The 2012 CRM Market Leaders

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Sales Force Automation

The Market

Sales force automation (SFA) has been and continues to be about enabling sales teams to sell better. "Salespeople are kind of on an island—they're set with a quota and they want to be able to track and manage the basics," says Martin Schneider, CRM analyst at 451 Research. The industry is witnessing a push for deeper social and mobile SFA capabilities, as well as collaboration. He adds, "[Collaboration] does make people better by linking them to other people, but there's a big cultural change in that."

The Leaders

Microsoft's "hiring a major product strategist for Microsoft Dynamics CRM is one of the best moves [it] has made," asserts Leslie Ament, senior analyst and vice president of Hypatia Research Group. Bob Stutz came on board to lead the Dynamics CRM effort, catching the industry's attention. Microsoft earned a 4.0 for company direction, underpinned by its "ability to offer choice in deployments," giving it a huge advantage, says Ray Wang, principal analyst and CEO of Constellation Research. The Microsoft Dynamics CRM Q2 2012 Update introduced Microsoft Dynamics CRM Mobile and cross-browser support for Dynamics on versions of Internet Explorer, Safari, Firefox, and Google Chrome. "Microsoft is trying to figure out…how do we get [social, mobile components] into a stronger SaaS or cloud model?" Schneider says. "It's playing catch-up in some ways, but it's got tools to be innovative in others."

NetSuite earned an enviable score of 4.0 as the SFA category leader in customer satisfaction. Last year's Market Awards found NetSuite eyeing larger enterprise, and it appears the company made some headway in that regard. Among enterprise and midmarket solution providers that recently made the move to NetSuite Cloud were Deloitte Consulting, Grant Thornton, and Blytheco. As a result of this effort, NetSuite's revenue spiked, showing a 30 percent year-over-year increase in the first quarter of 2012.

For the fourth year in a row, Oracle clinched a title as an SFA Market Leader, and rightfully so. Oracle pulled a 4.2 for depth of functionality. John Ragsdale, vice president of technology research for the Technology Services Industry Association, calls it a "functional best of breed." The release of Oracle RightNow CX Cloud Service, coupled with Oracle Fusion CRM, blended its customer experience solution with sales force automation for a cross-departmental view of the customer. Oracle's score for company direction dropped slightly (3.7, down from 3.9), which could be correlated to the company's healthy stream of acquisitions, not the least of which was the $1.5 billion purchase of cloud-based CRM provider RightNow Technologies last fall.

After coming in as our One to Watch last year, SugarCRM was clearly not content to watch from the sidelines. Wang says that SugarCRM's "win with IBM puts it on the map for enterprise-class, open source solutions," after IBM bid farewell to its Siebel solution last year and said hello to Sugar. SugarCRM recently clinched $33 million in financing to further expand its enterprise offerings, experiencing 118 percent growth in global billings in the first quarter of 2012 from first quarter 2011.

The Winner

For the seventh consecutive year, Salesforce.com stole the show for its Sales Cloud, which weds social accounts, Chatter, mobile, and analytics capabilities. Securing the top spot for company direction with a 4.4, it;s safe to say that it's "mapped on to the transformative nature of social and analytics in the workplace," Schneider notes. At press time, Salesforce.com was gearing up for its summer 2012 release, going full steam ahead with social business offerings and beefing up its sales solution pipeline. Salesforce.com led the pack for functionality, with an impressive 4.3. This vendor "continues to lead the market with thought leadership, and its vision of a social enterprise goes beyond sales," Wang says, adding that customers will be eyeing "how it plans to modernize and improve its core SaaS architecture.

One to Watch

A newcomer to the SFA ranks this year, >Zoho nudged its way onto our radar screen to take the title of One to Watch. Ament says this is a company with small-business know-how, offering solutions that serve as "an attractive option for businesses requiring basic marketing, customer support, Web conferencing, and sales force automation functionality." There's something to be said for getting back to basics. "Zoho is emerging as a very strong candidate for the space…where people just want 'enough'" to seamlessly close the deal, Schneider explains.

Incentive Management

The Market

Incentive management (IM) is heating up. "This is a very hot area, with lots of innovation and merger activity going on," says Jim Dickie, managing partner of CSO Insights. The economy is putting pressure on companies to find smarter, cost-efficient ways to motivate their sales teams as well as help them uncover and track more leads. The year was marked by a number of major consolidations as companies seek ways to invest in their employees. In addition, gamification has become the latest industry buzzword, and forward-thinking companies are turning to game mechanics to influence employees' and customers' behavior.

The Leaders

The newly acquired Merced Systems has once again earned a spot on the leaderboard. Late last year, NICE Systems , a company based in Israel that provides analytical tools for recording service transactions, announced that it would buy Merced Systems for approximately $150 million. Analysts approve of the acquisition. Dickie notes that integrating Merced with NICE's capabilities gives customers a "more robust [sales performance management] solution." Ray Wang, principal analyst and CEO at Constellation Research, says the acquisition "adds a broader vision" to the range of solutions in Merced's portfolio.

After receiving the 2010 One to Watch title, Softscape disappeared last year, only to reappear on the leaderboard as part of SumTotal Systems. After acquiring Softscape two years ago, SumTotal Systems, a provider of human capital management solutions, integrated Softscape's talent and performance management solutions into its offerings, providing a software suite that covers key human resource functions including training, performance, compensation, social collaboration, hiring, planning, analytics, and more. SumTotal's offerings point to a growing trend in companies investing in more HR technology, according to Wang.

One of the earliest vendors to enter this space, Synygy holds steady as an IM leader. Along with SumTotal, Wang notes that Synygy appears on a lot of short lists "because of its wide range of industries and depth of functionality." Last year, it announced partnerships with Kane Bank Services, a retail bank consulting and sales training practice, and talent management solutions provider StepStone Solutions. Synygy reported 35 percent total revenue growth for Q1 of 2012 compared to the same quarter last year, and a 56 percent rise in managed support subscriptions.

In April, a few months after Varicent Software reported a 42 percent revenue growth for 2011, making it the company's best year in terms of sales and client acquisitions, IBM snapped up the Canada-based vendor. With its high score of 4.1 in company direction, analysts seem confident that Varicent will do well on IBM's roster. Combining Varicent's software, which automates and analyzes data to uncover trends across sales, finance, human resources, and IT departments, with IBM's other acquisitions, such as Unica, Cognos, and SPSS, provides customers with a "very strong analytics solution set," according to Dickie.

The Winner

Xactly has done it again: The San Jose, Calif.–based company takes the title of IM winner for the fourth year in a row. Michael Fauscette, group vice president of software business solutions at IDC, says Xactly provides "a strong and modern user experience and [does] simplicity better [than other vendors]." Analysts also praise the vendor for its innovative approaches. "Xactly remains a progressive thought leader as it adds gaming mechanics to incentives," Wang says. Xactly unveiled a new customer loyalty/gamification platform, Friends of Xactly, that rewards customers with points for activities, such as speaking at Xactly's user conference, providing a case study, or following Xactly on Twitter. Customers can exchange points for discounts to its user conference, free training, or dinner with Xactly's CEO, Chris Cabrera, in addition to earning status levels such as "Fan," "Champion," and "Rockstar."

One to Watch

French compensation provider Excentive International slipped off the leaderboard this year. Fauscette notes that the company has a "good set of functionalities," but needs to "shake things up." Given its new strategy, the company may return to the leaderboard next year. Excentive International has made North America "a top priority for 2012" according to a company statement. As part of its strategy, the company announced a partnership with OpenSymmetry, an Austin, TX–based SPM consulting firm, which will include Excentive in its offerings to its customers. "This partnership represents an important step in our current strategy: to make our U.S. subsidiary the number one operation of Excentive International," said Excentive International CEO Fabio Ronga in a statement.

Marketing Solutions

The Market

Marketers continue to place their bets on digital technology as vendors roll out increasingly sophisticated solutions. Digital tools covering online, mobile, and email are "taking the lion's share" of the marketing budget at the expense of traditional advertising and marketing vehicles, according to a report by Forrester principal analyst Tracy Stokes. Gartner analyst Laura McLellan predicts that by 2017, CMOs will spend more on IT than their counterpart CIOs. In a Webinar, McLellan noted, "Technology is at the heart of marketing—and adoption is well under way."

The Leaders

Returning leader Aprimo (acquired by data warehousing and business analytics company Teradata in 2010) is a "dominating presence among Fortune 100 companies and a solid brand," says Raj Agnihotri, assistant professor of marketing and director of research at The Schey Sales Center at Ohio University. Aprimo expanded its Integrated Marketing Management solutions this year with the Aprimo Real-Time Interaction Manager, an inbound solution that analyzes customer interactions in real time. With solid 4.0s in depth of functionality and company direction, analysts are pleased with Aprimo's development. Despite its success, Michael Fauscette, group vice president of software business solutions at IDC, says Teradata faces "a lot of competitors coming from different angles," posing a challenge for the vendor.

Although it managed to stay on the leaderboard, analysts had mixed reactions to Eloqua, the software-as-a-service marketing automation pioneer. Last summer, Eloqua launched a new Social Media Suite that enables users to improve form conversions, increase campaign reach, monitor real-time conversations, and score leads. According to Ray Wang, CEO and principal analyst at Constellation Research, the release "significantly improves the user experience and is designed to simplify the most complex scenarios." Fauscette notes that the company has a "decent reputation" but it needs to improve its company direction.

SAS Institute is the"Rolls Royce of [the] market," Fauscette says. The vendor scored a 4.2 for customer satisfaction and 4.0s for depth of functionality and company direction but stumbled on product cost, with a 3.2. On a positive note, Wang points out that SAS's industry solutions "remain its strength" and it has "made strides in improving its offerings in social [media]." Last summer the company unveiled new features for its SAS Social Media Analytics, which include social scorecards, an author hub, and competitive intelligence functionality.

This year marks the second year that Unica has held its spot on the leaderboard after IBM acquired the marketing software maker for about $480 million in 2010. To get the most out of its purchase, Brent Leary, cofounder and partner of CRM Essentials, says making Unica "more accessible" so that end users can "take advantage of the [solution's] vast amount of functionality would go a long way in maximizing [IBM's] investment in the platform." In addition, Unica remains "the gold standard" for high-end solutions, according to Wang.

The Winner

Marketo grabbed the crown for the second year in a row. Social marketing automation solutions have been a weak spot for many vendors, but Marketo shook things up this spring when it bought social campaign management firm Crowd Factory in its first-ever acquisition. "Marketo's move to acquire Crowd Factory signals a realization that social is not only a requirement but also a key strategic differentiator," Wang says. Adding Crowd Factory to its portfolio makes Marketo a "complete happy family," adds Agnihotri. "Marketo's leadership understood…that social marketing applications were missing from their product family so acquiring Crowd Factory was really a smart move," he says. The company also recently unveiled Marketo Social Marketing, a suite of products designed to make marketing campaigns inherently social. The suite's first offerings, Marketo Social Boost and Marketo Social Promotions, include a new collection of social campaign applications, such as video sharing, voting, sweepstakes, and referrals.

One to Watch

Despite falling short of the leaderboard once again, Oracle offers a lot of potential, according to the judges. "They're serious about building out," Fauscette says. "They're competing heavily against IBM and SAS Institute, and they're starting to run into Marketo more." According to Wang, Oracle's recent acquisition of Vitrue, a social marketing platform, was a response to Marketo's Crowd Factory purchase and an attempt to "leapfrog" its own gap in social marketing automation.

Business Intelligence

The Market

As big data continues to grow, the business intelligence market does too. Start-ups and established vendors are racing to help companies unlock insights about consumers by offering tools to mine data, analyze it, and track it in real time. The market is dominated by companies buying their way in because BI is "such a hot space," Michael Fauscette, group vice president of software business solutions at IDC, explains. There is still room for smaller, more nimble players to gain a toehold, particularly around social analytics, he says. "It just takes a little time to get there," he says.

The Leaders

"Oracle gets big data," says John Ragsdale, vice president of technology research for the Technology Services Industry Association, adding that the company is oriented toward helping customers leverage BI through its core applications. In a blog post, Forrester analyst Boris Evelson explains that Oracle's 2011 acquisition of Endeca, a provider of unstructured data management, Web commerce, and business intelligence solutions, was key in differentiating the company. "Oracle has leapfrogged all other leading BI vendors in its capability to integrate unharmonized data sources and perform search-based BI," Evelson writes. Oracle still has room for improvement, though, and received a 3.8 in customer satisfaction, placing it behind several vendors.

Last year's One to Watch, Qliktech, has jumped to the leaderboard. Qliktech offers a "fresh, modern application," Fauscette says. Its 37 percent sales growth over the past year helped it snag third place, surpassed only by LinkedIn and Apple, on Forbes' annual list of America's 25 Fastest-Growing Tech Companies. In fall 2011, the company unveiled QlikView 11, introducing social decision-making on its self-service BI platform to help users collaborate to make more insightful decisions. "QlikTech's focus on ease is helping to democratize business intelligence," Steve King, a partner at Emergent Research, notes. Ray Wang, principal analyst and CEO at Constellation Research, says Qliktech's fast, business-friendly BI tools"remain the envy of business users around the world."

SAP once again snagged a spot on the leaderboard with SAP Business Objects and its HANA in-memory database. "[SAP seems] to be set up nicely for the future with HANA, and a thorough roadmap for collaborative analytics and mobile BI—two areas that promise to be crucial," CRM Essentials cofounder and partner Brent Leary says. Wang notes that "customers love the Business Objects capabilities, but the company still needs to harmonize its metadata model with the rest of its acquisitions."

SAS Institute's offerings continue to secure its position on the leaderboard. "SAS customers are extremely loyal and love the industry focus on solutions," Wang says. The fact that the company's product is difficult to implement holds it back, however. In a "Magic Quadrant for Business Intelligence Platforms" report, Gartner notes that the company has been making an effort to address such criticism, which could boost SAS Institute's results with analysts next year.

The Winner

The reigning champion for the fourth year in a row, IBM continues to be a "dominant player," thanks to multiple strategic acquisitions in the BI space, according to Ragsdale. "Cognos, in particular, is highly adopted and highly regarded by large high-tech firms," Ragsdale notes. Having added Varicent to a broad collection of acquisitions in its Smarter Analytics System, including Algorithmics, Clarity Systems, OpenPages, and Cognos, in addition to investments in predictive analytics vendors such as SPSS, IBM is going strong. Part of IBM's success is its ability to solve complicated issues for its customers. "IBM's Smarter Analytics is the high end of the market in the types of problems solved and the ability to address complex scenarios," Wang says. Judges awarded the vendor best-in-category scores of 4.7 and 4.6 for depth of functionality and company direction, respectively.

One to Watch

As a business intelligence provider, Teradata is a company to watch. Its solutions are "highly flexible," and the user interface of its products is becoming "increasingly easy for business users," Ragsdale says. Although Teradata's market share in this space is small compared to companies on the leaderboard, the company's coffers are growing, which could lead to more powerful solutions down the road. The company reported a 21 percent increase in revenue for the first quarter of 2012, compared to the same quarter a year ago.

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