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Is CRM Contracting or Expanding?
A case can be made that the CRM market is contracting, but to focus on that trend is to miss a quiet expansion that is also occurring within the CRM world.
For the rest of the February 2004 issue of CRM magazine please click here
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During the fourth quarter of 2003 I spoke at four CRM-related conferences, and at each of these sessions I was struck by how small the events were. Back in the late 1990s CRM conferences took up the better part of the major convention centers in Boston, Chicago, Los Angeles, New York, San Francisco, and Toronto, with 200-plus vendors packing exhibit halls. Today the shows are a fraction of that size. In discussing this with the coordinator of one of the events, his comment was this: "Well, this is just what happens when markets mature--you get a lot of vendor consolidation and fewer major product announcements are made." Clearly vendor consolidation is occurring among the first generation CRM vendors. What started a few years ago with such firms as Aurum, Clarify, Janna, SalesLogix, and Vantive being acquired continued in 2003 with PeopleSoft buying JD Edwards, Siebel buying Upshot, and Pivotal's planned merger with Chinadotcom through its software unit, CDC Software. So a case can be made that the CRM market is contracting and soon there will be just a handful of players. But to focus on that trend is to miss a quiet expansion that is also occurring within the CRM world. While the old-timers in the CRM marketplace are shrinking in number, there is a surprising number of players gaining traction in new areas of CRM. In the past four months alone I have reviewed more than 26 business plans for up-and-coming players entering or planning to enter the market. Instead of focusing on the same functions that all the current systems have, these firms are looking for what is missing, developing tools that can easily integrate into an existing CRM framework, and offering new capabilities. An area of particular interest is firms focusing on sales knowledge management. These would include Convoq, Involve Technology, One Source, and Ventaso. These firms are focusing on helping sales teams get access to the insight they need to sell--insight that is not included in datasheets. I can best describe it as tribal wisdom. These firms help you find that knowledge or direct you to the person who has it.
Another emerging category generating interest is sales networking. Some of the players here are Contact Networking, Linked In, and Spoke. Their systems help people find who knows whom within their sales ecosystem to leverage the relationships others have to get introductions to potential clients, to close deals, or to create new alliances. Some companies appear to be reinventing themselves to take advantage of technology innovations. MobilePoint and Proscape have jumped onto the Tablet PC bandwagon, and have built interactive selling systems that reps can use for needs analysis, configuration, and proposal generation, all while meeting face-to-face with customers. There are dozens more firms that are all quietly building customer bases and generating ROI far beyond what we have seen in the traditional CRM marketplace to date. So for those who say the big ride for CRM is over, you may want to hold judgment. We may well find that at the end of 2004 the CRM marketplace has noticeably expanded, and a new wave of interest has been created. Jim Dickie is a partner with CSO Insights, a Boulder, CO--based research firm that benchmarks how companies are leveraging technology to optimize sales, marketing, and support. Contact him at jim.dickie@csoinsights.com
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