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CRM Market: Classic Consolidation
Meta Group rates the suite vendors; a few application domains show signs of maturity; presence and performance
Posted Jul 22, 2002
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After undergoing a frenzied growth spurt, the customer relationship management (CRM) market is finally maturing and entering into a consolidation phase, according to a new report from Meta Group. On the upside, CRM platforms will continue to be critical business priorities and, as a result, the CRM market is expected to grow up to 25 percent this year. Meta Group rated a host of CRM vendors, from Siebel and PeopleSoft to Pivotal and Chordiant. "We developed a market model of what it takes for a software vendor to be successful in the CRM space," says Steve Bonadio, senior program director at Meta Group and author of the report. "This codified our knowledge and thinking about the relative positioning of this space." For vendor presence, Meta Group evaluated companies' strategy, reputation, geographic coverage, and business drivers, among other factors. Not surprisingly, Siebel emerged as the clear winner in this category, scoring 77 out of 100 points. PeopleSoft (59), E.piphany (56), SAP (52) and Onyx (52) made up the second group. Along the performance front, however, scores were significantly lower. Performance factors included technology and services, pricing, agility, financials, execution, and personnel. Siebel (68) again took top billing, followed closely by PeopleSoft (63). Nearest rivals SAP (47) and E.piphany (47) still have a way to go, judging from their scores. As the market matures and as vendors brace for Microsoft's entrance in the mid-market, consolidation looms, says Bonadio. Look for top CRM and CTI (computer-telephony integration) vendors to fill out their mid-market product and services portfolio through acquisitions. Maturation is also happening with technology. Major CRM subdivisions such as marketing automation, sales-force automation and content management software are becoming easier to implement and manage. On the other hand, PRM and incentive management are in the early-adopter phase. While Siebel is still the "800-pound gorilla," says Bonadio, ERP vendors are on its heels. And in the long run, pure play CRM vendors must make some decisive moves. According to Bonadio, a business lifecycle consists of four stages: engagement, transaction, fulfillment and customer service. ERP vendors offer transaction and fulfillment, and are now looking for CRM to handle engagement and customer service. This means pure-play CRM vendors must acquire, partner or champion integration technologies to offer the other pieces of the puzzle, Bonadio says.
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