The 2011 CRM Market Leaders

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OPEN-SOURCE CRM

The Market
While open-source has exploded in Web development and content dissemination more broadly, the uptake in open-source CRM, albeit steady, has been slower. Largely dependent on support services for their products as the chief source of revenue, many vendors don’t pull the kind of dollars that non-open-source vendors, who are selling licenses, can. Their revenue models are focused on small to medium-sized businesses—a CRM sector yet to reach maturity.

Compounding that, open-source also faces challenges from software-as-a-service (SaaS) vendors, such as Zoho, that target the SMB market with competitive pricing schemes. Those factors tend to inhibit growth, and that is reflected in the low revenue numbers across the board.

Nevertheless, open-source provides some enticing benefits: the potential for full customization to meet the needs of a business, low up-front costs, and strong third-party development.

The Leaders
Consona (Compiere) makes the leaderboard for the fourth straight time (every year in the history of the open-source category). Last year, Consona, a CRM and enterprise resource planning (ERP) solutions provider, acquired Compiere in a bid to penetrate cloud-based CRM. This marks its first year competing fully under Consona’s banner. Compiere posted decent scores across the board and sported the highest revenue score (primarily because of its attachment to Consona) along with one of the higher customer satisfaction numbers (3.8) among our leaders. Holding Compiere back from an outright win were a lower score in cost (2.6) and a middling number in depth of functionality (3.3). Naturally, the winner exceeded those scores.

“Compiere is a very good product, but from a feature standpoint, they’re not deep,” says Paul Greenberg, president of The 56 Group.

Returning to the ranks of top open-source contenders was Concursive, which had the second-highest depth of functionality score (3.8). “[Concursive] is pretty robust,” says Michael Fauscette, group vice president of software business solutions at IDC. “They’ve had some investment, some [venture capital] money from Intel, and they’ve tried to be a little more enterprise-focused.”

Built on Microsoft’s platform, one of the keys to SplendidCRM’s strategy has been to pick off customers from Microsoft’s expansive partner base. That approach has drawn the attention of many analysts, who find the company intriguing, if daring, for using Microsoft’s tools against the software giant. Splendid scored well in functionality (3.5) and fairly decently in direction (3). But the vendor may have trouble courting higher-profile clientele because those companies are wary of Microsoft’s ire.

Considered by many analysts as a player to watch in open-source, Linux-based vTiger finds itself among our leaders again. Judges deemed the company’s offerings a good value for the money—less than $500 for three seats—and awarded the company the best score in cost (3.8). The company, which did well with decent scores in all categories except revenue, is due for a refresh in July with a number of streamlines.

The Winner
This year’s recipient should surprise no one. Extending its winning streak to four years, SugarCRM swept 2011’s open-source category, scoring the highest marks in almost every metric. “Anytime you talk about open-source CRM, Sugar comes up; they’re by far the best known and by far the largest,” Fauscette says.

SugarCRM fared particularly well in depth of functionality and company direction, where it got nearly perfect scores. This has been an aggressive year for SugarCRM, a factor that undoubtedly played a role in its direction scores. The company announced partnerships with Infratel (a call center solutions provider focused on small and medium–sized businesses) and InsideView (a sales intelligence solutions provider that pools data from social media sources like Twitter, Facebook, and LinkedIn). The company also bought iExtensions, a CRM solution for IBM Lotus Notes, for an undisclosed sum. The purchase strengthens SugarCRM’s foothold in the IBM world. 

One to Watch
Once again this honor goes to Xtuple, which posted one of the highest customer satisfaction ratings this year (3.8). Holding it back from a place among the leaders, though, were cost (1.5), depth of functionality (2.3), and company direction (2.3]. Compared with other players, however, Xtuple did fairly well in revenue (1.0). This might partly be because the company has ERP offerings, which means it’s not a straight CRM provider. “Xtuple has seen better uptake…because there’s been less SaaS offerings in the ERP space,” Fauscette says.

CONSULTANCIES

The Market
For players in the CRM consultancies game, the rules are changing. Now that companies have their heads in the clouds, consulting firms must be as fast as lightning. Ray Wang, principal analyst and CEO at Constellation Research, explains that over the last year, “a rapid shift to cloud and SaaS left consultancies scrambling.” Big companies that had relied on the revenue from on-premises implementations have had to create new ways to stay relevant.

It’s no surprise that industry shake-ups rocked our leaderboard in 2011. Deloitte, last year’s winner, vanished, while smaller, cloud-centric companies rose to glory. Going forward, companies will focus on becoming thought leaders in integration, mobile enablement, and social media to remain desirable to potential clients, analysts note. “Customers are looking to consultancies to guide business practices, not just code,” says Rebecca Wettemann, vice president at Nucleus Research.

The Leaders
Accenture, a forever favorite among CRM consultancies, garnered a leaderboard spot this year, but barely. In Gartner’s “2010 Magic Quadrant for CRM Service Providers, North America,” Accenture was praised for “excel[ing] at delivering large, complex CRM initiatives.” But with the move toward shorter, faster SaaS deployments, Accenture also has struggled to adapt, analysts say. “Accenture, like most large traditional firms, has had challenges making the transition to cloud services,” Wettemann says. But, according to Jim Dickie, managing partner at CSO Insights, the depth of services that this giant offers, with its superb sales management support, has helped Accenture maintain its swagger.

Founded in 2000, New York–based Bluewolf is the baby of the leaderboard. But age might be the secret to its success. Jeff Kaplan, managing director at ThinkStrategies, says, “Bluewolf has grown up in this market, so it’s more attuned to user demands than legacy players.” Bluewolf placed as a One to Watch in 2009, but the company has since established itself as a clear leader in a SaaS-focused market “as an attractive option in SMB and low midmarket segments,” says Leslie Ament, vice president at Hypatia Research. Analysts agree that Bluewolf’s pricing can’t be beat—the firm earned the highest rating for “cost.” In a world of tight service budgets, Bluewolf may be positioned to become top dog in 2012.

French consultancy Capgemini has appeared as a leader for nearly a decade. Wang notes that its mix of “innovative projects” and “European focus” makes for an attractive sell to multinational customers, while the company’s May acquisition of Minneapolis-based BI Consulting Group shows that Capgemini is happy to play on this side of the pond, too. If Capgemini continues to push the market with cutting-edge strategies—like the launch of the Agile Legacy Lifecycle service, which helps clients create flexible implementations—this firm will be on the board for another 10 years.

IBM Global Business Services has become known as a Jack of all trades, and analysts say that it won’t soon lose this reputation. Dickie praises the company’s “strong specialization in lead generation,” as well as its social networking know-how, both avenues that IBM has traveled in 2011. In March, the company revealed Smarter Commerce, a consulting practice that helps clients increase customer adoption and loyalty through social media. The release is right on the pulse of the market, Dickie says.

The Winner
Dark horse candidate Innoveer took advantage of a volatile industry and ran away with the win. The company may not boast the sexiness of a Bluewolf or the prestige of an Accenture, but analysts say what’s important is thought leadership—and Innoveer has it in spades. “Innoveer has been able to retain talent where many others have been challenged,” Wettemann says. In the past year, Innoveer displayed its grasp on forward thinking by expanding its SFA Accelerator service and focusing on mobile agility. Wettemann argues that Innoveer will continue to be a force because it can “help many move to the next level of CRM, where [companies] are not just gathering data but [also] using analytics to better understand customer behavior.”

One to Watch
Cloud centricity is hot right now, and analysts predict the temperature will soon rise for Salesforce.com-partnered firm Appirio. Wang praised the company for its “capability to move in fast and impact results.” The low cost of Appirio’s services make it a solid choice for companies of any size. “There’s a lot of people going after the GEs of the world,” Kaplan explains, “but there’s not many going after the midmarket.” And that’s where he sees Appirio making its mark. With cash and quickness looming larger than ever, big companies would be well advised to keep their eyes on this smaller upstart.

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