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CRM Tops SMBs' Wish Lists
Overall, SMBs are expected to increase their technology spending this year 6.6 percent over last year.
Posted Apr 29, 2004
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What is in the hearts and on the minds of SMB decision-makers? This is the question driving Forrester Research's recent report, "The State of IT in the SMB Market." Forrester polled 1,002 SMBs, ranging in size from six to 1,000 employees, in North America. Overall, SMBs are expected to increase their technology spending this year 6.6 percent over last year, compared to only a 1.7 percent increase among large companies. "Twenty-six percent of SMBs will purchase CRM software during the next year. This is on top of the 50 percent of medium-size businesses that have developed, or are developing, a centralized data warehouse. Demand for ERP and procurement software lags the demand for customer-facing apps, but Microsoft and Oracle look poised to benefit from what demand there is," Meredith Child, a Forrester analyst who wrote the report, states in it. "We asked the 26 percent which brands they are considering the most, and Microsoft was the most popular with 55 percent considering [a Microsoft solution]," Child told CRM magazine. "Interestingly, we broke down the data to see who they are. Out of the 55 percent that are looking to buy Microsoft, 68 percent are in south central U.S." she says, although she couldn't elaborate as to why there is such a large concentration of Microsoft mindshare in this region. Of the 233 respondents to the survey question covering companies that SMBs are mostly considering, Microsoft was first choice with 55 percent, in-house solutions landed in second place with 26 percent, Siebel took third with 23 percent, Salesforce.com placed fourth with 19 percent, FrontRange Solutions garnered the number-five spot with 15 percent, and Best Software followed in sixth place with 13 percent. Of the 26 percent looking to purchase CRM software, 50 percent of respondents are at least piloting central data warehousing tools. "So there seems to be quite a bit of demand for customer-centric data," Child says. Thirty-seven percent of SMBs are either rolling out/piloting or in production/upgrading SFA solutions, and 28 percent have done so with marketing automation solutions. Seventeen percent of SMBs are considering SFA, whereas 24 percent are considering marketing automation solutions. The report also stated: "Despite their size SMBs have their own challenges with structured and unstructured data. As a result, one third will buy business intelligence software this year, and another 30 percent expect to buy content management software--led by business services providers. Microsoft dominates mindshare among SMBs, but in both categories SMBs listed a host of niche vendors, indicating fragmentation in these markets. Software infrastructure, such as portal servers and EAI, is still looking for traction; only 13 percent of SMBs have these technologies in production."
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