manage, MarketFirst Market Automation, Onyx CRM, Pivotal, Ross, Saratoga, and Trade Beam GTM.

(POV): Aptean’s broad product portfolio has a strong CRM/Front Office portfolio with Pivotal, Onyx, and MarketFirst. ERP solutions go deep into micro verticals and broad into both discrete and process manufacturing. Key solutions include Compiere, Intuitive ERP, Made2Manage, and Ross.

Focus on micro-verticals will create a differentiator. Aptean targets key vertical markets such as financial services, manufacturing, distribution, medical, high tech, and professional services.

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Event Report: Dreamforce X (#DF12) Emerges As The South By Southwest (#SXSW) For The Enterprise

Published on September 23, 2012 by R "Ray" Wang

Dreamforce Represents The Mecca For The “Art Of The Possible” In The Enterprise

Whether Salesforce.com’s flagship conference at Moscone Center was the most attended conference (~48,000) or the most registered for event (~90,000), matters not. When examined in context of the magnitude of what was accomplished, the impact of this 10th annual event transcends attendance numbers. Business folks and the converted IT brethren converged on the week of September 18th, 2012, to see what the future could be inside the enterprise. They left with inspiration and the gospel of what was possible, as told by those before them. The event represented the intersection of where aspiration meets innovation for the enterprise.

Key takeaways from interviews with over 100 attendees reflect the following trends:

Attendee sentiment signals the return of the front office. Prior to the coining of the CRM term, front office was the term which defined marketing, service, eCommerce, and sales force automation. The move back to integrated customer experiences reflects a renewed interest in all the front office touch points and all the support in the back office required to support the customer experience. Attendees walked in with questions about how to integrate their legacy ERP and expose their transactional systems into the front office.
Customers seek knowledge and case studies on business transformation. Delegations arrived to see how they could change their business. Most came with both business and IT to learn from the best practices of others. Almost every customer case study session was packed and common questions revolved around, “How did you do that?”
Product announcements and pre-announcements bring the enterprise closer to the consumer experience. Pre-announcement of Salesforce Identity for Winter 2013 will provide users with Facebook-like single sign on and identity management services. The availability of the Touch Platform services will provide a write once, deploy anywhere touch based mobile UI Experience. The pre-announcement of the Force.com Canvas provides a UI layer to run any other application within the Salesforce.com environment. The App Exchange Checkout delivers out of the box billing for developers and improves the users app store experience. Geolocation capabilities in the pilot of database.com in the Winter 2013 release will improve mobile experiences. Chatter communities pilot in Fall of 2012 and pre-announcement addresses the issue of multiple group management.
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Monday’s Musings: The New Engagement Platform Drives The Shift From Transactions

Published on August 27, 2012 by R "Ray" Wang

Convergence In The Five Forces Of Consumerization Of Technology Drives The Next Big Thing

Social has given us the tools to connect. Mobile has given us the ability to interact any time and anywhere. Cloud delivers access points to us with a rich array of content and information. Big data provides us with the context and information to make decisions. Unified communications and video transform how we share ideas. This convergence of the five forces of consumerization drives the next shifts in technology. The move from transaction to engagement and from engagement to experience is happening now. The era of transactional apps rapidly makes way for the era of engagement.

If Business Value And Outcomes Are The Goal, Then We Need An Engagement Platform For The Enterprise

The arrival of engagement platforms does not signify time to throw out the transactional systems. In fact, those systems provide the foundation required for engagement. The engagement layer exposes transactions and allow for deeper interaction and richer sources of information. However, the transactional systems lack the ability to support engagement.

In fact, organizations around the world struggle with building the right engagement strategy for their customers and employees. While crafting the right strategy should be designed prior to any technology selection, once completed, the technology to support the strategy does not exist out of the box from ANY solution provider. Unfortunately, the technologies to achieve engagement remain disparate and hodge podge. Many solution providers seek to achieve the engagement layer from different heritages:

Figure 1. Technologies Will Evolve From Transactions to P2P

The Engagement Platform Requires Nine Main Technology Components

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Event Report: CRM Evolution 2012 #CRME12

Published on August 14, 2012 by R "Ray" Wang

CRM Continues To Evolve In A World Of Engagement

The CRM industry’s major non-vendor customer focused event kicked off at the Marriott Marquis in New York from August 13th to 15th. Conversations with prospects and practitioners at the event highlighted a few emerging trends:

Shift from transaction to engagement. CRM traditionally focused mostly on the management, a bit on the customer, and very little on the relationship. Major shifts in engagement strategy reflect a move towards two way conversations, unstructured information, and influence models.
B2B and B2C are dead. The notion of forced fit silos to represent a customer no longer applies. The world is rapidly move to people to people models and new systems must reflect this.
The rise of customer experiences. Prior to the coining of the CRM term, front office was the term which defined marketing, service, eCommerce, and sales force automation. The move back to integrated customer experiences reflects a renewed interest in all the front office touch points and all the support in the back office required to support the customer experience.
SaaS/Cloud Best of Breed hell is a real issue. Rapid and random deployment of best of breed solutions versus mature suites results in some basic architectural deficiencies. These deficiencies result in inefficiencies that impact the delivery of customer experience as process, data, and meta data integration increase in complexity and cost.

The Bottom Line: Customers must focus on delivering a single source of truth in the fundamentals

Customers making the shift to next generation customer experiences realize that the basic laws of physics must not be violated. Regardless of where key components reside, a single source of truth must be delivered to support next generation customer experiences. This requires a strong blue print and engagement platform that delivers:

Listening and intent
Interaction history
Master data management (customer master)
Business process management
Complex event processing
Security and identity management
Integration

Your POV.

Are you ready for the new shift to front office? What are you doing to deliver an integrated customer experience? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your business strategy efforts. Here’s how we can assist:

Assessing social business/digital marketing readiness
Developing your social business/digital marketing strategy
Designing a data to decisions strategy
Create a new vision of the future of work
Deliver a new customer experience and engagement strategy
Crafting a new matrix commerce strategy

Related Research:

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.

Trends: The Battle For CMO Mind Share

Published on August 2, 2012 by R "Ray" Wang

Marketing and Advertising Budgets Are The New Land Grab

Constellation Research, Inc. predicts that the global advertising market (paid search, display, and classified) will hit $125B by 2015. While IT budgets continue to stay flat, marketing budgets are up. Warc’s recent Global Marketing Index (GMI) entered positive territory in March 2012. Consequently, the heat up in marketing and advertising market attracts not only start-ups, but also tech vendors looking to enter this lucrative market.

Solution Providers Rediscover The CMO Budget

In just less than 28 months, enterprise software vendors have bolstered their presence with Chief Marketing Officers mostly through acquisitions and partnerships. The goal – capture budgets allocated for digital creation, marketing automation and revenue optimization, advertising, CRM and customer experience, analytics, and information brokering (see Figure 1).

Figure 1. The Battle For The CMO Budget Comes From Six Fronts

Why the change? Marketing sits at the cross roads between the old analog world and the new shift to digital transformation. With each big shift, organizations will change what technologies they invest in, who they decide to partner with, and how quickly they will make the shift. This new battle for CMO mind share started when IBM purchased Unica for $480M in August 13, 2010 (Figure 2). The frenzied activity by Adobe, Dell, Eloqua, Google, Hubspot, Kana, Marketo, Oracle, Salesforce.com, and SAS Institute reflect the desire to be top of mind among CMO budgets.

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News Analysis: KANA Enters MidMarket With Trinicom Acquisition

Published on April 25, 2012 by R "Ray" Wang

Acquisition Brings A Proven Multi-Channel Cloud Based Service Offering To The Growing Mid-market

Sunnyvale, CA based KANA announced on April 24, 2012 it’s acquisition of Netherlands based Trinicom, a multichannel, customer contact software provider serving over 200 companies in the BeNeLux market. Trinicom’s flagship T5 all-in solutions addresses multichannel customer service through email response management, web self-service, call management, live chat, “letter, fax, and desk contact”, chat bot, and knowledge base. The acquisition marks KANA’s entry and commitment to:

Addressing the under served mid-market. Trinicom brings enterprise class customer service and engagement tools to mid-sized businesses. KANA states in its press release that “mid-sized organizations in both public and private sectors are increasingly seeking enabling technology to support emerging customer experience needs and to build, enhance, and extend relationships with customers.” Why? Mid-market companies seek enterprise class solutions that don’t require the enterprise levels of staffing, support, and infrastructure. Trinicom brings the expertise in sales, marketing, and support for the mid-market to the traditionally enterprise focused KANA management team.

Point of View (POV): Trinicom suite of products for key service industries succeeds given its mid-market focus. In general, these organizations have 20 to 200 customer service professionals. Referenceable and successful customers come from banking, education, internet, insurers, non-profit, publishing and media, retail & eCommerce, telecom, travel & transport, and utilities (see Figure 1). In fact, Trinicom delivers an end to end offering across social, web, and agent desktops. Past clients expressed general satisfaction with go live times less than three months and on average within six to eight weeks. Most clients praise the rich configuration tools which allow clients easy adaptation without expensive customization.

Gaining a SaaS based deployment option. KANA today offers on-premises and hosted deployment models for its enterprise customers. Trinicom brings its SaaS based technology and Cloud business model to KANA’s existing deployment options. Trinicom’s SaaS operations in Northern Europe complement Kana’s global data center reach.

Point of View (POV): KANA’s lack of a SaaS offering has led to some loss in deals as the market shifts to SaaS as the defacto standard. The good news – the Trinicom acquisition gives KANA customers and prospects more choice in immediate deployment options. Subsequently, KANA gains a SaaS foundation for future offerings in both the mid-market and enterprise.

Expanding customer and revenue base. KANA currently serves 600 commercial and 250 public sector organizations. Trinicom adds key global capabilities and European market expertise. For instance, Trinicom will expand KANA’s presence in the local public sector market in EMEA.

Point of View (POV): The acquisition expands KANA’s customer and revenue base into the growing and profitable mid-market. KANA gains an immediate opportunity to service the mid-market and effectively compete with eGain, Eptica, Moxie, and Parature. More importantly, Trinicom opens up a lucrative mid-market public sector opportunity.

Figure 1. Trinicom Spans A Range Of Service Verticals In The Mid-Market

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