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No clear hosted market leader, says Forrester

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14th Feb 2005
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No one hosted applications vendor has staked a convincing claim to lead the emerging market sector, according to new rankings from analyst firm Forrester.

Forrester rated a number of providers on roughly 150 criteria across nine categories, including capabilities and ease-of-use for system administrators, managers, and sales staff, as well as cost and corporate strength. No single firm dominated, although established providers tended to score better on functionality, while newcomers offered some pricing advantages.

Significantly no single vendor has established a dominant set of capabilities that can be said to be a market benchmark for others. Newer players have chosen to focus primarily on English-language users to capitalise on the large audience of small and medium enterprise in Australia, North America, and the UK, whle the likes of Siebel, and Salesforce.com have all adopted at least some foreign language support.

Forrester notes that some on-demand players have chosen to remain focused on a niche rather than attempting to compete with the expanding suites, citing Salesnet’s decision to centre on structured sales processes.

But despite there being no clear winner overall, inevitably most of the companies examined were able to claim victory of some sort. Salesforce.com pointed out that it had topped four out of the seven categories, while NetSuite said it had outscored rivals in the categories of sales management and breadth of offering.

"We're delighted to receive these leading marks in Forrester Research's in-depth study of hosted SFA software," said Zach Nelson, CEO of NetSuite. "While NetSuite provides much broader functionality than stand-alone SFA vendors, our leadership in sales management, dashboards, forecasting and opportunity management prove that the best-of-breed SFA application is an integrated suite."

Siebel - somewhat later to the hosted market than many of its rivals - also claimed the Forrester findings vindicated its strategy, particularly its ability to offer hybrid deployments with Siebel on-premise solutions a major advantage for existing on-premise customers.

"After only one year, we have established ourselves as a leader in hosted CRM and we're just getting started," said Bruce Cleveland, Senior Vice President and General Manager, OnDemand and SMB, Siebel Systems. "We are the only company that can deliver a complete and smart solution designed to meet the sales, marketing and service requirements of any customer, regardless of size or complexity."

According to Forrester Analyst Liz Herbert, "Siebel has made impressive strides in its first year on the market to create an enterprise-class product. Besides its vast resources, Siebel's biggest advantage in this market is its breadth and depth of vertical expertise... Additionally, the vendor's January 2005 release provides enterprise-caliber setup and customization tools, including sophisticated user management, strong access controls like field-level security, and a sales process coach."

Forrester concludes that Siebel needs to do a better job of marketing itself as not just a high-cost CRM vendor but as an SME-friendly player.

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