Gang War in the New CRM Promised Land

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Cracking into corporate America has forever been looked upon as the Promised Land, representing a clear sign of acceptance for a specific application or product for many technology vendors. Every company I have had the pleasure of sitting across a conference table from loves to brag about the Fortune 500 car maker that just upgraded to its most recent product X, or the global financial services firm that just implemented solution Y. Big wins, big bragging rights, or so the thinking goes. However, my dollars to your donuts says the medium-size business market is where the excitement and opportunity lie for CRM vendors during the next two years or so. Traditionally, the medium-size business market has been an enigma to most technology companies. These customers require personal attention, accountability, custom applications, and vertical solutions. So for the most part, they have been ignored by large vendors, or force-fed wider, far-reaching and more expensive applications that never quite fit their business objectives. But the CRM industry is wising up and many vendors from Siebel to PeopleSoft to SAP to Oracle are now trying to break in to the mid-market, all infringing on the street corners owned by Upshot, FrontRange, Onyx, and even Pivotal. This turf battle is on the cusp of escalating into an all out gang war now that Microsoft, the new kid on the block with a history of being the school bully, is entering the medium-size business market. So why all the noise? Research firm AMR pegs the midsize market, along with individual departments within enterprises, as a $44.1 billion CRM opportunity during the next 10 years. Other research points to the midsize business market as being underpenetrated, but with real, dedicated budget dollars for CRM initiatives. In fact, some suggest only 10 percent of these businesses have a CRM solution. However, nearly 75 percent of all midsize companies have budgeted hard money toward CRM spending this year, according to other research. This is an attractive combination and the top executives of the leading CRM vendors know it. For one, PeopleSoft CEO Craig Conway recently told me that one of the company's main objectives in the coming year is to target this market, and he admits it's a difficult task. It takes lower cost, more customizable applications, as well as a loyal integrator army. Conway and others are talking the talk; we'll have to see if they can walk the walk. So brace yourself folks. Because with Conway, Tom Siebel, and now Microsoft's David Thacher setting their crosshairs on the medium-business space, they will make the Sharks fighting the Jets look more like a local Cub Scout gathering.
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