Pivotal's Turning Point

At least one thing is for certain: CRM software vendor Pivotal knows where it wants to go and who it wants to serve. The Vancouver, British Columbia-based company unveiled CRM offerings tailored for investment banks, healthcare insurance firms and real estate-construction companies in the mid-enterprise space -- companies and business units with $100 million to $3 billion annual revenues. To be sure, it's unusual for a major software vendor to target such specific customers. "Most software vendors take a broad-brush approach when it comes to serving vertical markets," said Bo Manning, president and CEO of Pivotal, in a statement. "Pivotal's approach is to identify more specific, niche vertical segments that have a clear set of common needs and develop precisely-tailored offerings to give these companies a head start with their CRM initiative." Pivotal's Mid-Enterprise Investment Banking software promises to help commercial banks automate corporate finance opportunity management and increase sales and trading transaction closure rates. Pivotal Mid-Enterprise Healthcare Insurance links health insurance company employees with independent agents, employer group and members. Using the software, healthcare insurers and agents can respond to business requests in real time, claims Pivotal. Lastly, Pivotal Mid-Enterprise Real Estate-Construction lets homebuilders manage multi-channel leads and take advantage of cross-selling opportunities, among other CRM features. The thinking goes that a more tailored CRM product featuring pre-configured business rules and workflow designed for both mid-enterprise and highly specific verticals will speed deployment and cut down on customization and integration costs. Indeed, mid-enterprise companies also have different buying criteria and limited IT resources than their bigger counterparts, say industry watchers. So far, Pivotal has won praise for its efforts. "Pivotal understands what it takes for mid-enterprise companies to be successful," said Charles Irsch, vice president of information systems at Centex Homes, adding, "The company is well-positioned to meet the needs of homebuilders." Vertically focused CRM products have a real upside, "just as long as you don't go overboard," says Kelly Spang, analyst at market researcher Current Analysis. In Pivotal's case, by going after healthcare insurance instead of healthcare in general is a very narrow approach and a giant risk for the struggling company, she explains. It's a Catch-22, of sorts. Pivotal faces limited resources when compared to rivals Siebel and PeopleSoft, and thus "must focus on things that give the most bang for the buck," says Spang. On the other hand, she feels Pivotal is now pigeonholed by targeting very specific customers rather than taking the more conservative route of selling into a broader space. "Pivotal is making a big bet, and they're not in a position to gamble," Spang says. Pivotal disputes Spang's comments, and says the current strategy is just a wiser allocation of resources. "This approach is a smart, low-risk strategy for Pivotal," says Matt Duncan, vice president of marketing at Pivotal. "The cost of targeting a vast, broad vertical category is significant - Pivotal's highly focused approach means that our cost of marketing and selling is lower." Tom Kaneshige also writes for Line56.com