The 2006 Market Leaders, Part 2

Marketing Automation


The Market
As performance and accountability continue to drive the marketing industry, marketing automation vendors work to deliver on these demands. Vendors are focusing on multichannel integration to gain a deeper understanding of the customer purchasing process and to boost ROI. Additionally, flexibility within the software's architecture to enable connection between a variety of CRM systems will become crucial, according to Bruce Beigel, senior marketing director at Winterberry Group. These changes track the trend of an increasingly metrics-centered mindset in the marketing world, says Leslie Ament, research director at Aberdeen Group. "Marketing has always been more an art than a science. This year, we're really going to see this shift to 50/50."

The Leaders
Aprimo, the pure play powerhouse, has always been a clear best in class for market resource management (MRM) functionality. However, movements the company made in the last year promise greater success in reaching all corners of marketing automation. With the acquisition of DoubleClick's Ensemble product and SmartPath unit as well as the rollout of Aprimo Marketing 7.5 in June of 2006, the company has stamped itself as an all-inclusive marketing software vendor. To progress even further, says Suresch Vittal, a senior analyst at Forrester Research, "Aprimo must prove that it has successfully bolstered its data and analytics functionality to fulfill its vision of being an enterprise market management provider."

SAP's multichannel capabilities and vertical offerings are enough to make the company leaders' circle-worthy. "Company direction is still largely unknown here," says Sheryl Kingstone, Yankee Group's CRM program manager, "but once they start really focusing on building out marketing automation, they have a great customer base to tap into." At present, Ament claims, SAP's solutions are best suited for large B2B clients. However, this year the company forged ahead with moves that promise to provide the company with a wider client base, such as acquiring Praxis Software Solutions to boost performance in e-commerce offerings and releasing the on-demand solution for SAP Marketing.

SAS Institute may be known for its strong analytics, but it's now harnessing its robust BI to create a customer intelligence product line. The company came out with on-demand versions of Veridiem MRM and SAS Solutions: Marketing Automation, a development that contributed to SAS's rise in market share from 10 percent in 2004 to 10.2 percent in 2005. In the next year the company is expected to move from larger and more expensive analytics engines to "lighter, more targeted marketing applications," says Martin Schneider, senior analyst at The 451 Group.

Siebel Systems, now in the hands of CRM giant Oracle, remains an important player in the marketing automation field. Siebel Marketing, this year released as an on-demand offering, has great strength in planning and resource management, relying on the product's strong analytics to track and report. These capabilities won Siebel the prize for most functionality overall in this year's Forrester Wave, even when the synthesis with Oracle was still very much mid-process. In the next year the market will learn more fully how this acquisition will pan out. "It remains to be seen how Fusion will change the product direction," Ament says.

The Winner
Unica once again nabbed the top spot on the marketing automation leaderboard. "Unica has stayed true to its origins of providing 'marketing for marketers,' while at the same time aggressively innovating," says Liz Roche, cofounder and managing partner at Customers Incorporated. The only vendor in marketing automation to break a rating of 3.5 in any category, Unica scored above this mark across the board in functionality, direction, and customer satisfaction. The company stayed fresh and dominant this year by snatching up MarketSoft in December and with the unveiling of Affinium NetInsight, Unica's first Web-analytics solution, grown out of technology from its March 2006 acquisition of Sane Solutions. Now concentrating largely on event-based marketing with Affinium Detect, Unica promises to continue live up to its name--in a word: unique. --Jessica Sebor

One to Watch
Teradata was listed as a One to Watch in the marketing automation industry last year. This year, companies would do well to keep on looking. The vendor, though dealing primarily in analytics, received the third highest rating in this category for customer satisfaction (3.6). The ease of use of Teradata CRM version 5.1 has brought it this far "with tools that are more intuitive for a marketing end user," Ament says. However, with the further push back of the drop date for version 6.0, which will include more expansive marketing functionality, analysts agree that Teradata must speed up its product release to move forward in the industry. --J.S.

CRM Analytics

The Market
It's no longer a question of whether to implement CRM analytics software or not--the question is which vendor to choose. And with major vendor consolidations in the past year--most notably Oracle's acquisition of Siebel--analytics apps will continue to improve. To stay competitive and innovative in this saturated space, BI vendors are now looking to increase the breadth and depth of their solutions, with special concentration on embracing data integration and data quality. "We've already seen the democratization of BI," says Jill Dyche, partner and cofounder of Baseline Consulting Group, "now it's more about the enrichment of it."

The Leaders
With a strategy of creating business intelligence applications for everyone, Business Objects has been able to develop a well-rounded product set without spreading itself too thin. This year, the analytics leader came out with EIM Global Strategies, targeted at enterprise customers, and an upgraded Crystal Visions product line for the SMB crowd, further leveraging the capabilities that came out of the company's 2003 Crystal Decisions acquisition. This year, Business Objects has expanded reporting and analytics to enhance its tool set, according to Dyche. Following the acquisition of Firstlogic this February, Dyche says, "If you ask Business Objects what's next, they're going to say data quality."

Innovation driven by simplicity makes Cognos once again a leader in the CRM analytics space. "They are a very forward looking organization," says Teresa Jones, senior research analyst with Butler Group. Last month Cognos released Cognos 8 Business Intelligence, a single streamlined product that has helped the company boost revenue, achieving a return of $217 million the first quarter of this year as compared to $200 in the same quarter of 2004. There has been recent industry buzz that IBM, a partner of Cognos, will look to make a bid for the Canadian company. While the company may seem in danger of being swallowed up, this attention paid by the software giant only highlights Cognos's solutions' leader-quality functionality.

Hyperion joins the leader's circle this year for the first time, bumping Teradata down to the One to Watch seat. The introduction of Hyperion System 9, a tool that integrates business process management into business intelligence, did much to propel Hyperion into the analytics space and erase its label as a BPM-only player. Hyperion now is riding the integration trend with products that can be embedded into desktop Microsoft platforms, and that enable data mining and change management in its BPM/BI offering.

Despite confusion over the Oracle/Siebel direction, the CRM powerhouse, which now owns the analytics superstar, is becoming a BI force to be reckoned with. Dyche sees Oracle's vision as a move toward making BI available to and usable by every desktop worker; however, she argues that Oracle needs to be clearer about how it will do this to be successful. "I think their future plans are a 'five,' but the way they've communicated them is a 'one,'" Dyche says. Following the acquisition, Oracle released its Business Intelligence Suite in March, which helped up its market share in the BI space to4.3 percent this year, and Dyche believes that this will continue to increase in 2007.

The Winner
SAS Institute knows analytics and everybody knows SAS. It once again came out as the leader of the leaders, attaining the highest marks in all categories. The company this year worked to expand its reach, dropping an on-demand offering to combat the stigma of "expensive and difficult to use," says Gareth Herschel, an analyst at Gartner. With the release of 10 vertical solutions this March, including new offerings in the telecom and manufacturing industries, SAS shows that it is continuing to play into the needs of its broad customer base. "It's a SAS world," says Bruce Beigel, senior marketing director at Winterberry Group. It is clear that until other vendors ramp up their data preparation and analysis tools, everyone else is just living in it. --J.S.

One to Watch
Teradata is high on the radar this year, appearing as a One to Watch in both the CRM analytics and marketing automation categories. Focused on the enterprise set, Teradata is known primarily for its BI capabilities, which can be leveraged through its multichannel CRM platform, and with a customer satisfaction rating of 3.7 it's clear the company is doing something right. Herschel says its reputation for high customer retention is due to its prominence as "a solid generic data mining tool." Its relatively small market share has prevented Teradata from climbing to a higher spot, but the ability of the Teradata Warehouse solutions to keep companies happy and coming back for more may increase the expanse of its grip in the future. --J.S.

Data Quality

The Market
This market has garnered a lot of attention during the last year thanks to organizations fully understanding the importance of poor-quality data. "Data quality is becoming a mindset for most companies," says Ted Friedman, vice president of data management at Gartner. As a result, data quality applications are transitioning from departmentalized tools to enterprisewide solutions. Data quality are now expanding to include other forms of data, such as financial and product data, via master data management (MDM) and customer data integration (CDI) solutions. The continued emergence of SOA will be critical to the development of MDM/CDI software. "Most of the data quality vendors are positioning themselves as an enterprise solution" says Jill Dyche, a partner with Baseline Consulting.

Another trend representative of this movement is multilanguage capabilities. As companies have gone international, so has their data, and vendors have responded by enhancing the multilingual capabilities of their offerings. "It's all about what's in a name," says Paul Kirby, a senior analyst at Forrester Research.

The Leaders
Firstlogic had been one of the few stand-alone data quality vendors left, but was finally acquired in February by Business Objects, less than three months after a failed attempt by Pitney Bowes. The key will be if Business Objects can retain Firstlogic's excellent customer service, represented by a 4.7 in customer satisfaction, highest among the leaders. The acquisition "removed any viable concerns about Firstlogic products and increases its global presence," says Robert Lerner, senior analyst at Current Analysis.

Firstlogic has continued to improve its IQ Insight data profiling product, giving customers the opportunity to deliver data quality services via an SOA format, although one analyst says that Business Objects has been "naive about CDI."

Trillium Software, a division of Harte-Hanks, secured its place on the leaderboard by earning solid marks across all categories. Besides offering perhaps the broadest range of international data quality capabilities, according to analysts, the company has used its Total Data Quality initiative to focus heavily on customer data and to rebrand its products as TS Discovery and TS Quality, releasing versions 5 and 7 of these solutions, respectively, this past year. "This company is the leader in international data cleansing," Kirby says.

Last year IBM Information Integration Solutions became a data quality leader with its purchase of Ascential Software in March, and announced its plans to integrate Ascential's data quality products with its WebSphere solutions. Big Blue has spent the last year doing exactly that, though is still working on "revamping the architecture, interface, and functionality" of its WebSphere ProfileStage and QualityStage data quality products, according to Friedman. Once completed, IBM will be able to offer a set of SOA-based data quality tools, which explains its 4.8 in company direction, the highest among the leaders. But for now IBM data quality tools are "better at cleansing noncustomer data," Kirby says.

Pitney Bowes secured its place as a leader within the data quality market, but received the lowest scores in all three categories. Since acquiring Group 1 Software in 2004, Pitney Bowes has focused on leveraging Group 1 technologies for customer data and mailing operations. "The company has not invested heavily in new data quality capabilities," Friedman says. With the market rapidly expanding beyond customer data, analysts dinged Group 1 on its narrow focus, though the company's support for address standardization for data in about 200 languages earned it honors.

The Winner
For the second year in a row, DataFlux is the winner of the data quality category. Its 4.0 in reputation for depth of functionality has helped it step from the shadow of parent company SAS, and it posted an 86 percent increase in revenue. The company also released version 7.1 of its Data Quality Integration Solution. But perhaps most important is that the company has made "MDM/CDI and SOA the centerpiece of its strategic initiatives and product development," Dyche says. If there is one question about DataFlux's offerings, it's that the company lacks support for international and multilingual data, according to Kirby. --Colin Beasty

One to Watch
Having acquired Similarity Systems in January, Informatica is a strong up-and-comer in the data quality space. Through the acquisition Informatica's addressable market increased substantially, and the company now has several data quality implementations inside global enterprises, supporting initiatives such as MDM, CDI, and SOA. "The key will be their ability to integrate Similarity Systems's technology and leverage their customers," Friedman says. --C.B.

Consultancies

The Market
If given a choice most enterprises would love to go it alone when implementing and maintaining their CRM solution(s), but the reality is that's hardly the case. Worldwide expenditures on CRM consulting and systems integration are likely to approach $6 billion next year, according to Forrester Research. Tighter integration with ERP and SCM software, the development and deployment of Web services, and the expansion of offshoring operations continue to drive this market. Additionally, the shift toward SOA will push clients to turn to consultancies, which "are staffing up to meet an anticipated shortage of personnel skilled in creating, integrating, and maintaining SOA components," says Bill Band, a principal analyst at Forrester Research.

The market itself is undergoing change, with the full-service global firms, such as Accenture and Deloitte, beginning to feel the pressure from smaller, regional firms, like Inforte and Aros Origin, and from the Asian offshore providers, such as Cognizant and Wipro Technologies. As a result, the market remains a highly fragmented one.

With these market changes comes a change in our own grading criteria. To better assess the consultants, this year CRM magazine has replaced the company direction category with ability to execute, a measurement of a consultant's ability to deliver project goals on time and on budget.

The Leaders
BearingPoint continues to focus on specific verticals and on building a more profitable client base as it recovers from recent enterprisewide struggles. "They've experienced leadership changes that have limited their ability to deliver a clear message on what's next for CRM," one analyst says. Things have settled down, and while the company continues to focus on the North American market, it does not offer any CRM outsourcing services and its CRM revenue growth was below the market rate, according to Gartner.

Capgemini is a global consultant whose strengths lie across the Atlantic and Pacific oceans, though the "firm is working hard and making headway in the North American market," Band says. The company received solid marks across the board, and offers strong SOA expertise, according to analysts. Capgemini is big into "rightshoring for CRM," according to the company, and continues to invest heavily in further offshore development. The company is also becoming a leader in providing CEM (customer experience management) advice to clients.

If customer satisfaction were the sole measurement of a consultant's CRM practice, Deloitte Consulting would be the winner for the third year in a row. The company continues to make up for shortcomings in breadth of services offered by providing outstanding client relationships, represented by a stout 4.5 in customer satisfaction. While Deloitte continues to target specific industries and places importance on maintaining a broad set of business-focused advisory services, its limited emphasis on global delivery models may "hamper its ability to remain an end-to-end provider in the long term," says Frances Karamouzis, a research vice president at Gartner. The company isn't "strong in offshoring either," Band says.

IBM BCS is a technology and consulting behemoth whose global reach and full range of services from strategy to technology integration keep bringing it back to the leaderboard. The company has a strong CRM outsourcing practice, particularly for contact centers, and has begun to invest heavily in delivering SOA and CEM expertise to clients. IBM's CRM revenue grew faster than the other leaders; one chink in the armor is its customer satisfaction score of 3.7, though IBM BCS is making "significant progress in improving its overall customer satisfaction," Karamouzis says.

The Winner
For the third consecutive year, Accenture is the winner by continuing to demonstrate its prowess in the CRM market through its strong ability to execute, resulting in a 4.5 in that category, strong financial growth, and breadth of services offered. The consulting giant also expanded its outsourcing and SOA practices. "With the exception of IBM, Accenture has the global scale, reach, and industry-specific expertise, almost unrivaled in the industry," Band says. Analysts did point out Accenture's project approach, which some clients have found inflexible, though most welcome. "Accenture is like the New York Yankees," one analyst says. "You either love them or don't want to have anything to do with them." --C.B.

One to Watch
Perhaps representative of India's growing presence within this market, Wipro Technologies, a technology services provider in India, is this year's one to watch. This up-and-comer's strengths lie in its software development and integration capabilities, which include SOA. If Wipro can continue to add business and CRM strategy consulting to its portfolio, don't be surprised to see it on the leaderboard next year. --C.B.

End of Part 2. Click here to read Part 1.