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CRM Turf Wars
CRM suite vendors are biting and clawing for sales in untapped international markets.
Posted May 2, 2002
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CRM suite vendors are biting and clawing for sales in untapped international markets. The territorial sniping has become so fierce that Germany-based SAP used a German court this week to block certain Siebel advertisements there. And Bill Wohl, spokesperson at SAP, says, "This will likely spill into other regions, such as the U.K."

The SAP-Siebel incident points to a global CRM market that's heating up. Meta Group expects the CRM suite market to grow at a healthy 20 percent to 25 percent this year. But the stakes are even higher. According to Meta Group, CRM application suite vendors will be providing 90 percent of the operational, analytical and collaborative capabilities required by a typical organization by 2006.

North America continues to be the sweet spot for CRM and CRM-related technologies, accounting for 62 percent of the market last year, according to London-based researcher Datamonitor. But the EMEA market is bubbling. Datamonitor predicts the EMEA will capture 38 percent (or $6 billion) of the global market in 2006, with more than half the revenues coming from the U.K, France and, of course, Germany.

Will It Play in Pretoria?

U.S. software vendors must cater to European marketing culture. And this means softening attack-style U.S. advertisements because, simply put, they don't play well in Europe. Moreover, comparative advertising is illegal in many European countries.

All of this leads to this week's SAP-Siebel spat: A German court ruled that two of Siebel's advertisement campaigns were misleading, and thus banned the ads. SAP claims one set of ads touting customer wins was strikingly similar to its own ads, in design and wording -- and even naming the same customers, such as Deutsche Telekom, IBM and Bayer. The ad concludes with a slightly competitive statement: "Siebel. The #1 CRM vendor within the SAP installed base." The second set of ads, called "The Evolution of CRM," directly compared the two vendors' CRM histories and market penetration.

Siebel willingly pulled the ads but used the ruling to take pot shots at SAP's courtroom tactics. "We find it curious that a German court would take this action without granting a hearing or discussion of the facts," said Jeff Amann, vice president and general counsel at Siebel, in a statement. "The ruling against Seibel Systems' ads is particularly surprising, given that there is no question of the factual nature of the advertising."

SAP, on the other hand, disputed Siebel's views of SAP's CRM development path. And Wohl says SAP tried to solve the advertisement issues directly with Siebel but received no response. After the successful court ruling in Germany, SAP plans to seek legal ways of stopping competitive Siebel advertisements running in other regions.

"The fact is that we are arch competitors in the CRM space around the world," says Wohl. "We've always thought of SAP as a very global company, and we've learned that doing business around the globe requires a real careful understanding of the different cultural and legal aspects of working in different regions -- and Siebel's learned quite a lesson this week about what it's like to enter the German market."

Tom Kaneshige also writes for Line56.com

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