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Interview with Larry Ritter, Sage CRM

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13th Aug 2009
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Larry Ritter, senior vice president of product management at Sage CRM Solutions, sat down with Stuart Lauchlan in London recently to talk about Social CRM, sofware as a service, and the impact on the partner community.

 

SL: How is the CRM market treating you?

LR: CRM spending has seen a bit of a slowdown. The market will see growth in  the high single digits this year. That's partly coming from additional licences into the installed base. When companies are downsizing, you find that they don't tend to buy new licences, so revenue growth is coming from maintenance in the installed base. If you've just laid off 10% of your workforce, then you don't need any added spend. That said, the number of new customers we're seeing is about the same. Even in the downturn there are still new companies coming on board.

There is a lot of customer retention activity and a lot of focus on the customer experience so that you are keeping the customers you have and selling to people that you already know. There are changes: the buying and ownership experience is changing. People want to spread out their payments and reduce their risk, so we're seeing a lot more need for flexibility. There is a more elongated sales cycle that requires additional levels of signatures. People are asking 'are we really sure that we want to do this?'.

SL: That implies that customers may be becoming more savvy about measuring the effectiveness of their CRM?

LR: There is more experience among the customers about metrics. We are past the phase of people thinking they can buy CRM in a package and just install it. Usability in general has come a long way. If people don't use the CRM technology you've installed, then you're dead. In the case of an application, if someone is using it because they want to then that's very different. The configurability of systems is better. People are starting small and thinking big. It's very different from the days of Siebel implementations when a truckload of software used to turn up.  

We still see the traditional CRM bells and whistles, such as sales and marketing and service and support, but analytics is getting a lot more relevant. If you think about first generation CRM, you'd often feel good just because you'd managed to get it installed. Now people are more interested in things such as building unique relationships and targeted demand management, which is  sign of customers seeking more advanced benefits.

SL: What about other CRM innovations such as mobile CRM, which has been about to break into the mainstream for some time now?

LR: We think mobile is very important. Work isn't a place that you go to anymore, it's something that you do. The more you can take work with you and do it on the move the better. To a degree, that's been nipped back a bit by the downturn. But the reality remains that, increasingly, companies don't want to give their sales forces a laptop, but want them to work using a Blackberry or an iPhone. The technology has improved so much in terms of screen abilities, connectivity, battery life and so on. While we are keenly interested in the iPhone as a platform, not a lot of companies are using it as internal IT-blessed business tool.

SL: And Cloud Computing?

LR: We're offering Act and SalesLogix in an on-premises form, while SageCRM comes as that plus a Cloud version. If you look at what it takes to put an application in The Cloud, you're talking about building yourself a nice data centre, which is not necessarily for the faint of heart. We're at an interesting point now with the work that's going on in virtualisation with the likes of Amazon and Rackspace. This gives you the opportunity which you have needed to have data centre and applications experience to have. Salesforce.com is pretty good at both of these. What's interesting about, for example, Amazon is that you can virtually configure applications and lease the same compute capability that you used to need a cabinet at the end of the hall for. So, you can take SalesLogix or single tenant applications and deliver the same experience of software as a service (SaaS) but without having to rewrite my applications into a multi-tenant architecture.

SL: But isn't that akin to 'screenscraping' SaaS – not 'proper' Cloud?

LR: There are benefits to be had from single tenant instances. You can be less concerned about blowing up the system as it's your dedicated resource. Now yes, Marc Benioff would say that it's not SaaS; it's 'fake SaaS', but I really don't think that people care about that. People care about the buying experience. People care about being able to buy and pay for it the way they want to. People want an ownership experience that meets the contemporary needs of their business. That gives everyone all more opportunities. 

SL: What about the competitive landscape from the other SaaS vendors or indeed those who have SaaS ambitions.

LR: We see a lot of noise from NetSuite in terms of PR activity around 'here's a customer who used to use Sage and so on'. But in practical terms, they're not that strong. I certainly don't wake up thinking about NetSuite! As for SAP and Business ByDesign, I can't really speculate on something that they don't have!

SL: Does the concept of Social CRM have a part in Sage's strategy?

LR: We're all trying to work out far we go down the route of social networking. I think when we talk about Social CRM at the moment we're linking the words to efforts on the part of vendors to monetise an industry that might be worth millions at some point. Social networking is really all about information; using the internet to find information and using social networking techniques to let information find you. But, more than ever, it's the case that what I say about myself and a product pales in comparison to what other people say about it.

The amount of information that a vendor controls from a selling perspective is declining. As a vendor managing brand and support, you can just as easily judge what the temperature is about your company and your product just by going into the various social networking groups. The value then is that at least you know! If you don't know and everyone loves you, then you can be fat, dumpy and happy; if you don't know and they don't love you, then...

SL: Sage's dependence on the channel and its partners is surely an inhibitor to any full-scale Cloud Computing push?

LR: What we all have to come to terms with is the value that we all add. Where is the value add in The Cloud? There is value add in customisation and configuration. The channel are specialists in applications - that's where they should offer value. Most CRM sales of any consequence are not done with vanilla offerings off the shelf. We want to help the channel to make the transition to The Cloud. We want to make them comfortable with The Cloud.  Our first phase is to get the partners familiar with it. Partners can show clients how they can take their specialised demos and do their proof of concepts in The Cloud. Some of our biggest partners are really excited about doing that. What I like about our approach to The Cloud is that we're talking about the same applications, we're not really changing anything that the partners do.
 

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