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The Cycle of Life Continues for CRM
Many vendors have either dropped out of the market or been acquired, but a slew of new, smaller companies with innovative solutions has stepped in to take their place.
Posted Sep 1, 2006
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The Oracles and SAPs of the world continue to garner much attention, but a lot of the innovation in CRM now is the result of work by smaller vendors. And, according to Michael Maoz, vice president of research at Gartner, many of these smaller, more nimble sellers are playing a big part in improving CRM's ability to actual improve customer satisfaction. "CRM is still trying to learn how to optimize the relationship between the customer and the company," Maoz says. This information and more will be part of Maoz's presentation, "The CRM Vendor Landscape: Sense Emerges From the Chaos," at Gartner's CRM Summit. Many of the large suite providers are struggling with innovation due to their heavy focus on integration of product lines from multiple acquisitions, and because suite products don't offer the drill-down capabilities that many companies are looking for, Maoz says. "The idea of suite CRM is dying," Maoz says. "That's one reason why we stopped doing the magic quadrant for suite CRM three years ago. One of the reasons the world is moving towards an SOA environment is because companies can integrate separate solutions from specialist companies more easily. These niche solutions offer better capabilities to improve a specific business process." CIOs like CRM suite products because they automate many of the tasks and streamline business functionality, but often the goal of making the customer happier goes unmet. "It's about cost cutting and making a department within an organization that is a customer touch point more streamlined," Maoz says. "While that is an important part of CRM, you're also looking to make the customer happy." This is a reason why many large enterprises still have huge IT departments tasked with customizing and developing their own CRM products. "They're drilling down into the specific needs that a company has," Maoz says. Maoz cites Amdocs has a perfect example of a company that has built CRM tailored for specific industry needs, first telecom and now financial services. Maoz will also cover in his presentation how smaller CRM players, such as open source provider SugarCRM, Invincible CRM, and companies like E-Glue and CommuniSpace are developing specific, service-based solutions that will help improve CRM's ability to improve customer service for businesses. Conversely, many of these smaller providers will continue to get purchased by the larger vendors. "These smaller companies act as outsourced R&D for the larger companies. Most will get purchased, but either way, they'll continue to improve CRM software's ability to move beyond cost-savings and functionality. While I don't see another Salesforce.com in this bunch," Maoz says, referring to that company's influence on the market with its on-demand offering, "these smaller vendors will continue to push the envelope."
Related articles: CRM Is Back on the Glory Road Running Out of Gas
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