For midmarket companies with revenue between $100 million and $1 billion, there are many choices and plenty of deployment options. The recession has accelerated the movement toward software-as-a-service (SaaS), especially for divisions of larger companies that do not want to blindly go along with an already installed solution from SAP or Oracle's Siebel, says Chris Fletcher, research director at AMR Research. The names on ourleaderboard may be the same as last year's set, but now there's a bit more distance between them. Last year only a tenth of a point separated all four leaders; that's now widened to seventeenths of a point. "This is not a homogenous market by any means," insists Laurie McCabe, partner at Hurwitz & Associates.
Microsoft stayed strong in the midmarket space with Dynamics CRM.While its company direction and customer satisfaction scores each dropped a quarter of a point-from 4 to 3.75-this year's scores were still second-highest. Some observers noted (and Microsoft repeatedly boasted) that having both Dynamics CRM 4.0 and the on-demand Dynamics CRM Online edition provides the flexibility that midmarket companies desire. Where the company continues to lag is in depth of functionality: Its score of 3.25 is a quarter-point higher than last year, but still second-to-last among the leaders. "Compared to some of the others, it's about average, "McCabe says. "Every year, every company adds things-but I don't see Microsoft leapfrogging."
Oracle's strength remains depth of functionality, where its 3.75 tied for second-highest. "The company's heritage will still [result in] high marks for functionality," explains Tim Hickernell, lead analyst for Info-Tech Research Group. Relying on acquisitions is both a blessing and curse: Oracle's company direction score of 3.5, while respectable, marked a 0.3-point drop and was second-lowest among the leaders. Analysts see most of Oracle's midmarket customers at the very high end of the spectrum, almost akin to crumbs falling off the enterprise-level table. "Oracle is a big gun, and its marketing money goes into the large enterprise because that's its thing,"Hickernell says.
RightNow Technologies is consistent: This is its fifth consecutive year on the midmarket leaderboard. Known for customer service, its 3.75 score for functionality-a quarter-point rise from 2008-reflects its innate strengths and new integrations with enterprise analytics (Birst) and social media, but little has been heard about the sales portion of its offering. "RightNow is very strong in terms of technology and delivering value in the customer self-service space," explains Rebecca Wettemann, vice president at Nucleus Research."What it's never successfully been able to do is leverage that into other areas of CRM. I'm not sure at this point the company has a desire to do that."
The recession has sent layoffs trickling down to the Sage North America division, but the analyst community agrees Sage still has a solid product-or products, to be precise: The company's added to its lineup of Act! by Sage, SageCRM, and Sage SalesLogix a Sage SalesLogix Today appliance for hosted solutions. The problem, which respondents say Chief Executive Officer Sue Swenson has yet to solve, remains marketing and messaging, reflected in a company direction score of 3.13, lowest among the leaders."Swenson has a good vision, discipline, and strong direction for the company," McCabe insists. "[But] there are so many moving parts at Sage, and I don't know if it's going to be enough at this stage. "Even more troubling? MIS Group, Sage's highest-revenue reseller in North America the last two years, shuttered in July with barely a whisper to Sage or its customers, giving Microsoft and others a golden opportunity to poach stranded users.
Strong scores across the board led Salesforce.com to its fourth consecutive win-no other vendor rated a 4 or higher in all three categories. Wettemann says she sees huge improvement in its functionality, resulting in a 4, a quarter-point higher than last year and tops among all leaders. "Nowhere else in the CRM vendor space do we see a vendor start in one camp and effectively move to another-marketing or customer service-because the tribes are so very different," she says.And AMR's Fletcher says the jury's still out on the Service Cloud. "It's not clear to me the acquisition [of InStranet] totally translates to the Force.com platform yet," he says. -Christopher Musico
One to Watch - Midmarket Suite CRM
When NetSuite fell from 2007's leaderboard to the 2008 One to Watch slot, a drop in customer satisfaction scores-from 3.8 to3.0-was the culprit. We noted the company was working hard to fix the issue-and this year's rebound to 3.75 indicates success. Where it fell short this time was in depth of functionality (2.75). The midmarket space is demanding increasingly robust functionality, respondents say, and NetSuite's hope to displace Sage as the solution of choice for the upwardly mobile midmarket buyer hinges on improvements to its CRM-specific capabilities and its organization-wide appeal. "Demand usually comes through the [enterprise resource planning] side," Hickernell says. "That's good for [NetSuite] to have...but it's not standing out from a CRM perspective today."
CLICK HERE to view PDF of 2009 Market Leaders comparison chart.