The 2013 CRM Market Leaders

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Small-Business CRM Suite

The Market

Small businesses are social businesses. With a smaller number of employees and customers than large corporations, SMBs have the advantage of being able to build stronger, more meaningful relationships with consumers and engage with them through different channels. As social media continues to play an increasingly important role in business, small businesses are embracing this industry shift and turning to social CRM.

"If your business is focused on social engagement instead of traditional customer relationships, as small businesses are, then [social CRM] solutions could easily be the right choice," Steve King, partner at Emergent Research, says.

Typically budget-conscious, small businesses are also looking for vendors to provide more comprehensive but affordable solutions. "CRM functionality is being added to integrated marketing suite products, and other software for that matter," King says. Features and functionality that were once meant only for companies with massive budgets are being enabled efficiently and affordably through software, and small businesses stand to benefit.

The Leaders

Microsoft is on our leaderboard for the third year in a row, improving its score in functionality from last year's 3.5 to a 3.7. Microsoft is "becoming popular with smaller firms, but isn't ready to make the leap to the cloud for CRM," John Ragsdale, vice president of technology and social research at the Technology Services Industry Association, says. The company received its highest marks for company direction, with a 3.9. Analysts agree: Microsoft's CRM solutions are better for bigger companies.

Perhaps better suited for the larger end of the small business market, King maintains that "NetSuite is too complex and expensive for most small businesses." Still, the company received an impressive 4.1 for its overall direction—up from last year's 3.7. Though price continues to be an issue, Ragsdale suggests that NetSuite has a lot to offer. "It's more sophisticated than others in this category, and offers a full CRM/ERP suite," he says.

SugarCRM remains a leader in open-source CRM and is a "solid all-around product at a good price," King says. The company has reported 14 consecutive quarters of growth, with an increase of more than 30 percent in annual recurring revenue year over year in the first quarter of 2013. SugarCRM earned its highest marks for company cost, scoring a 4.1. "Users and administrators love this system," Ragsdale says, "particularly for its ability to impact product direction."

Our winner last year, Zoho received an unmatched 4.7 for cost but slipped in ratings for functionality from a 4.0 last year to a 3.3. Zoho's solution is "lean, easy to use, and popular with end users," Ragsdale asserts, but the problem arises when small businesses start to outgrow it. "It's a great choice for micro-businesses with less than five employees," King says.

The Winner

After last year's defeat, Salesforce.com returns as our winner with a 4.5 for its company direction and a 4.1 for its reputation for customer satisfaction. The company made major moves this year, introducing Marketing Cloud and expanding its marketing solution through a partnership with 20 social analytics providers. Taking notice of the social trend, Salesforce.com also launched Social.com, an application designed to bring together social listening with CRM. In June, the company made its biggest buy to date, purchasing cloud-based digital marketing platform ExactTarget for $2.5 billion. A consistent leader among large companies, Salesforce.com is now used by nearly half of TSIA members, according to Ragsdale, but this recent acquisition is helping it solidify its standing among small businesses as well. The acquisition of ExactTarget, which acquired Pardot just last year to add small business marketing automation capabilities to its own platform, will help Salesforce.com tailor its CRM to small businesses. It's now "the leading CRM product for small businesses of all sizes," King says. —Maria Minsker

One to Watch

Also named one of our Rising Stars, Infusionsoft comes in as our One to Watch this year. The company has been on Inc.'s 500/5000 list of fastest-growing companies for the last six years and snagged a coveted spot among Deloitte's Technology Fast 500 in 2012. This year, the company received $54 million from Goldman Sachs to improve and grow its sales and marketing automation system, acquired GroSocial, and introduced Infusionsoft Sync for Gmail, a Gmail integration system. The company has an incredibly loyal fan base, and earned an impressive 5.0 for customer satisfaction. They have "almost a cultlike following among their customers," King says.—M.M.

Sales Force Automation

The Market

As salespeople increasingly rely on smartphones and tablets to conduct business, it's only natural their preferred devices would affect their choice of contact management and sales force automation (SFA) solutions. "You're seeing more of an emphasis on integrating sales intelligence and team collaboration via Chatter/Yammer-like corporate social networks and an accelerated move away from laptop-based operations" to mobile devices, comments Brent Leary, cofounder of CRM consultancy CRM Essentials.

Subsequently, CRM vendors who develop SFA tools with mobility and collaboration in mind will be the ones that gain the most momentum in the years to come. In fact, organizations that provide sales teams with mobile access to CRM see, on average, a 14.6 percent increase in productivity, according to the Nucleus Research study "The Value of Mobile and Social for CRM." Similarly, sales teams that use social CRM solutions with collaborative features see an average 11.8 percent uptick in productivity.

The Leaders

Microsoft made the leaderboard again, earning a strong score of 4.2 for cost. "Microsoft Dynamics continues to gain momentum," comments Ray Wang, principal analyst and CEO of Constellation Research. "They win because of cost, [their] on-premises option, and xRM [Microsoft partner-specialists in Microsoft Dynamics CRM and private cloud services]." At this year's Microsoft Convergence conference, the company unveiled a mobile CRM sales application designed for the latest version of Dynamics CRM, which enables reps to manage opportunities from mobile devices with guided selling functionality baked in.

Although NetSuite's customer satisfaction score dipped slightly from last year's score of 4.0 to 3.7 this year, analysts still laud the company for reaching beyond standard contact data. Jim Dickie, managing partner of CSO Insights, notes that NetSuite's "CRM and back-office [capabilities] are a plus." For cloud suite buyers, NetSuite is still "one of the top solutions," according to Wang, who makes mention of its core CRM and ERP integrations.

Oracle made the leaderboard again this year, and according to Gartner's latest "Magic Quadrant for Sales Force Automation,""Oracle Siebel CRM continues to have the broadest set of functional footprints for SFA [with] proven, deep, and broad sales functionality" for multiple industry verticals in large-scale enterprises. Although Oracle continues to score impressively for functionality, at 4.2, its challenge will be to execute on strategy and image. Success "will require some big customer wins and reference customers that are seen as market winners," Wang says.

SugarCRM was among the leaders for cost in the sales force automation category, scoring a solid 4.0. Because Sugar is inherently open-source, this is a good solution at times when "heavy customization is needed," Dickie notes. Sugar's launch of Sugar 7 has also added deep functionality for sales reps to collaborate around deals and visualize deals in real time. "Sugar has now reached a point where they are market-competitive," Wang observes. "The big IBM deal has put Sugar on the map as a top three contender with Salesforce.com and Microsoft."

The Winner

For the eighth year in a row, Salesforce.com takes the lead spot in the sales force automation category for its Sales Cloud application. This year, Salesforce.com integrated Sales Cloud with Work.com, a social performance management platform with embedded gamification features enabling sales managers to recognize, reward, and replicate strong sales rep behavior. This was the year Salesforce.com got serious about mobility, too, in a sales sense. The Salesforce Touch Platform was released, bringing deeper mobile app-creating capabilities to Salesforce.com and third-party developers. Running Sales Cloud on the Touch platform also enables reps to access the app from any mobile device. This year, Salesforce.com introduced Communities for Partners, private branded communities running on the Chatter enterprise social layer to power collaboration among sales teams, resellers, and other channel partners. With a whopping score of 4.4 for company direction, Salesforce.com "has the best vision and has done a great job executing," Wang notes.—Kelly Liyakasa

One to Watch

Zoho came close to the leaderboard this year, namely for its cost score of 4.5, settling in as the One to Watch. "Zoho packs a solid punch for the SMB market," Wang comments. "The cost structure makes it very affordable to start with a cloud operating system and end up with additional apps and a platform to build on top of." Because of its overall pricing structure and bevy of cloud apps, Zoho is "well received in the SMB space," Dickie notes.—K.L.

Incentive Management

The Market

Incentive management is a market that "remains viable," according to Joe Galvin, chief research officer and executive vice president of the Miller Heiman Research Institute. "It grows on a regular basis, and you have stable vendors that have been in it for a long time in one form or another."

After a number of major acquisitions in the incentive management market last year, vendors continued to evaluate ways to make sales managers and sales reps more efficient, with mobile features and deeper analytics. However, as Galvin points out, one of the greatest challenges continues to be encouraging companies to align their compensation plans with business objectives. "You can adjust and rewrite your [comp] plans, but once they're in tune with your business objectives, you can then apply the power of what incentive management can bring in terms of analytics and make more fact-based decisions."

The Leaders

Callidus Software is a newcomer to the category. Processing more than 723 billion transactions in 2012 with payouts of more than $44 billion, CallidusCloud scored strong in functionality with a 4.2. "We saw increased instances of multiproduct and cross-sell contracts," said CallidusCloud President and CEO Leslie Stretch, during a third-quarter earnings call. This year, CallidusCloud added a gamification platform, MySalesGame, which encourages competition and shared goals among teams to increase engagement, and ultimately, sales. Callidus, notes Ray Wang, principal analyst and CEO at Constellation Research, does "a good job on sales effectiveness," but "the platform is showing some age."

Softscape once again made it to the leaderboard this year. Acquired by human capital management company SumTotal Systems in 2010, as a unified whole, SumTotal "can deal with head count, salary planning, determining the impact of compensation, and merit planning," with analytics and planning capabilities that set it apart from providers that only "perform historical analysis," wrote Mark Smith, chief research officer and CEO of Ventana Research, in the firm's "Social Collaboration and Human Capital Management Benchmark Research" report.

Synygy made the grade once again and "still hits many of the short lists for Salesforce.com wins," as Wang says. Synygy entered 2013 fresh off the launch of Optymyze, a sales performance management platform combining data management, comp-plan management, and advanced analytics. Also developed was a sales analytics application designed specifically for touch devices. To top off a year of new product advancements, Synygy reported software licensing revenues that nearly tripled in 2012.

Now that Varicent is part of the IBM fold, it is one element "of a more robust suite of tools," says Jim Dickie, managing partner of CSO Insights. Varicent's scores of 3.8 for customer satisfaction and functionality indicate that the solution held its luster throughout the acquisition, which closed last spring. When combined with IBM business analytics that came through the acquisitions of Algorithmics, Clarity Systems, OpenPages, and Cognos, as well as predictive investments in SPSS, Varicent has a stronger foundational base of analytics.

The Winner

Hats off to Xactly, which steals the crown as category king for the fifth straight year. Taking the top spot for company direction with a score of 4.3, Xactly continued to impress judges with the product updates it has introduced. Last winter, the Xactly Express for iPad mobile compensation management application was launched for small and midsized businesses. On the enterprise side, Xactly Incent 8 was released, which includes optimization for cross-territory selling, enhanced work flows, and single sign-on across CRM platforms such as Salesforce.com and ERP systems. An Xactly Incent for iPad native application gives sales teams access to commission payments and performance metrics on the road. With a customer satisfaction score of 4.1, Xactly is "good for any size firm," Dickie comments. Moving forward, Xactly isn't only interested in sales teams. With Xactly Objectives, the company brings incentive management and variable pay capabilities across the enterprise.—Kelly Liyakasa

One to Watch

Excentive International was close behind some of the leaderboard contenders in the Incentive Management category, and "is still showing good momentum," according to Wang. This year, Microsoft selected Excentive to manage all incentive compensation initiatives for its direct sales and services employees across the globe, "which moves us closer to our goal of making North America our largest operation," according to a company statement. —K.L.

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