CRM: State of the Nation

17th Mar 2006

One of the most interesting things to come out of the Gartner CRM Summit in London this week was the research firm's assessment of who matters and why in the CRM landscape.

Gartner made a number of very interesting observations that rang true. First up was the idea that in a consolidating marketplace - thanks Larry! - vendor viability should be a number one consideration. There are hundreds of 'cool' companies out there, but how many of them will still be around in five years time. Such cool companies are effectively the external RandD arms of the major players, such as IBM, Oracle and Microsoft. Indeed of the big 4 players highlighted by Gartner, only can be said to be an innovator!

So who are the big 4? Well, it's fairly predictable, but they're SAP, Microsoft, Oracle and Their respective strengths and weaknesses are interesting in their own rights.

SAP is identified as the market leader in terms of licences shipped, but crucially is not the leader in terms of licences actually used. In fact Gartner reckons that in a lot of cases the SAP CRM deployment is not planned until 2012 and beyond while companies struggle to complete their ERP implementations. That said, SAP will continue to lead the market according to the distinctions made above.

Microsoft is the most patient company that Gartner has encountered and as such must be considered a long term player. But it thinks in terms of ten years down the track, not short term. Microsoft is enjoying significant growth with release 3.0 of its product - which Gartner says many see as "Outlook on drugs". But it is concerned that the company's partners are holding it back simply because there are not enough who know enough about implementing the software. But overall, Microsoft has significant forward momentum.

So too does which is leading the on demand movement. The biggest weakness here is the question of support in certain parts of the world, with Africa being cited as the weakest link at the moment. That said, Gartner reckons that the number of larger users worried about downtime and availabilty concerns is down on last year, while the number of larger enterprise deployments is increasing.

The harshest criticism was reserved for Oracle. Effectively Gartner warned that Oracle's own eBusiness applications and the PeopleSoft applications were now regarded as 'end of life'products with all roads leading to Siebel. While there were no concerns that Oracle would not continue to support existing PeopleSoft customers, there is no value in new customers buying into the existing portfolio. Fusion is still being rolled out incrementally and over a long period of years, which will impact on the viabilty of buying applications from Oracle. As such, Oracle is stalled in the market - and likely to continue in that state for some time.

I find it difficult to disagree with any of that.

Click the 'Add your own comment' below to share your thoughts and opinions.

Stuart Lauchlan
News & Analysis Editor
[email protected]

Replies (4)

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By AnonymousUser
17th Mar 2006 13:38

If there are four major players and the only innovator (and smallest by market cap) is, seems to me like they are shark bait, would you not agree?

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Paul Greenberg
By Paul Greenberg
17th Mar 2006 14:08

What's interesting to me is that while I agree that the Big 4 are "the Big 4" at the moment, we shouldn't ignore the fact that the customer ecosystem (i.e. the experience economy) calls for a new model of relationship to customer - involving customer value at the core. What that means is that companies that are traditionally focused around CRM aren't necessarily the CRM leaders of the future - though of course, rightfully, financial viability is always an issue. But that said, leading forces like Google or Yahoo have something to say about how customers work with companies (its one reason for the Microsoft Live initiative) these day as do the services providers and applications developers that understand co-creation of value. In the world of IT/high tech, those CRM focused companies who might become leaders are out there in the platform space - which both and SAP are heavily vested in - and companies like Rearden Commerce are making a splash. I would neither underestimate the need for considering far less comfortable choices than Oracle, SAP, Microsoft and (they like it lower case) and at the same time recognize that SAP is making a play to be a platform leader, as is salesforce as is Microsoft and to a lesser extent, Oracle at least now. But the impact of technologies like Ajax and architectures like service oriented architecture is yet to be fully felt. What is fully felt is that the business models that the new generations of customers demand (which center value with them, not the companies, products or services) are non-negotiable, leaving the landscape less in the hands of the "Big 4" than before (with being the innovator though) and more uncertain as to who may join that Big 4. Even the Big 4 were a small 4 and non-force at some point in their existence. So while I personally agree with Gartner and Stuart per se, I think it limits the uncertainty of the Big 4's future as that Big 4. Its a lot less certain even though the replacements or additions are not clear on the horizon with the exception of possibly Google or Yahoo. These are non-traditional times with a radically different set of customer demands in a new ecosystem and the old business "logics" don't hold anymore.

Thanks for the rant space. :-)

Paul Greenberg (Author, "CRM at the Speed of Light," 3rd Edition; blog:

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By obotero
17th Mar 2006 17:28

The Big Four : Oracle, SAP, Microsoft and are great for large companies. I attended Gartner's event in London this week, and eventhough there is a lot of talk about CRM systems on Demand as being one of the best ways of getting the service in the future, I do not see anything clear for SMEs in the rest of the world. SMEs are a huge market with many restrictions. Most of the time their priorities are defined in terms of sustaining or growing their businesses, but in many cases just surviving. They need a strategy around customers as much as a large corporation. They need technology as well. But many times they do not have the resources for paying $ 50 or $ 100 per user for a system to manage their customers. It can be a lot for them. There is a good opportunity for a company that targets the SME market with a simple, practical and affordable solution.
Have a great weekend

Olga Botero (C&S Customers and Strategy, a company that supports customers who want to make their customers strategy their way to compete)

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By liz_roche2002
17th Mar 2006 20:05

If among the most interesting things to come out of Gartner's CRM Summit was that there is (still) a "big 4," and that vendor viability is a top selection criteria, then I'm not sorry I missed the event... ;-) These ideas are not new. There has been a "big 4" (remove Siebel, replace with for several years, and vendor presence (of which viability is an element) has always been crucial in the CRM space.

I would suggest that the news here is that we're seeing the continued bifurcation between those who are arguably infrastructure players that also 'happen to have' applications (this would be the big 4) and application players who focus on creating best-in-class components for 3rd party infrastructure. Note that this is the promise of composites -- sourcing components from the best place and assembling them into applications that run in the enabling environment.

Paul Greenberg hinted at what's actually way more interesting: that so far no one out there has created a way to design CRM around the customer, rather than around a particular division (e.g., sales), a technology (e.g., SFA) or a line of business (e.g., pharmaceuticals). What's missing in almost all the CRM thinking out there is THE CUSTOMER as the design point. And implementing a flexible technology environment to create customer and segment-specific CRM treatments for each customer lifecycle interaction.

Liz Roche, Customers Incorporated ([email protected])

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