Business Issues -> Employment
By: Gerry Brown, Analyst - Digital Marketing & CRM, Bloor Research (Moved)
Published: 25th October 2010
Copyright Bloor Research © 2010
Last week I looked at the effect of open source and new agile vendors such as Qliktech on the BI market in the article ‘Is the Traditional BI in decline?’. Is the CRM market similar or different?
As with the BI industry, the heavy boot prints of the large enterprise applications vendors, SAP, Oracle, and Microsoft are all over the CRM industry. Also similar to the BI market, most of the CRM old stagers are still hanging in there, many albeit under new ownership e.g. CDC (Pivotal) Sage (Saleslogix), Pegasystems (Chordiant), Consona (Onyx). The CRM market during the last decade has been a roller-coaster with many vendor casualties, whereas the BI market has grown in a more linear fashion.
The most successful CRM vendor in recent times has been salesforce.com which now has $1.3Bn in revenue, 4,500 employees, and has grown its revenues in the $250–$300m range for each of the last 3 years. Salesforce loves to spend money (c. 50% of its revenues) on sales and marketing, especially for its mega Cloudforce conferences that provide the speaking platform for its charismatic and outspoken CEO, Marc Benioff.
Salesforce is great for the CRM SaaS market and its cousin the open source CRM market in ‘taking on’ the rhetoric of the enterprise vendors. One vendor described Benioff as a ‘lightening rod’ for attracting media attention: “we just enjoy being in the salesforce.com slipstream”.
Unlike BI, where there are relatively few open source vendors, in CRM applications there are at least 60 open source CRM packages regularly downloaded from Sourceforge. The crown prince of the market is SugarCRM.
SugarCRM, like Qliktech in the BI market, is growing revenues at over 50% per annum. It claims 7 million downloads and serves 600,000 end users. 6,000 customers have the ‘paid for’ SugarCRM Professional or Enterprise editions. The Professional edition starts at only $30 per user per month on an annual subscription contract. The new version SugarCRM 6 incorporates an intuitive interface, social CRM and search functions that keep it pretty much in touch with the product developments of the mega vendors.
SugarCRM is a low cost alternative to salesforce.com, Microsoft and Sage for Sales Force Automation (SFA). In addition SugarCRM offers some basic call centre support features and marketing functions such as campaign management. A key strategic question for CRM suppliers is whether to stay focused on the triumvirate of Sales / Marketing / and Customer Support applications? Few, if any, vendors do all 3 of these applications brilliantly today.
The alternative is to branch out wider into integrated Accounting and eCommerce as a SaaS-based small business suite, as Netsuite or up-and-coming UK vendor Brightpearl do. The latter offers the Brightpearl CRM / Accounting / Time Management suite all for just £20 per user per month.
In summary, the CRM market is still growing nicely and is now well out of its early adolescent growing pains. Some segments of the market, such as SFA and marketing campaign management, are starting to look increasingly commodity in nature, as tumbling prices and the many SaaS and open source alternatives are testament. Customers should choose vendors with strong strategies, and who are willing to continuously innovate in products and their own business models in order to remain competitive. Salesforce.com has shown remarkable agility and foresight in this regard to date.
Always a good sign is when the venture capital (VC) community is prepared to sign the cheques. To date, SugarCRM has raised $46 million in VC funding and an IPO in the future seems likely. So maybe the CRM market looks like a pretty good place to be after all.
Posted: 25th October 2010 | By Rick Stein :
I too like free options, and wanted to suggest FreeCRM.com for your readers as well.
Since there's no IT involved, FreeCRM.com is much easier to implement, and yes, it's free.
Posted: 25th October 2010 | By Gil Allouche :
Interesting article and to the point. Although not an open-source package, I invite you to evaluate TIBCO Silver Spotfire. Free for one year (hosting included) evaluation of TIBCO Silver Spotfire -- a visual analytics platform on the cloud.
Create, Publish and Share dashboards on the cloud within minutes. No IT. No Hassle.
Posted: 25th October 2010 | By Gerry Brown :
I know TIBCO Spotfire pretty well - not really CRM though, more BI and visualisation in my book . . . or is this a dig at the Spotfire advertising on this site I wonder? ;-)
Posted: 26th October 2010 | By Mike Daly :
SugarCRM is certainly gaining momentum mainly in the small and medium sized organisation. Salesforce.com constantly innovates and the change to a business "Facebook" style of user interface will aid collaborative working in medium and large sized organisations i.e. it much easier to see who is active in any sales and/or service project/initiative and what they are up to.
In all cases integration with other enterprise apps is a critical success factor and often understated (even ignored) by the vendor. You need to understand your problems, opportunities and business goals/requirements before evaluating CRM options.
Posted: 27th October 2010 | By David :
Another newcomer in the CRM market:
WORKetc is a mixed CRM, PM, and billing application. It combines the three to make it effectively useful as an entire business management system, but this helps all three aspects individually just as much. This way you don't have to deal with integration issues, high fees, and training multiple software to employees or temps. Think establishing someone as a lead, securing them as a client, creating your project (and collaborating on it) for them, then billing them when you're done, all through the same software.
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