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Pivotal Plants Mid-Market Flag
Posted Apr 10, 2002
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staking out the midmarket, CRM software vendor Pivotal released findings from a Pivotal-sponsored study on mid-market companies' buying habits. And the key finding -- not surprisingly -- is that Pivotal's technology and pricing scheme is well-suited for the space. The midmarket, defined in the study as companies or business units with revenues ranging from $100 million to $3 billion, "tends to scrutinize IT purchases," says Pivotal CFO Divesh Sisodraker. "There's less room for error and more need to mitigate risk." The study found that 80 percent of mid-sized companies claim large CRM packages are too expensive, time-consuming and difficult to implement. A whopping 96 percent of respondents said it would buy CRM software that was the 'right technology fit' rather than buying on brand recognition or vendor size alone. And perhaps the most damning finding: Sixty-eight percent believe large enterprise CRM software from leaders such as Siebel, Oracle and SAP have more features than mid-market companies really need. The proof is in the custom-coding, says Sisodraker. He explains that Pivotal software offers only 50 to 80 percent functionality out of the box, whereas Siebel claims up to 90 percent. This means Pivotal customers can add and customize functions that they really need and not be forced to use built-in features. "It's inherently more expensive to take features out than to build them in," says Sisodraker. All of this leads to Sisodraker's second point that his software is cheaper. While software licenses among CRM vendors are roughly the same, implementation can drive up costs considerably. "On average, a dollar spent on a Pivotal license means another $1 to $2 on implementation," says Sisodraker. "If you're purchasing Siebel, though, for every licensing dollar, there's $4 to $7 dollars in implementation." Sisodraker's comments are the latest attack in a growing war to capture midmarket customers, which has emerged as the hottest CRM segment, with multiple vendors jockeying for position. But the Pivotal-sponsored study did not draw return fire from other CRM vendors. Siebel, which has a midmarket edition of its solution, declined to comment in time for this story; and summing up Oracle's response, a spokesperson simply pointed to the source of the information.
Tom Kaneshige also writes for Line56.com
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