Posts Tagged ‘Lithium’

Event Report: Lithium Network Conference 2012 #LiNC

Lithium Technologies Shows Continued Customer Momentum And Success In Social Marketing And Support
To the tune of over 500 customers and prospects, Lithium kicked off LiNC on May 2nd, 2012, at the always stunning Intercontinental Hotel in San Francisco.  Compared to previous years, the audience was not only bigger, but also more experienced and energized.  Rob Tarkoff (CEO) and Lyle Fong (Founder & Chief Strategist) kicked off the event with company updates, product road map highlights, and customer progress made over the past year.
Adding to the energy, four compelling case studies graced the morning and highlighted Lithium’s strengths in two distinct and advanced externally focused social CRM (SCRM) use cases: social customer support and marketing.  The wide range of proud customers and brands included Chris Blandy, SVP of Digital Media, Fox; Mark Nichols, Director of Customer Support, Skype; Andrew Leary, EVP & GM, Ipsos; and Steve Young, Sr. Director of Technical Services, Cisco.  During the event, several key announcements were made including:
  • Launch of a new product, Lithium Response. In a top secret OEM partnership, the team unveiled Lithium Response™ a product that enables brands to increase customer satisfaction while reducing costs and improving efficiency in the call center.  Key features include easier processes to turn community conversations from unstructured information to entries into the Lithium Tribal Knowledge Base (TKB), peer-to-peer support and gamification incentives to drive self-service customer resolution, cost effective social-web support, blended contact center capabilities, and mobile enablement.  The product is generally available (GA) in Q3.

    Point of View (POV):
    The OEM’d product comes from a little-known but powerful solution from a privately held, purpose-built social customer care platform.  The product maximizes agent efficiency via categorization, prioritization and queuing, and routing.  The system is smart enough to guide customers to self service by replying with relevant links to community content.  This platform has been battled test with complicated communication service provider (CSP) environments.  Adapted for the Lithium platform, customer can expect a rigorous enterprise class solution that lives up to Lithium’s standards.  Lithium Response™ also takes advantage of Lithium’s access to the Twitter fire hose.  The movement to address multi-channel customer support puts Lithium in unique league with vendors such as Genesys Labs, Kana, and Moxie Software, who can blend contact center and social support.
  • Delivers new release of social marketing. Building on customer feedback, the new Lithium Social Marketing Solution™ focuses on improving engagement.   New features include support for rich media interactions, ad hoc groups, streaming conversations, and a new ratings and reviews module.  A partnership with Shoutlet provides Facebook and Twitter campaign management.  Social engagement is updated to include photo sharing, inline-conversations, groups spaces, and adoption of commons social logins.  The new ratings and reviews module allows community driven content to be included via widgets.  New development tools on iOS improve customer experience in the mobile interface of choice.  The product is now generally available (GA).

    Point of View (POV):
    Customers showed significant interest in the new social marketing solution features.  The ability to improve ratings and reviews is much needed as this has become table steaks in communities and product catalogs.  What’s impressive is the new line of partnerships that align with Lithium’s core strategy.  Instead of building their own content publishing platform for campaigns, Lithium takes advantage of Shoutlet ability to place various types of content easily into the conversation. Partnerships with VMWare’s Socialcast unit allows Lithium’s Social Marketing Solution™ to integrate with internally focused collaboration tools to expedite the concept to product introduction process.
  • Begins concerted global expansion. Lithium announced new APAC headquarters in Singapore which add to its Sydney APAC presence.  Lithium also has a strong presence in EMEA with operations in Paris, Zurich, and London.

    Point of View (POV):
    As the market consolidates through attrition and acquisition, Lithium’s push to get more feet on the ground around the globe is much welcomed by customers.  Lithium needs to expand fast and put its $53M in funding to work to acquire long-term customers in expansion markets.
  • Ups the ante in partnerships and alliances. New partnerships with Ipsos and Geoffrey Moore provide access to market research.  Agency relationships include Sapient Nitro and Acquity group.  Lithium adds software partners such as Shoutlet and VM Ware.  Lithium’s approach is to find a small number but committed set of alliances and partnerships.

    Point of View (POV):
    Lithium’s partnership and alliance program traditionally was the weakest among the major SCRM players.  The addition of Ed Van Siclen, SVP of Global Alliances and BD, brings enterprise class partnerships to the Lithium’s arsenal.  As SCRM matures, key partnerships with major system integrators must be prioritized as well as carefully crafted agency relationships.  Software partnerships back to transactional systems such as ERP, CRM, and master data management will be key to long term success and enterprise adoption.  More importantly, continued alliances with other engagement applications will keep the innovation engine alive for existing customers as they focus on improving engagement.

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News Analysis: Spinnaker Expands JD Edwards Support With Versytec Acquisition

Versytec Acquisition Addresses Growing Demand For JD Edwards Support


Denver, Colorado based Spinnaker Management announced on March 6th, 2012 its acquisition of competitor Versytec.  For those who remember their third party maintenance (3PM) history, Versytec was among the first firms to announce third-party maintenance services within a year after PeopleSoft acquired JD Edwards in July 18, 2003.  Constellation estimates that Nashua, New Hampshire based Versytec had between 35 to 40 active 3PM customers.

Third-party maintenance describes support and maintenance offerings delivered by non-OEM providers. These vendors can provide a range of options from basic break/fix to bug fixes, performance optimization, tax and regulatory updates, and customization support. Keep in mind, 3PM does not provide access to upgrades and future versions of the OEM’s product. One big driver is the lower cost of delivery, as much as half the cost of the original vendor’s pricing.  Today most customers pay in maintenance and support the equivalent of a new license every 5 years without achieving the value.  For an average JD Edwards customer that upgrades every 15 years, that’s three times the cost of the original license cost.  In the latest Constellation research report, third party maintenance is one of many strategies to free up millions for customers to fund innovation.

The Spinnaker-Versytec deal is important for a few reasons:

  • Many JD Edwards customers seek alternatives to Oracle’s pricey maintenance fees. Software ownership costs continue to escalate as vendors accelerate their efforts to capture support and maintenance revenues.  From inquiries, surveys, and conversations on the ground, many Oracle JD Edwards World and EnterpriseOne ERP customers seek options to buy-time as they consider whether they upgrade or migrate from their current version.  Why?  Most JD Edwards customers run stable environments and do not gain any value from the Oracle one-size fits all 22% support policy.  Most customers seek phone support and tax and regulatory updates.
  • The market needs more options and choices in the third party maintenance market. Many OEM vendors have gone to the extreme to eliminate third-party options for their customers.  This anti-competitive behavior takes away choice for the customer. A bulked up Spinnaker creates a viable organization that has the critical mass to compete with Oracle.   The combined entity provides third party support services to an estimated 100 160 JD Edwards customers across the globe.
  • Spinnaker Support offers a different approach to third party maintenance. Spinnaker couples its third party maintenance options with consulting services providing a one-stop shop for JD Edwards customers.  Spinnaker also differentiates in its download methodology of customer entitled IP from Oracle.  Spinnaker provides customers with a checklist of what to download prior to migration off Oracle support.

The Bottom Line: Users Must Advocate for Third-Party Maintenance Rights Across the Technology Stack

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Research Summary: Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions

Forward And Commentary

Software ownership costs continue to escalate as vendors accelerate their efforts to capture support and maintenance revenues. Some vendors have gone to the extreme to eliminate third-party options for their customers. This best practices report examines three strategies to free up unnecessary costs to fund innovation and new projects.

A. Introduction

On average, IT budgets are down from 1-5 percent year-over-year, yet software support and maintenance costs continue to escalate ahead of inflation. Hence, continued pressure on IT budgets and a growing need for innovation projects have top business and technology leaders reexamining their software support and maintenance contracts for cost efficiencies.

Based on experience from over 1500 software contract negotiations, Constellation suggests three approaches to reduce the cost of software support and maintenance. Key strategies include third-party maintenance, shelfware reductions and unbundling maintenance contracts as part of every organization’s tech optimization strategy. Successful implementation can lead to savings from 10-25 percent of the IT budget, freeing up cash to fund innovation initiatives.

B. Research FindingsWhy Every Organization Should Consider Third-Party Maintenance, Shelfware Reductions and Unbundling Maintenance Contracts

Most organizations suffocate from the high and hidden cost of support and maintenance. On average, Constellation’s surveys reveal global IT budgets trending down from 1-5 percent year-over-year since 2008. Consumerization of IT, rapidly changing business models, and aging infrastructure have exposed the high cost of software support and maintenance. Because most organizations allocate from 60-85 percent of their budget to keeping the lights on, very little of the budget is left to spend on new projects (see Figure 1).

Organizations can unlock millions by considering third-party maintenance (3PM), reducing shelfware, and keeping support and maintenance contracts unbundled. Each strategy on its own creates opportunities to drive cost savings. All three strategies combined, provide a roadmap for funding innovation.

  1. Third-party maintenance (3PM) delivers the most immediate cost savings and opportunity for innovation. Third-party maintenance describes support and maintenance offerings delivered by non-OEM providers. These vendors can provide a range of options from basic break/fix to bug fixes, performance optimization, tax and regulatory updates, and customization support. Keep in mind, 3PM does not provide access to upgrades and future versions of the OEM’s product. One big driver is the lower cost of delivery, as much as half the cost of the original vendor’s pricing.  The report shows a survey of 268 respondents and why organizations choose 3PM and who the key vendors are.
  2. Reduction of shelfware remains a key pillar in legacy optimization strategies.  Shelfware (i.e. purchased software, not deployed, but incurring annual maintenance fees) is one of the biggest drains on operational expenses for enterprises. The simple definition of shelfware is software you buy and don’t use. For example, an organization that buys 1000 licenses of Vendor X’s latest ERP software and uses 905 licenses, becomes the proud owner of 95 licenses not being utilized. That’s 95 licenses of shelfware because the user will pay support and maintenance on the license whether or not they use the software or not.  The report details 4 successful and proven approaches.
  3. Unbundling maintenance contracts prevents future vendor mischief. About a decade back, vendors would offer support and maintenance as two separate line items on their contracts. Support would run about 5-10 percent of the license fee and so would maintenance. Keep in mind, average support and maintenance fees were under 15 percent back then. Unfortunately, many users have expressed a growing and concerning trend with support and maintenance contracts. Vendors concerns about support and maintenance contract retentions have led to new initiatives to consolidate contracts. At first glance, this may appear to be proactive and beneficial to customers, but the report details three rationales vendors provide and three strategies how to avoid bundling.

Figure 1. Visualizing the High Costs of Support And Maintenance

(Right-click to see full image)

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News Analysis: Lithium Technologies Adds $53M in Financing

New Funding Shows Strength In Social Business Market And Lithium’s Business Model

Emeryville, California based Lithum Technologies announced today that it raised $53.4M in financing.  The lead round is from New Enterprise Associates (NEA). Other investors include SAP Ventures.

  • NEA leads the round with Peter Sonsini joining the board. Peter‘s been active with ecommerce play BeachMint, community platform BuzzMedia, ruby development player Engine Yard, and cloud player Eucalyptus.  Of note all “existing Lithium investors, including Benchmark Capital, DAG Ventures, Emergence Capital, Greenspring Associates, Shasta Ventures and Tenaya Capital” participated in this D round.

    Point of View (POV):
    NEA’s traditionally gone in early and invested with visionary entrepreneurs.  However, this play fits along its second investment thesis for venture growth equity opportunities.  NEA’s track record bodes well for Lithium should they decide to go the IPO route.  More importantly, NEA provides Lithium with a vast network of resources for both sales, business development, and expansion.
  • Lithium’s executed well amidst an increasingly competitive landscape. Lithium has shown growth into key verticals including auto, consumer products, financial services, retail, technology, telecommunications, and travel and leisure.  Key wins and expansions include BskyB, McDonalds, Nestle, Nissan, SuccessFactors and Telstra.

    Point of View (POV):
    Expansion into key verticals, improvement in SaaS upgrade technology, and the addition of enterprise class executives such as Rob Tarkoff, Ed Van Siclen, and Jim Drill show a seriousness to take the company to the next level.  The social business sale is starting to expand beyond the CMO role and across other line of business executives.  As the sale touches across the enterprise, the new management team is better positioned  to address the needs of CIOs, CFO’s, and other line of business execs as well as agency and system integrator partners.  More importantly, Lithium can expect consolidation in the market and increased competition from Jive, Salesforce.com, IBM, and others to heat up.

The Bottom Line For Customers: New Financing Validates Your Investment With Lithium Technologies

The strength and size of the additional financing validates Lithium’s position in the market place and bodes well for both existing customers and prospects.  Lithium intends to expand its role in defining the social customer experience.  This round of additional financing enables Lithium to:

  • Support new social business use cases
  • Expand into new markets such as digital agency ecosystem and growing geographies
  • Invest in more research and development
  • Fund future acquisitions
  • Improve service delivery for existing customers

The market place is about to consolidate and the additional funding ensures stability at Lithium as well as reaffirms its position among the leaders in social customer experience and the broader category of social business.

The Bottom Line For Technology Vendors: Expect Consolidation Across The Vendor Landscape In 2012

Activity around social business deals have accelerated in the last three months. Jive’s IPO has provided this market category with a catalyst for continued investment.  More importantly, key fundamentals such as increasing customer adoption, continued market share gains by start-ups and pure-play vendors, and interest by established software vendors indicate the beginning of a mergers and acquisition cycle in 2012.  Technology vendors can expect deals and partnerships as each of the Social Business software categories: Customer engagement, SCRM/ External Communities, Enterprise 2.0/Internal Collaboration, and Social Middleware combine to address the 43 use cases of social business.  The market can expect the following combinations:

  • Established CRM vendors to add social offerings
  • Social middleware vendors to move up the stack
  • Consolidation of SCRM players with Enterprise 2.0 communities
  • Expansion of SCRM vendors into other CRM areas

 

Figure 1. Expect Consolidation Across The Vendor Landscape In Social Business For 2012

 

Your POV.

Are you ready for Social Business? If you are a Lithium customer, what do you think?  Got a question?  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Please let us know if you need help with your Social CRM/ Social Business efforts.  Here’s how we can assist:

  • Assessing social business/social CRM readiness
  • Developing your social business/ social CRM  strategy
  • Vendor selection
  • Implementation partner selection
  • Connecting with other pioneers
  • Sharing best practices
  • Designing a next gen apps strategy
  • Providing contract negotiations and software licensing support
  • Demystifying software licensing

Related Research:

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact sales (at) ConstellationRG (dot) com.

Disclosure

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

Copyright © 2012 R Wang and Insider Associates, LLC All rights reserved.

Executive Profiles: Disruptive Tech Leaders In Social Business – Rob Tarkoff
, Lithium Technologies

Welcome to an on-going series of interviews with the people behind the technologies in Social Business.  The interviews  provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Rob Tarkoff, President and CEO Lithium Technologies


Biography

Rob Tarkoff is president and CEO of Lithium Technologies, the leader in Social Customer Solutions.

Before assuming the CEO role at Lithium, based in Emeryville, Calif., Rob was Senior Vice President and General Manager of Adobe Systems’ Digital Enterprise Solutions business unit that had annual revenue in excess of $1 billion. Rob pioneered Adobe’s Customer Experience Management strategy, and was responsible for the core Acrobat, Adobe Connect Web conferencing, Adobe Digital Enterprise Platform, and customer experience management offerings. He oversaw the Web content management and digital asset management solutions gained through Adobe’s acquisition of Day Software. Rob also led Adobe’s worldwide enterprise solution partnerships, including system integration partners and strategic ISVs.

Before Adobe, Rob held several executive positions at EMC Corporation, Documentum, Inc. and Commerce One.

The Interview

1. Tell me in 2 minutes or less why Social Computing is changing the world for your customers.

Rob Tarkoff (RT): Social computing is changing the way marketers and line of business executives interact with their customers. It’s not another channel. It’s a philosophy. It’s a key way that customers experience brand.

The larger question is: “How do you design, build, deploy and manage an effective solution in the midst of massive evolution?” And, unfortunately, there is no common interpretation of social. Some get it fundamentally wrong when they view this only as a channel. Some are enlightened with a new philosophy to serve their customers.

Today, we face an expectations-gap between the consumer world and business environment. Employees and customers yearn to experience software and offerings as social and community based, whether it’s shopping, gaming, or internal collaboration.

What’s interesting is there is a generational gap here. People are very interested in including their reference peer group in everything they are doing with recommendations and experience sharing. A slightly older demographic may see the value of social, yet have not implemented that into everything they do. They see it as a major advantage, but may not fundamentally know how they want to engage with the ongoing experience

Meanwhile, the 40 to 50 year old demographic is engaged. They have to think about social the same way they think about rich media. For this group, social media is a rich media. This medium provides new ways to interact and experience. They expect these paradigms to be designed into everything.

2. What makes social computing disruptive?

(RT): The major disruption is the change in the power balance. Consumers have the power because they can quickly amplify their experience with admiration for a brand they love or rally their connections to hear their injustice. Companies are responding as much as they are leading. We now have the customer-network effect.

With social on everyone’s mind, company authenticity gains in importance. You can’t hide stuff in a social world because everything you do is on Twitter and Facebook. The major disruption is people have all the power and expect to use the power to surface whether or not a company is authentic.

Is a company doing what it says it’s doing? Are they true to the core of what they are about?

People are more willing to tweet or post on Facebook about a bad experience than call a company to tell them they had a bad interaction. This makes the way companies must respond to customers very different. And, you need to build this competency into your call centers and at every customer touch point.

Now, the only way to differentiate yourself and experience is through service and customers experience. Some may some say this is a major challenge, but those who have embraced can make the social customer experience an opportunity to differentiate, accelerate sales, and build brand advocacy.

3. What is the next big thing in Social Business software?

(RT): We have spent years uncovering what makes communities so powerful. Today, we are working on helping business executives understand the business impact. There are a lot of start-ups and un-proven technologies in the market creating confusion. At Lithium, we’re interested in understanding the effect of communities on people’s loyalties. What makes a community tick? What makes them sustainable? What makes a visitor return? Tell their friends? These are critical aspects for business executives to understand and core to social business software.

Interactions must be much more interactive and dynamic. I can’t stress enough how important it is that companies focus on the health of their communities, guiding them to create, encourage and reward brand advocates.

Social business software also helps drive down customer service costs. But this really is so much bigger than containing costs. We’re changing the competitive dynamics across entire industries.

4. What are you doing that’s disruptive for Social Computing?

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Monday’s Musings: A Working Vendor Landscape For Social Business

Confusion Persists In The Social Business Market

As with any new disruptive technology, the social business solution landscape faces a dynamic, confusing, and converging market. As vendors seek to grab mind share and market share, customers and prospects remain confused as to what are the right business problems to address with social business. However, rampant confusion among users hampers efforts to solve business issues. Three key factors accelerate this level of confusion:

  1. Early adopter market. Constantly changing conditions force customers to alter original plans as executive sponsorship fluctuates from intense to pensive and back to intense in short cycles. Projects remain secretive for competitive advantage reasons. Consequently, prospects lack strong case studies to build off of despite peer groups, adoption networks. Prospects seek metrics that matter and relevant use cases.
  2. Consumerization of IT. With increased social media penetration, success in consumer grade products highlight the potential for enterprise adoption. However, most enterprise class products remain one to two generations behind in achieving similar capabilities. As business users gravitate towards simple, scalable, and sexy attributes; IT departments seek to rein in shadow IT efforts with safety, security, and sustainability requirements.
  3. Marketing mayhem. Fast paced markets always generate hype in marketing messages. Hence, legacy collaboration, community platform, CRM, unified communications, integration platform, and office productivity vendors seek to reposition themselves and address the emerging and trendy social business use cases customers seek.

Social Business Vendors Converge Towards Business Value Sweet Spot

The vendor landscape for social business market represents a diverse and broad collection of solutions.  Vendors approach the market from multiple heritage points, technologies, and markets.  Four key criteria cut across two axes (see Figure 1):

  1. External facing vs internal facing.  External facing includes customers, partners, and suppliers.  Internal facing include employees and trusted networks within the corporate firewall.
  2. Platforms and infrastructure vs purpose built solutions.  Platforms and infrastructure referred to core technology solutions.  Purpose built solutions address specific applications.

Figure 1. Social Business Vendors Converge Towards Business Value Sweet Spot (Working Draft)

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Executive Profiles: Disruptive Tech Leaders In Social Business – Lyle Fong, Lithium Technologies

Welcome to an on-going series of interviews with the people behind the technologies in Social Business.  The interviews  provide insightful points of view from a customer, industry, and vendor perspective.  A full list of interviewees can be found here.

Lyle Fong, CEO & Co-Founder Lithium Technologies

Biography

Lyle Fong is the CEO & Co-Founder of Lithium Technologies, helping great companies build a brand nation and delivering the next generation of customer relationships.

Prior to starting Lithium Technologies, Lyle co-founded GX Media, where he was the CTO. He drove the development of Gamers.com, which was rated the #1 independent gaming portal by Nielsen NetRatings. Lyle was instrumental in raising a total of $15M in funding led by CMGI, negotiating multi-million dollar technology licensing deals with Dell, Sony, AltaVista, and Ziff- Davis, and spearheading the spin-off of Lithium Technologies.

The Interview

1. Tell me in 2 minutes or less why Social Computing is changing the world for your customers

Lyle Fong (LF:) Social computing is more than a communication and social media revolution and it’s more than a set of technologies. Customers expectations have fundamentally changed and they are continuing to evolve and mature. At its core social computing allows companies to rapidly react to the changes in behaviors and expectations.

We have traditionally seen two routes for companies stepping into this space. Usually organizations started with a support community platform, then went to expand outwards, connecting on Facebook. Its not long before they realize it’s not enough – they need a more comprehensive way of managing customer conversations across social networks and web site as opposed to a silo community. More recently we have seen many companies jumping into a Facebook fan page, collecting lots of fans, but soon realizing that there was a need for much deeper conversations between the company and their customers. Organizations were shouting at their customers with PR and ads. The result – organizations were pushing customers away, exactly the opposite of their intention. This time around we are breaking down the walls. You have to ask, “What happens when we treat customers as part of the company?” We are now watching our customers embrace that and create amazing results.

2. What makes social computing disruptive?

LF: Let’s dig deeper into customer behaviors and expectations.  They are not just highly connected, they are always connected.  People are spending more time online more than watching TV.  Customers participating in social media now surpasses porn as the #1 activity on the web.  This pervasive level of communication through Twitter followers and Facebook friends, means that customers have unparalleled access to information, and they trust each others opinions, not that of the company.  So, how do we engage them?  This topic is beyond technology and beyond social computing.

Our customers are basically disrupting their own businesses, re-engineering themselves with new business models.  One of them has 30,000 employees and are figuring out any way to disrupt themselves as they don’t get disrupted by up and coming and competitors.  The adoption is quick – for TomTom, they had 20,000 cases handled and $150,000 return within two weeks of launch.  Brands start by asking, “How do we build a new relationship with our customer?” We even have customers, like giffgaff/O2 in the UK, who engineered themselves to not need a call center/support team, everything is dealt with by the community, fast. 90% of questions are answered in under 5 minutes – a great outcome for a national wireless telcom!

3. What is the next big thing in Social Business software?

LF: Beyond social, brands are keen to move beyond Facebook and Twitter. Right now the technology is only a small piece of what’s needed to enable the transactions. Hence, the socialnomics quote  “The ROI of social is that your business will still be around in 5 years” — is becoming more valid. The next wave of innovations, case studies, and stories will showcase organizations making strategic transformative moves hand in hand with their best and most passionate customers. This whole move will be all around the social customer. We have many stories to share – The Home Depot, Best Buy, Verizon, AT&T, – we just launched Skype across 8 languages – Sephora tells us their superfans spend 10X more then regular customers – the list goes on.  Seeing more and more companies achieve this goal is what’s inspiring!

We see a lot of failures coming from those providers that address social customer solutions with a technology.   They don’t realize that the motivation for an internal employee is far different than what motivates a customer.  For example, who has the most capability for damaging your brand on the social web?   You better hope it’s not your employees.  Moving forward, brands must work with business partners that truly understand how to embrace and reward the social customer.

4. What are you doing that’s disruptive for Social Computing?

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Research Report: How The Five Pillars Of Consumer Tech Influence Enterprise Innovation

Most Enterprise Software Vendors Fail To Deliver Innovation

Despite hundreds of billions wasted on failed research and development projects, most market influencers would agree that enterprise software vendors have produced a dearth of innovation over the past decade.  Vendors often cite UI re-skins, major functionality additions, integration of acquisitions, technology re-platforms, and weak attempts at faking cloud computing as innovations.  In fact, let’s call it what it is.  Only a handful of enterprise software vendors have truly innovated.   Many enterprise software vendors are fast followers.  Most are innovation laggards living off fat maintenance revenue streams.  Ask any product strategist where they gain their inspiration and they will all cite advancements in consumer technology; and not peer enterprise competitors.

Innovative Enterprises Push Forward Mostly On Their Own

During this year’s Information Week 500 event, conversations with over 50 leading business technology leaders highlighted the growing gap in innovation.  These next gen leaders demonstrated how they were turning to consumer tech advancements to influence their custom development efforts; and/or seeking emerging vendors with innovative offerings.

For example, Bill Martin, the CIO of Royal Caribbean showed how design thinking coupled with real-time analytics and on-board mobility could improve the cruise experience on the largest ship ever built.  Shawn Kleim, Director of Development at WetSeal, provided proof points on mobility and social convergence in driving retail sales and eCommerce in the highly competitive teen apparel market.  Dave Bent, Senior VP of eBusiness services and CIO of United Stationers, proved how a company could deliver cloud services to partners and create competitive advantage across a value chain.

A number of CIO’s showcased how they were taking advantage of the cloud with SaaS apps and private clouds. Others discussed their efforts to optimize costs using third party maintenance to pay for innovation.  The common lessons learned – most did not expect to gain market advantage from their existing and legacy vendors.  Innovations came from the consumer tech side and next generation solution providers.  Consumer tech advancements influenced business driven technology advancements.

Software And Tech Vendors Rush To Incorporate The Five Pillars Of Consumer Tech

Ten elements drive key design points for next generation apps.  These design points showcase how advancements in consumer tech now permeate the enterprise.  Design thinking concepts drive dynamic user experiences, business process focus, and community connectedness.  Based on existing research, deep dives into major vendor road maps, and validation with clients, five pillars of consumer tech have emerged as the foundation for future inspiration in the enterprise (see Figure 1):

Figure 1.  Five Pillars Of Consumer Tech Will Influence Enterprise Software Throughout The Next Decade

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News Analysis: Lithium’s Acquisition of Scout Labs Ups The Ante in Social CRM

Social Media Monitoring Addition Adds Social Customer Insight To Lithium’s Community and Social CRM Offerings

Lithium, a social CRM (SCRM) and community platform vendor announced today it had acquired Scout Labs, a social media monitoring (SMM) provider.  According to a variety of sources, the estimated purchase price for the deal ranged between 20 and 25 million.  Conversations with Emeryville, CA, based Lithium over the past week highlight the importance of two themes:

  • Actionable insight as a foundation for SCRM. As Scout Labs CEO, Jennifer Zesut, mentioned in her blog post, this acquisition is about having the right level of data for organizations to make decisions.  Social media monitoring enables Lithium to engage customers beyond the community platform and into other conversations happening in social communities.  A community platform and Social CRM offering brings life and relevance to Scout Labs’ technologies.

    Point of View (POV):
    Scout Labs adds both a strong analytical platform and easy to use visualization tools to Lithium’s extensive SCRM offerings.  Lithium now has the capability to tie SMM to its customer community apps and SCRM suite which enables the foundation of social CRM –  social customer insights or F1. Should the post-merger integration be successful, Lithium’s customers can integrate Scout Labs SMM tools to monitor, map, and measure online channels to bring social conversations and interactions back into the community platform.
  • Acquisition synergies beyond technology fit. Lithium intends to not only integrate Scout Labs into the platform, but also leave ScoutLabs as a stand-alone solution.  With over 500 customers in the mix, Lithium brings organizations such as AT&T, Barnes and Noble, Best Buy, Lenovo, PayPal, RIM, Sony, and Univision to the mix. Scout Labs brings CocaCola, Disney, McDonald’s and Motorola.  Both vendors delivered SaaS based solutions.

    POV:
    The acquisition provides both a technology and a significant customer acquisition play.  Lithium now has the opportunity to cross-sell its solutions into the Scout Labs customer base.  However, the more likely scenario will be up-selling Scout Labs back into the Lithium base.  Features such as BuzzTracking, Conversation Digest, Persistent Searches, and Rants and Rave often top the list of favorites among customers and prospects.  More importantly, the Scout Labs sales force and sales management will add a relationship based approach to the sales culture.

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Event Report: Salesforce.com Pushes Social CRM Technology — But Don’t Expect Companies To Be Successful With Tools Alone

This post was co-written with Jeremiah Owyang, Partner and Colleague at Altimeter Group

Mark Benioff and Jason from TwitterWonder what your high school mascot guy did when he grew up? He went to enterprise software.Salesforce Demo AreaMarc Benioff of SalesForce

Service Cloud 2 Answers IntegrationService Cloud 2 InStranet Knowledge IntegrationService Cloud 2 Google IntegrationService Cloud 2 Twitter Integration

Above: Pictures from Salesforce’s event

Salesforce.com launches a new set of social apps that make CRM connected to the social web. So what does it mean?

Salesforce.com’s Twitter integration and application launch helps brands monitor what’s being said. Yet despite the fanfare, the application lacks a pre-determined way to identify the profiles of Twitter profiles and primary keys within the CRM database. Secondly, the system doesn’t provide a default setting to prioritize the influence (such as more followers) vs a profile with few followers -limiting the ability for brands to prioritize their support offerings.

Salesforce.com’s “Answers” product is a threat to community platforms that offer support-heavy features. Vendors like Lithium (although a SF partner) Jive, Telligent, Awareness, and Mzinga are impacted. Brands that have a strong Salesforce.com implementation will first look to their CRM vendor for social support offerings -reducing the pipeline for community platform new comers. The newly minted “Knowledge” product, which harvests the IP from customer service reps, and customers themselves is also a direct threat to wiki creators such as SocialText, Atlasian. Those vendors should quickly bolster their marketing efforts to demonstrate how they are differentiated. Client server based contact center products such as Amdocs, Cisco, and Genesys, will face increased competition as business users choose to move to platforms that deliver provide greater social aspects tied to user generated content.

Despite Salesforce.com’s technical announcement, this doesn’t mean success for their customers. Technology is only 20% of any enterprise change, the other 80% is culture, process, roles, and strategy change -key requirements that Salesforce.com is not equipped to provide. As a result, don’t expect customers that don’t have the right program in place to take advantage of these technology offerings -instead expect vendors with a heavy professional service offering to empower a company to truly embrace customers in the social web.

Overall, Salesforce.com is above and beyond other CRM vendors in terms of connecting to the social web. Yet despite their ability to connect with new channels, they lack a full solution to empower brands to make the cultural changes within their organizations. Expect other CRM vendors such as Oracle’s Social CRM offerings and Microsoft Dynamics CRM to do a “me too” in coming months as others jump on the social CRM bandwagon.

For the CIO: Ray’s Take: The coming wave of social CRM initiatives and cloud based service solutions require CIO’s to rethink about their overall apps strategies to support hybrid deployment options. Rapid proliferation of SaaS solutions inside the organization requires strong CIO leadership in coordinating data, business process, and meta data integration strategies. Moreover, now will be the time to begin master data management activities that will support social CRM initiatives and resolve profile identification and entity resolution issues. Take control now or lose control forever.

For the CMO: Jeremiah’s Take: Marketing has spread beyond awareness and lead generation -support IS marketing. Yet to be successful, your internal processes must quickly meld PR and support to provide a seamless experience to the customer. Be proactive, not reactive: Use brand monitoring technologies to head off issues before they volcano into PR disasters.

Your POV

Ready to put your service strategy to the test with Salesforce.com’s Answers product or another social CRM tool? Where are you today in your efforts?  Post your comment here or reach me direct at r at altimetergroup dot com or r at softwareinsider dot org.

Copyright © 2009 R Wang. All rights reserved.