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A New Gartner Report Announces Three Positive Ratings
The big winners were Best Software's SalesLogix, Onyx Software, and Salesforce.com.
Posted Feb 18, 2004
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Of 17 CRM vendors sized up in Gartner's "2004 CRM MarketScope for Midsize Enterprises" (MSEs), only three walked away with a "positive" rating. The big winners, based on the report released this week, were Best Software's SalesLogix, Onyx Software, and Salesforce.com. According to the report's rating framework, a positive rating implies that the company "demonstrates strength in specific areas, but is largely opportunistic." It assumes that customers of the vendor will continue incremental investments, and that potential customers will place the company on a shortlist of tactical alternatives. The report asserts that Pivotal, Siebel, and Microsoft--all of which received a "promising" rating--are also in a prime position to meet MSE CRM software-suite requirements this year. The overall outlook for MSEs investing in CRM software is positive, according to Wendy Close, a Gartner CRM research director and author of the report. There is "overwhelming proof of the benefits of CRM initiatives among MSEs," she says. "However, CRM vendor viability will remain a critical consideration, because it is likely that more than 50 percent of the vendors in this market will be acquired, merge, or go out of business by 2005. Key to this is the entrance of Microsoft at the low end of the market and movement downstream from the large enterprise vendors (such as Siebel Systems, SAP, Oracle, and PeopleSoft)." Close reports that Microsoft CRM is gaining momentum among Microsoft-centric MSEs that have never used CRM or sales automation software. She notes the likelihood that Microsoft will appeal to large enterprises with 250 to 500 CRM users by 2006, rather than the present target of 15 to 150 users. "It also has brand recognition," she says, "and many MSEs would feel more comfortable with [Microsoft] because they are already familiar with its technology." Some of Close's additional findings included the rising affordability of MSE CRM solutions, particularly ASPs. Many of them, she says, can now get started for less than $1,000 to $2,500 per user. Interestingly, ASP solutions also achieved the highest scores on the customer satisfaction survey administered. "They are outpacing competitors in terms of customer service," Close says, primarily because they are easy to upgrade, often launch three or four releases a year, and have proactive usability. Their ease of deployment is also a leading factor in maintaining satisfaction--customers cited an average of 47 days to deploy ASP Salesforce.com, while Siebel, Microsoft, and SalesLogix averaged a 70-day deployment.
The report speculates that Onyx will remain independent by 2005; that Best Software will experience a slow revenue growth in 2004 due to the impact of Microsoft CRM; and that CDC's acquisition of Pivotal will not relieve the increasing competitive pressure it is expected to receive beyond 2005.
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