The 2014 CRM Market Leaders
Oscar Wilde once said, "It's a very sad thing that nowadays there is so little useless information." Indeed, organizations are collecting an enormous amount of information. Unfortunately, though, not all of it is good data. In fact, a new study by Experian found that 84 percent of companies are currently facing a data quality challenge. Bad data, the Data Warehousing Institute says, costs U.S. businesses an estimated $611 billion annually.
This has created unique challenges for data quality vendors, which are seeing their market share undercut by data scientists, according to Bloor Research. "It is clear that organizations benefit from data quality expertise beyond what is provided by large application and platform providers," wrote Philip Howard, research director at Bloor, in a recent report.
The data quality industry, Howard also predicts, will continue to expand its market beyond basic data cleansing (matching, elimination of duplicate information, and error correction) to include data profiling, discovery across multiple data sources, and compliance with stricter government regulations around corporate data.
Research firm IDC agrees, noting that in the worldwide enterprise software market, structured data management software and data access, analysis, and delivery solutions are expected to show the strongest growth in the next five years, at a compound annual growth rate of near 9 percent through 2018.
Also, expect to see more niche players emerge. "There are already companies like Uniserv, X88, and others that have niches in particular markets," Andy Hayler, CEO of The Information Difference, observes.
Scores of 4.4 in depth of functionality, 4.3 in company direction, and 4.1 in customer satisfaction weren't enough to propel IBM past the category winner, but Big Blue wasn't far off the lead. Analysts were impressed by how much attention the company has placed on data quality. "A lot of work on data quality is now embedded throughout many of IBM's offerings," says Ray Wang, founder and principal analyst at Constellation Research. "It's hard to find a solution without the [data quality] component playing a key role."
Pitney Bowes this year advanced to the leaderboard after finishing as a One to Watch for the past two years. Better-than-average scores of 3.7 in depth of functionality, company direction, and customer satisfaction were the key drivers for the company's movement this year. Traditionally considered a contact and mail management company, it also helped that Pitney Bowes has expanded in the data area to include geolocation and spatial information, demographics, and business intelligence.
With scores of 4.4 in depth of functionality and 4.0 in customer satisfaction, SAS Institute is still impressing analysts. "They continue to play a role where clients have a strong app development shop and want to build versus buy their own larger set of [data quality] solutions," Wang points out. "SAS has a very strong and comprehensive data quality solution with a particularly good user interface that is popular with its customers," Hayler adds.
Trillium Software, a Harte-Hanks company, racked up scores of 4.0 in both depth of functionality and customer satisfaction to again advance to the leaderboard. Several analysts pointed to the company's recent partnership with Colibra, a provider of data governance software, as a step in the right direction. Wang says Trillium has a lot more in its favor, noting that its recent expansion in China, the appointment of Phil Galati as its new CEO, and its integration with Microsoft Dynamics CRM all "bode well" for the company.
Scores of 4.6 in depth of functionality and 4.5 in company direction sent Informatica to the winner's spot this year after sharing the top spot with SAS last year. The company also scored a 4.1 in customer satisfaction. Since the arrival of Dennis Moore as senior vice president and general manager of master data management at Informatica in late 2012, "the team has been heating it up in all the markets," Wang says. "We see Informatica in almost every short list for data quality."
One to Watch
SAP has seen its share of changes this year, including a few key management shake-ups that have analysts watching with a high degree of caution as to where the company will go. But in the end, the company's depth of functionality can't be ignored, according to analysts.
Open-source CRM software is certainly not for everyone. Businesses looking for out-of-the-box, complete applications should steer clear of this market segment, but it makes sense for companies that want to tailor every aspect of the CRM experience from the ground up.
CRM buyers would have far fewer choices were it not for open-source applications. Open-source application vendors provide a number of alternatives to bigger, more mainstream application vendors such as Oracle, Salesforce.com, Microsoft, and SAP, often at a much lower cost of entry. For that reason alone, they have become increasingly competitive and are being used by thousands of companies worldwide.
The market in the past few years has become densely populated with several very viable software products and very active user and developer communities to support them, but it is still quite limited. Though open-source software is becoming more attractive to a growing number of businesses, its use is still confined mostly to small and midsized firms with restricted budgets.
By its nature, this is a very fast-changing market, so it becomes very important to pick the right vendor for your particular needs, and then plan to spend a lot of time and effort on customizations.
Agile CRM, a newcomer to the leaderboard this year, was elevated by a 4.3 score on cost, a key selling point in the open-source CRM category. "For the price, Agile has put together a solid offering that covers a lot of ground while providing nice value," says Brent Leary, cofounder of CRM Essentials. "The visual designer for building campaigns makes it easier to automate important processes. I especially like the focus on connecting and optimizing e-commerce use cases back to traditional CRM."
SplendidCRM appears for the first time in the top five this year, impressing analysts with its depth of functionality (3.9) and cost (3.8), but that isn't all the company has in its favor. For one, its business model is certainly unique: SplendidCRM is based on SugarCRM technology and targets the Microsoft-centric small business sector, where Microsoft Dynamics CRM is often considered too expensive and complex to implement.
With its rankings this year, vTiger has now made the leaderboard seven of the past eight years. As in years past, its strength lies in the area of cost, where it scored a 4.0. Because of its capabilities around sales and marketing automation, customer support and service, inventory management, analysis and reporting, email and calendaring integration, and a host of other features, the company garnered a respectable score of 3.9 in depth of functionality.
XTuple, a fixture on the leaderboard, did not disappoint this year. Analysts gave the company a rating of 4.3 in cost, due largely to its flexible licensing and pricing options. The company offers a free version and a fee-based enterprise version of its software. The company also put up strong numbers in depth of functionality, customer satisfaction, and company direction, with a 4.0 in all three. Part of the company's appeal, according to analysts, is the breadth of its offerings, which include not only CRM but also enterprise resource planning, supply chain management, and accounting software all integrated into one modular system that can support Windows, Mac, Linux, and mobile platforms.
SugarCRM has been the industry leader every year that the open-source category has been included in CRM's Market Leader Awards, and this year is no exception. "Even though they have moved beyond being viewed solely as open-source CRM to being a leader in the industry in general, they are still the measuring stick if you want an open-source solution," Leary says. "In fact, SugarCRM has led the way in thinking of open-source CRM [as] being more about CRM functionality and less about how it's created." It also helped that the company scored an industry-leading 4.5 in depth of functionality and a 3.9 in customer satisfaction.
One to Watch
CiviCRM is once again the One to Watch. Boosting the company's position this year is its generally low cost; it scored 4.0 for this criterion. Low cost could be considered critical, given that CiviCRM specializes in CRM for nonprofits, according to Paul Greenberg, president of The 56 Group. Some of the big-name organizations using its products are Amnesty International, Creative Commons, and the Free Software Foundation. The company is also benefiting from new Drupal 8 integration and a voice broadcast feature.
Gartner states in its most recent "Magic Quadrant for Worldwide CRM Service Providers" that CRM implementation services continue to be in high demand. The firm late last year estimated CRM services to be a $34 billion market, with a 7 percent compound annual growth rate expected through the year 2015.
As is the case with all CRM applications and services, social media, big data, mobility, and cloud computing have been disruptive forces in the CRM consulting industry, compelling firms to change their focus somewhat. Current market demand has also forced many firms to implement skill sets associated with business analytics, according to Ali Zaidi, a senior analyst at IDC.
And while in the past, the majority of CRM consultancies chose to tie themselves to one software vendor or a small handful of them, industry forces have led most consulting firms to align with many vendors to maintain market share.
Appirio, a newcomer to the leaderboard, led all competitors in its ability to execute (4.1) and company direction (4.3), and tied for first place in customer satisfaction (4.1). The company is strongly linked to Salesforce.com, which can both help and hurt it. "As Salesforce.com continues to expand the Salesforce1 platform and messaging, Appirio will have to continue to differentiate their business strategy and other services," warns Rebecca Wettemann, vice president of Nucleus Research. Wettemann expects the market for Salesforce implementation services to become "more and more crowded and competitive."
Cognizant, last year's category winner, this year slipped just slightly, but still managed to position itself among the industry leaders with scores of 3.9 in its ability to execute and customer satisfaction and 3.8 in cost and company direction. The Teaneck, NJ–based firm also has a strong overseas presence, works with a wide range of CRM products from Oracle, Microsoft, Amdocs, Salesforce.com, and Cegedim, among others, and is particularly well positioned within the financial services and life sciences industries, where it's considered among the best by analysts.
Deloitte, a leader last year as well, was kept from the top spot primarily because analysts dinged the company for its slightly high costs. Nonetheless, its other scores, particularly for its ability to execute, kept it firmly in contention this year. "Deloitte's comprehensive approach to customer management consulting encompasses all customer touchpoints of engagement, operational business process redesign, as well as integration with new or existing legacy systems," says Leslie Ament, senior vice president and principal analyst at Hypatia Research Group.
Despite a lack of CRM solutions in its portfolio, IBM Global Business Services continues to demonstrate a strong presence in the consulting arena. Its score of 3.9 in customer satisfaction placed it just slightly behind the category winner; IBM also finished high in its ability to execute and company direction (3.8 in both). And, while it lacks CRM expertise, it excels in information management, digital marketing, and big data analytics services, according to analysts.
Hitachi Consulting, an industry leader last year, surged ahead of the competition this year on its reputation for customer satisfaction, where it scored a 4.1, and near-the-top scores in the other criteria. The company was also buoyed by its recent acquisition of IMGROUP, a specialist provider of information management and business intelligence solutions. The acquisition increases Hitachi's European presence and its capability to deliver results for clients in the areas of asset optimization, risk management, and customer experience. "While many of the traditional consultancies have struggled to compete in an increasingly cloud and iterative world, Hitachi has embraced it and continues to differentiate its abilities in the CRM space and in embracing cutting-edge CRM products that drive down the cost and risk of overall projects," Wettemann says.
Ones to Watch
Capgemini reprises its role as a One to Watch this year. The French firm, whose customers include many large multinational companies, scored near the top of the pack in customer satisfaction, with a score of 3.8. Working with MIT, this February Capgemini also created a new global service line dedicated to digital customer experiences. Analysts will be keeping their eyes on Cloud Sherpas, which greatly expanded its CRM business with the acquisition of Innoveer Solutions last year. This, Wettemann adds, makes Cloud Sherpas "arguably the largest cloud systems integrator to date."