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Of 17 CRM vendors reviewed in Gartner's "2004 CRM MarketScope for Midsize Enterprises" (MSEs), only three walked away with a "positive" rating: 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 states that Pivotal, Siebel Systems, and Microsoft--all of which received a "promising" rating--are also in a prime position to meet MSE CRM software-suite requirements this year.

Approximately 43 percent of small- and midsize-business executives participating in a Yankee Group study admitted to a fear of becoming heavily dependent on Microsoft's products and services. Within that group, 72 percent of those polled indicated that they are actively seeking other vendors to diversify their portfolios. Helen Chan, Yankee Group SMB strategies senior analyst, says that as vendors like SAP, Oracle, Siebel Systems, and IBM aggressively move down-market, these smaller businesses will soon have lots of options for CRM solutions and beyond. "The marketplace is getting a lot noisier and more competitive than it ever has been," Chan says. "All of the new technologies available are making CRM much more than what it used to be, extending it out of just CRM and into other areas."

The business process management (BPM) sector grew in license revenue by about 15 percent in 2003, totaling nearly $540 million, according to research from Gartner's Dataquest. Dataquest estimates that combined license, maintenance, services, and training revenue exceeded $1.2 billion in 2003, and predicts that the BPM market will see moderate double-digit growth, to $598 million through 2007.

Eighty-nine percent of companies that have moved IT, business processes, and contact center work offshore reported that they are satisfied with their offshore initiatives, according to research by Baruch College's Weissman Center for International Business and The Paaras Group. However, many challenges abound: Knowledge transfer and internal commitment were identified as the major challenges in launching offshore initiatives, which companies said need to be addressed early on to ensure success. Companies cited cost savings as the main goal of offshore outsourcing, followed by accessing skilled resources and improving quality.

In Gartner's recent magic quadrant ranking CRM customer service and support (CSS) vendors, Siebel Systems stood alone in the Leader quadrant. Amdoc's Clarify CRM suite is the sole Challenger, while E.piphany and PeopleSoft's CSS suites were placed in the Visionary quadrant. The Niche quadrant includes SAP AG, Oracle, Chordiant Software, and Onyx Software. One important takeaway from the analysis of the CSS market, according to Gartner analyst Michael Maoz, is that through 2005, 70 percent of large enterprises will use a minimum of three vendors to create an enterprise CSS environment, whereas 80 percent of small and midsize businesses will prefer suites or single-vendor solutions.

Additional reporting by Emmy Favilla

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