The 2012 CRM Market Leaders
The editors of CRM magazine would like to extend their deepest appreciation to those who took part, in degrees large and small, in evaluating this year's CRM Market Awards. This issue, and the Market Awards themselves, would not have been possible without the contributions of these judges, assessors, commenters, and raters. Thank you to: Raj Agnihotri, assistant professor of marketing and director of research, Schey Sales Center at Ohio University; Leslie Ament, vice president, customer intelligence research and client advisory service, Hypatia Research Group; William Band, vice president and principal analyst, Forrester Research; Jeff Cotrupe, global program director, ACEM and OSSCS, Stratecast | Frost & Sullivan; Jim Dickie, managing partner, CSO Insights; Michael Fauscette, group vice president, software business solutions, IDC; Paul Greenberg, president, The 56 Group; Jim Harris, consultant, Obsessive-Compulsive Data Quality; Andy Hayler, president and CEO, The Information Difference; Jeff Kaplan, founder and managing director, ThinkStrategies; Steve King, partner, Emergent Research; Brent Leary, cofounder and partner, CRM Essentials; Laurie McCabe, partner, SMB Group; John Ragsdale, vice president, technology research, Technology Services Industry Association; Martin Schneider, CRM analyst, 451 Research; Mark Smith, CEO and chief research officer, Ventana Research; Suresh Vital, vice president, practice leader, Forrester Research; Ray Wang, CEO and principal analyst, Constellation Research.
The CRM market continues to prove its worth with some impressive growth. According to one analyst firm's CEO survey, CRM is the most important area of investment to improve business over the next five years. Fueling this growth are investments in software-as-a-service, social, mobile, analytics, and even gamification applications. Find out which vendors are ramping up these offerings and best responding to industry needs in this year's Market Leader awards.
Enterprise Suite CRM
This year, CEOs rated CRM as the most important area of investment to improve their business over the next five years, according to Gartner's 2012 CEO Survey. Global CRM software revenue totaled $12 billion in 2011, a 13.5 percent increase from 2010. Software-as-a-service (SaaS) deployments continued their growth trend, accounting for 32 percent of the CRM software market in 2011.
CRM vendors are increasingly tasked with tying workflows, analytics, mobile, and social components into an experience-driven solution that addresses the entire customer journey, according to Gartner.
Microsoft earned a solid score of 4.0 in cost for its pricing strategy. There has been a changing of the guard for Dynamics CRM this year, with Microsoft naming Dennis Michalis as general manager of Microsoft Dynamics CRM, a move analysts approved. The hiring of a new corporate vice president for Dynamics this spring was equally well-received. "With the arrival of Bob Stutz, competitors can expect a shift to the enterprise," comments Ray Wang, principal analyst and CEO of Constellation Research. While Wang applauds Microsoft's offering choice in deployments, Paul Greenberg, president of The 56 Group, notes that Microsoft's social and analytics components need to be strengthened.
NetSuite's scores were consistent with category averages across the board. Like some others on the leaderboard, NetSuite is paying careful attention to cloud commerce. This year, NetSuite unveiled its commerce-as-a-service solution, SuiteCommerce, allowing enterprises to manage business and customer interactions through a cloud platform on NetSuite's ERP/CRM business management application. John Ragsdale, vice president of technology research for the Technology Services Industry Association, calls NetSuite's integrated professional services automation and CRM a "major plus for an OnDemand solution."
Oracle made our leaderboard again, with good reason. Of all the enterprise CRM vendors evaluated, Greenberg says Oracle "might have the most complete functionality." Other analysts agreed, giving Oracle a 4.2, the top score for functionality. Brent Leary, partner at CRM Essentials, notes Oracle's "acquisition spree" over the last 18 months, picking up RightNow Technologies, Taleo, Endeca, Inquira, Market2Lead, Collective Intellect, and Vitrue, "which has allowed it to [add] top-notch functionality to its traditional CRM offerings." Leary mentions Oracle's developing a "broad focus on customer experience—and dividing that focus into B2B and B2C workflows, processes, and solutions."
An active player in this spring's string of big-name acquisitions, SAP again makes its presence known in the enterprise suite CRM category. Acquiring cloud-based business commerce company Ariba for $4.3 billion reinforces the fact that "people are getting into end-to-end commerce," Wang says. Cloud-based enterprise network and procurement is a $5 billion market, and SAP wanted a piece of it. Martin Schneider, CRM analyst at 451 Research, says SAP is essentially "rebuilding what it's doing" in terms of mobility and analytics. "[SAP is] entrenched in so many big businesses on the back end side with the financials that they can take the time [and] do it right. I think SAP is going to come back in CRM in a big way," Schneider says. SAP's score of 3.9 for company direction was solid, but not without a nod to the movement that awaits.
Salesforce.com, our enterprise victor, showed off a prime score of 4.5 for company direction. The company continued to wow judges this year, especially with its $50 million acquisition of SaaS solution Assistly (now Desk.com) last fall. "While it brings social service functionality that can be used in the service cloud, it also is a service rooted in serving small businesses," Leary says of Salesforce.com's multimarket reign. Oracle's pursuit of marketing automation (in its snapping up of Vitrue this May) was soon followed by Salesforce.com's acquisition of social marketing solution suite Buddy Media. "Salesforce.com continues to make a lot of moves," Schneider maintains.
One to Watch
KANA came in as our One to Watch, and while the company didn't make it to the leaderboard this year, Leslie Ament, senior analyst and vice president of Hypatia Research Group, says she is "favorably impressed" by the company's spring launch of the Service Experience Management platform, which is targeted for the enterprise. "Ease of use is provided via a single sign-on with one interface for agents, so that CRM data is available to them for history and decision support without having to access multiple screens," Ament says.
Midmarket Suite CRM
Last year's blurring of the lines between midmarket and enterprise CRM offerings has not cleared much. The likely trailblazers in the midmarket are those vendors that account for the surge in cloud, social, and mobile computing.
Expect to see SaaS growth continue, as Gartner predicts revenues in the United States will total $9.1 billion in 2012, up from $7.8 billion last year. That uptick carried out across the globe, with Asia-Pacific, Japan, and Latin America's growing adoption of CRM or ERP deployments.
Microsoft's release of Dynamics CRM 2011 continued to shake out with a Q2 2012 update, which included native support for mobile devices and planned upgrades in social customer care. "Microsoft showed some very interesting visions at [Convergence 2012] and they're kind of percolating," says Martin Schneider, CRM analyst for 451 Research. But he added that "it's interesting what [Microsoft] can do with all of its components to really create an experience-driven CRM." Laurie McCabe, a partner with SMB Group, says Microsoft "has hung in there [against competitor Salesforce.com] and that tenacity seems to be paying off. It's coming on strong." But the general word among analysts was that this vendor needs to juice up its analytics.
NetSuite took a solid 3.9 for company direction, a slight dip from its 4.1 last year, but analysts seemed pleased with this vendor's overall performance. Steve King, partner at Emergent Research, calls NetSuite "a great midmarket choice." While Paul Greenberg, president of The 56 Group, notes that "social components in the CRM component of its suite" are lacking, he did point out NetSuite's inherent nature as an ERP company.
NetSuite continued to pad its midmarket and enterprise partner network this year, introducing the cloud-based SuiteCommerce platform as a way for companies to manage customers across numerous touch points. "In terms of the bigger picture…it should be the way people think [about CRM]," McCabe says.
Oracle scored strong in functionality, nabbing a 4.1, a drop from last year's 4.4. A 3.7 in company direction—among the lowest on our leaderboard—justifies analysts' "wait and see" sentiment, especially with Oracle's recent acquisitions. Last year, analysts had questions about how Oracle Fusion CRM was shaking out, and at press time, Oracle had just paired its customer experience suite, RightNow CX Cloud, with Fusion CRM—bolstering the multichannel view of the customer.
SugarCRM held its competitive pricing edge, earning a score of 4.1 for cost. John Ragsdale, vice president of technology research for the Technology Services Industry Association, calls Sugar "a solution that continues to expand," with customer satisfaction that appears to be "climbing." Analysts were sweet on this vendor for replacing IBM's Siebel Systems implementation with SugarCRM, which indicates to King that it's "moving beyond small businesses."
Salesforce.com continued its winning streak, pulling the rug out from under its competitors for reputation for company direction with a score of 4.4. Salesforce.com's acquisition of Buddy Media further proved that the company planned to pad its social-media marketing capabilities. King calls Salesforce.com a "consistently strong vendor of midmarket CRM," and his praise was echoed by a declaration from McCabe that "Salesforce.com is still the leader."
Salesforce.com was hot on Oracle's heels for depth of functionality, earning a solid 4.0 for its bells and whistles. The vendor remains a CRM provider of choice for enterprise, midmarket, and SMB users, Schneider says, who adds that Salesforce.com's "ability to…ramp up to $750 million in revenue before quickly attacking the enterprise…proves it runs the gamut really well."
One to Watch
Being snapped up by Oracle last year for $1.5 billion did not hurt RightNow Technologies' position as a strength player, as it scored a 4.0 in customer satisfaction and retained its title as One to Watch. "This vendor has a significant offering with a good reputation for customer satisfaction, depth of functionality, and company direction," says Leslie Ament, senior analyst and vice president of Hypatia Research Group. "After being acquired by Oracle, along with ATG, Endeca, and other front-office vendors, it will be interesting to see if RightNow will be able to maintain the level of customer satisfaction built up over many years."
Small-Business Suite CRM
When it comes to small and midsized businesses (SMBs), cash is king. Affordability and pricing often take precedence over intricacies in functionality, and this year's small-business suite CRM leaders are no exception.
Smaller sales and marketing teams demand a no-nonsense approach, and software-as-a-service solutions that zero in on an SMB's lines of business and build out an all-in-one product will be most competitively positioned.
Forty-one percent of SMBs report having a CRM system in place this year, according to Forrester Research. Another 25 percent plan to deploy a CRM system this year or beyond, indicating the small and midsized environment is ripe for growth.
Microsoft made it on to our leaderboard for the second year in a row, following a four-year lapse. Steve King, partner at Emergent Research, says Microsoft has "great third-party support," and Martin Schneider, a CRM analyst at 451 Research, spoke of its many "interesting components, like the mobile platform." Still, in functionality, it settled in at 3.5. "I think they have a really great, great midmarket product, but I'm…skeptical that they are scaling it down enough for the true small business," Laurie McCabe, a partner with SMB Group, asserts.
NetSuite inched up from its position as One to Watch last year to place on our leaderboard. While King praises the suite's "excellent functionality," he remarks that this is generally a solution geared toward larger small businesses. While McCabe touts NetSuite's overall big-picture strategy, with impressive efforts in multichannel and e-commerce—namely, the introduction of the SuiteCommerce platform integrating ERP and CRM capabilities—she does point out that "you don't actually see too many small businesses buying NetSuite CRM." This may explain why the vendor's company direction dipped slightly from last year, dropping from 3.9 to 3.7.
Our winner in this category for five years straight, Salesforce.com did not relinquish its crown without a fight. It took top spot in company direction with a 4.2, and small wonder. It continues to be seen as a top innovator among industry experts. "Some of Salesforce.com's acquisitions…[are not] necessarily pulled together and neat yet, but it's really the innovator," McCabe notes. But despite the all-around "excellence" in offerings King speaks of, Salesforce.com's small-business pulse appears less clear. Some [small businesses] really like it, says McCabe, "but there are others that find it getting a little too convoluted."
SugarCRM carved out a niche again on the small-business suite CRM leaderboard, with a score of 4.0 in the cost category. King calls Sugar "a leader in open-source CRM, [offering a] solid product at a good price." While it may seem Sugar has its eyes on the enterprise after integrating with the IBM LotusLive collaboration suite and replacing Siebel as IBM's on-demand CRM of choice, it is still positioned as a leader in the SMB realm.
Zoho stepped up its game and stole top spot as our winner with a 4.5 for cost and a 4.0 for functionality. Analysts had plenty of positive things to say about this vendor. "Zoho CRM is cost-effective, easy to use, and continues to add on attractive functionality priced like an a la carte menu, which enables smaller businesses to scale as necessary," says Leslie Ament, senior analyst and vice president of Hypatia Research Group. John Ragsdale, vice president of technology research for the Technology Services Industry Association, counted Zoho among the "rising stars" for small-business CRM. This year, Zoho gave its user interface a full facelift, added a plethora of features like Pulse for internal collaboration, came out with myriad mobile integrations, and integrated Zoho Support with Facebook and Twitter.
For the small business that requires functionality at a price it can afford, "Zoho is emerging as a very strong candidate," Schneider says. Zoho has that disruptive star quality, he points out, adding that "Salesforce.com disrupted the Siebels of the world and [now you see] Zoho disrupting Salesforce" in on-demand, small-business CRM.
One to Watch
Sage was nudged off the leaderboard, but positioned itself as our One to Watch. This year, Sage launched a Cloud Platform with Essentials and Professional editions, as well as mobile support for devices such as Android and iPhone. While King says Sage has "fallen a bit behind in the cloud" in comparison to some of its counterparts, analysts' scores still reflected that Sage offers a cost-effective solution for small businesses, earning a solid 3.7.