We're heading into the forecasting homestretch now. You've seen what I'm thinking 'sup for 2009 with this post, this post, and this post. Now we move onto the final one or two or three (we'll see how long I can go writing each one before I get tired or sick and tired). This round is the companies that I think you should be watching in 2009 - the ones that will make an impact. They might be the long established industry denizens like Oracle, SAP or salesforce.com, or NetSuite. They might be newcomers - none of whom I'm going to mention until I get to them because I'd take away what little surprise I can actually provide. But, if you have ANY interest in CRM whatever or you're a technology wonk OR you're an analyst of something other than my mental and emotional state, then check these fair citizens of CRM out. This won't be a "wow, they're just so great" list. Each of these companies is worth a subscription so to speak but they have their flaws. Oh, several of them are or have been paid clients of mine. Take my word here, that didn't get them in there. Several other of my present and past paid clients aren't in here. In fact, most of them aren't.
Just a bunch of FYIs. I've gotten a lot of inquiries in the past few days about checking out so and so's company for the Companies to Watch for List (upwards of 30 inquiries in the last 5 days actually). Just a note to y'all. Either I've had you on my radar for a YEAR before you make this list OR you've made an impact that is so strong that I've not only noticed it but made the inquiries and met the people and did the demo and independently of you knowing this, talked to your customers, etc. If you're contacting me now - you're out of luck for this list. However, I will be announcing a "Visit at the MidYear" list at the end of these postings, naming a few companies that interest me but are not on the watch list yet. So keep the cards, letters and emails coming. I'll do my best to get back to you asap. But forgive me if there's a few days lagtime in my response. I'm swamped. Really. I swear.
Industry Giants - The Obvious
- Oracle -One of my new years resolutions is not to start everything on Oracle with "I never would have thought I'd be saying this but Oracle...." and then saying something good about them. They've now been good for a long time and don't really (at least when it comes to CRM) need the qualifer. But, then this is still 2008, so... if this were a year and a half ago, I wouldn't have made Oracle one of my top "companies to watch for 2009" because I had nothing but contempt for them, but I have to tell you, despite some remaining weaknesses, Oracle might turn into the company to beat in 2009 when it comes to CRM 2.0 or as they insist on calling it, Social CRM. They have the clearest vision in the industry, thanks to the leadership of Anthony Lye, an underestimated industry intellectual and have an extraordinary CRM team to back that vision up ( n.b. FYI, I'm not saying this about any other division of the company at this juncture. We are speaking strictly CRM here. I still have serious problems with Oracle's overall culture, though there are some signs it's changing.). Their crystalline vision is built around a mix of Enterprise 2.0/Social CRM. That means it's driven by "the company's response to the customer controlling the conversation" and the impact of consumer thinking as it penetrates the business environment. They have a road map that adheres to the vision. They understand the value of thought leadership, not just market share. Their Social CRM applications are well thought out and they've made some serious progress with them. As of now, they have 3 that are at least maturing, if not fully mature. Sales Prospector, a social sales analysis that takes internal and external factors into account to determine the probable success chances of a deal based on both past customer success and external events and information pulled in. This is their highest risk application, because it depends on actual results with specific numbers that can be easily seen for being accurate or not. Sales Library, my personal favorite, uses social tools and user generated content like comments and ratings to pick out the best guess presentations and documents that a sales person would need to take to a prospect or client to close a sale. They also have another slightly more amorphous application called Sales Campaign. In addition, they are making huge progress in conjunction with L'Oreal on a more consumer focused social CRM product. It would allow mobile sales and mobile "someone like me" rankings, ratings and reviews of products that a customer might have an interest in. This is an iPhone application, a mobile platform that Oracle has a surprising and strong commitment to and that they nearly stand alone in terms of depth. At this stage, their Blackberry commitment isn't that much to speak of. Finally, the undeniable. Siebel is just simply a flagship product for CRM and always has been and with their acquisition of Siebel, the flagship becomes Oracle's. The recently announced Siebel 8.1.1 takes Siebel a magnitude forward. If you want to read more about that, and Oracle Social CRM for Sales "gadgets, read here. Oracle is one of the three contenders for next year's top spot - if a "top spot" exists - and might even be the favorite at this point. Their announced going forward efforts will be in the mobile and on demand realms, so we'll see how they deliver on that in 2009. The weaknesses? They have two. Their customer service applications from the social side are nothing to speak of at this point, though they have a commitment to changing that. Its just a matter of time before we see customer service apps that are meaningful from them. In the interim, they have a relationship to Helpstream, another company to watch, that probably has the paradigm customer service 2.0 social CRM application (to throw all the cliches into one line), which is at least an interim until they get their own or whatever Oracle does there. Their biggest detriment is the bigger company's sales driven culture. I've seen little evidence of a universal customer driven corporate culture there, though the CRM group's singular culture is highly customer driven. If the company wins out - well...I'll have to break my 2009 resolution. But there are signs that the CRM group, especially now that we are in a recession, will influence the company more than it will be influenced. I hope so, because the commitment, passion and production of Oracle's CRM applications promises nothing but goodness in the year ahead.
- SAP - For very different reasons, this was another company that 1.5 years ago, I would never have included in a CRM leadership category despite their announced sales of CRM applications software. The application was kludgy, an afterthought to SAP ERP R/3 iterations of one form or another and it was ugly as sin. But I always liked the company, despite some notable tightness in their approach to business and life. I had seen it make some significant changes in its culture over the years to its benefit. Though Shai Agassi left, his contemporary thinking was still alive in larger pockets of the company. SAP Labs was doing some incredibly cool, though not very public things, such as combining structured and unstructured search and building some eminently readable reports. They limited it, at the time, for internal use (now part of their product engines) and all in all, they had a shot to be sumpin', sumpin'. But SAP CRM was just so....bad. But then, (crank up the music, turn on the lights, set off the fireworks, start cheering) along came SAP CRM 2007 with a new Google-like very clean and attractive interface, the ability to develop and use enterprise mashups as widgets, improved useful functionality. The strength of this interface was so apparent to SAP that they announced that it would be universally applied to all SAP products across the board. And, wowzer, there is the promise of changes that are considerably more substantial than just CRM products. As great as the transformation of the CRM product has been, the fast-moving cultural shift across significant parts of the company - though not all of it - is even more remarkable - and is not temporary. This cultural transformation is tipped off by a couple of things. First, SAP's unique approach to thought leadership, which is unparalleled in the industry. Second, the penetration through at least some of SAP's pores of a collaborative culture - one that other 21st century businesses can learn from. As far as thought leadership goes, SAP has invested in creating a "Business Influencers Group" that has some 60 employees or so that has the sole job of finding, reaching out to and engaging in some way, business influencers in the analyst community, academic world, etc. This group is astounding in scope and capability and I think unique in the world of enterprise applications - perhaps IT in general. It is ably run by VP Don Bulmer. To add to this, they have a VP, Mike Prosceno, devoted to reaching into the blogging community for similar purposes. SAP's commitment to mind share, not just market share, is genuinely staggering and entirely commendable. One example of how intelligent their approach is - they have initiated a series of webinars and forums on business leadership for the recession - what to do. This is not a "Buy SAP" thing. This is a "listen to business leaders on how to approach this downturn" thing. This is being done through their external facilitated social site, MyVenturePad, run by Social Media Today's amazing Robin Carey. The other indicator of culture change - beginning in and around their CRM and mobile apps groups - was the development of their the mobile SFA application for the Blackberry. Not only were they collaborating with business partners, in this case RIM, and customers to develop products, but were willing to cede some control to those business partners and customers in order for all the participants to benefit from the value creation. Would that others would emulate this...sigh. The result was one very strong mobile CRM product (soon to be released). This is the best CRM application I've seen for the Blackberry to date. They don't just talk a good Web 2.0 game either. They live it. They have two communities, SDN for developers and BPX for business analysts (in the process sense). They use all the social media tools. Are there problems with these social sites. Sure. But the scale is mindblowing. BPX is 350,000 and that's the smaller of the two. SDN has 1.3 million developers engaging in collaboration and discussion. Innovation has been on their agenda too with both an internal industrial-strength Twitter-like product called ESME (enterprise social messaging experiment) something that ZDNET enterprise app guru Dennis Howlett was very involved with - and with a customer service 2.0 application that combines SAP, Business Objects application Insight and Twitter to come up with a customer service Twitter chatter monitoring tool. It not only locates the Twitter complaint or discussion about a flagged product or issue but also qualifies its emotional level (from love to hate or 1 to 5, so to speak) that, depending on the seriousness of the problem, will trigger specific workflow to alert the appropriate customer service "authority." These are huge leaps forward, which I presume, will be eclipsed in a good way by the upcoming SAP CRM 7.0 when it's released in 2009. But there are several things that could stand in SAP's way in 2009 too. Their CRM vision remains murky at best - murky enough that if I ask you what that vision is, you wouldn't be able to tell me, would you? That needs to be fixed now. But that's not my primary concern. What is most disturbing to me - and their greatest impediment - is their falling further and further behind with the Business By Design business - whether they are falling behind by design or not. When they announced what would amount to an 18 month lag to this SaaS based offering back at 2008 Sapphire, I thought that was a serious mistake. I still do, but the way they are dealing with that is almost worse. Now they are saying that they're concerned that BBD would be too expensive to them - via the loss of on premise revenue and according to Prashanth Rai, reporting on the late November Leo Aptheker attended SAP NY Roundtable, are almost pooh-poohing the importance of SaaS . Thing is they need to release it as soon as possible because in a recession, SaaS is going to rule the delivery roost and SAP will suffer if they don't release a SaaS product. Their hiring of John Wookey, formerly of Oracle to run their SaaS enterprise offerings is a good start - but that's what it is. A start. For another take on Business by Design, see Josh Greenbaum's posting last May. Despite these issues, I expect that that SAP will be among the 2009 CRM 2.0 and CRM leaders with a brand new look and their remarkable thought leadership power.
- Salesforce.com - They have been genre-benders, innovators, and a marketing machine par excellence for the past eight or so years. They've planned on being the "Business Web for all your application needs" since 2003 and they have rigorously followed that path with their recent emphasis on Force.com a.k.a Platform as a Service and their drive around cloud computing. They win awards for what they do with incredible frequency including my 2007 Steppin' Out Award as the company in CRM that made the most impact in 2007 - out of a total field of 82 companies and a finalist group of 6. They even have an excellent core sales force automation product with the AppExchange ecosystem, which they call "the ebay of business software" (pretty accurate) to support their platform in the style its accustomed to - especially when it comes to fililng out the traditional and not-so-traditional pillars of CRM. They have proven to be, as Denis Pombriant identified them back in the beginning, a "disruptive innovation" with their on demand subscription model. They have proven the scalability of SaaS with the first real large enterprise deployments at SunTrust, Merrill Lynch and multiple other multi-thousand seat deployments. They are truly an industry giant, even though they have by far the smallest revenue of the Industry Giants listed here. This year, salesforce interwove Web 2.0 functionality into their applications with their Facebook and Amazon services integration. Since 2007, they productized their community, IdeaExchange, and its now being used by successful UGC-driven sites like MyStarbucksIdea.com. Their vision (not their CRM vision per se) and road map has been as clear as can be. They want to be the the leader of the platform as a service market, and unlike Larry Ellison, Marc Benioff has embraced the cloud. This past Monday, they announced, among other things, their integration with the Google Apps Engine. They are a force (not .com) to be reckoned with. They've even made force.com, at least as of Monday, cross-platform compatible beyond just Google. As my colleague, buddy and leading industry analyst Denis Pombriant says, "this is cool stuff." But even with all this love, I'm concerned about two things. With their growth, their apparent rate of innovation, something they have been known for since their inception, seems to have fallen off. Just to stop some of you right there, I don't call cross-platform compatibility innovative. I call it shrewd, necessary and smart. But not innovative. I say apparently fallen off, because I'm assured by several senior management folks at salesforce.com that this isn't the case - but I have to see that before I change what I write. If they are innovating and its not obvious to people like me, then the tree falling in the forest becomes the problem. Who knows they are innovating if there is no way to tell. That said, this isn't my major concern. They have had one significant weakness for a couple of years now that they seem to have made no effort to correct and, in a world where the customer demand exceeds the grasp of any one company, it is a serious, short-sighted mistake. I'll explain. As you know, it is remarkably difficult for a contemporary company to fulfill the complete and voracious needs of the social customer that is so empowered now. Consequently, it is more and more the case that partner ecosystems, not just a channel, need to be created to manufacture the appropriate environment that customers need to complete their personal agendas with a given company. No longer are just products and services provided sufficient to satisfy customers. What that means for the partner channel is that needs to morph into something far more complex than it has been in the past. It needs to go from a channel to an ecosystem. Microsoft, for example, with some holes, gets that. There is no one kind of partner anymore. Salesforce.com, of course, has its partner ecosystem in the AppExchange - which is both its strength and its weakness. The value of AppExchange is undeniable. A partner ecosystem that allows the partners who create applications on the salesforce.com platform to benefit from salesforce.com's industry presence. The partners for the most part operate as ISVs who develop the apps and then sell them on the AppExchange market for a subscription fee on top of the salesforce standard pricing. That's great. But where there is a weakness is something that I've heard complaints about and seen in action personally. Salesforce.com, for the most part, seems unable to distinguish between a strategic partner and an AppExchange ISV partner. They try to reduce ALL relationships to AppExchange applications. Want to partner with SFDC? AppExchange app. I've witnessed this approach personally twice - when two companies that clearly would have been strategic partners were told to "build an AppExchange app", instead of what should have been a more substantial (and, at least from what I could see in the case of one of them, a highly beneficial strategic partnership) discussion. I'm not only a witness to it but have heard it from put-off potential partners too often to dismiss this. This is something that needs to be fixed and asap. I don't doubt salesforce.com pre-eminence at all. I love the company for the most part and have enjoyed knowing the senior management and staff there I know. I think they are innovators and industry leaders. But they are running into competition now in areas that they owned and they have to step it up this coming year. There are things there that I'm hearing that make me think they will. I'm betting on it.
- Microsoft - Case #1: Microsoft Dynamics CRM 4.0 was a major, important and smart step forward for Microsoft. When they announced it at the Worldwide Partner Conference in Denver in 2007, they also announced their software + services initiative and their "single code base" approach for the on premise and on demand version of Dynamics CRM. Additionally, at the same time, they announced aggressive pricing for the on demand version that was so aggressive that it could catapult them into competition with salesforce.com. It was exciting. Very exciting. Brad Wilson, a 4-time winner of CRM Magazine's award for one of the most influential in CRM, drove the initiative and remains one of the smarter leaders in the field. The momentum was there. Then it died. Case #2: I sit/sat on the Board of Advisors of Microsoft Surface, the multi-touch technology platform and device that Microsoft announced at the end of 2007. This was innovative, valuable technology and at the time they were planning it, Apple, via the iPhone and a couple of others were in the arena, but not many else. They had some real possibilities of momentum here. Then it died. Case #3: The push around Social CRM/CRM 2.0 is in full swing. Microsoft was positioned well with 1. their cash 2. their entry into cloud computing with Microsoft Azure(see ZDNET blogger par excellence Mary Jo Foley on this) 3. the software plus services on initiative; 4. a very strong CRM ISV program - with some remarkably cool and useful 2.0 applications built on the Dynamics platform from their ISVs. They had a great chance to seize some serious market momentum around CRM 2.0. They didn't. Case #5: At the 2007 Copenhagen Microsoft Convergence last year, they announced an aggressive focus on industry specific applications for their Dynamics CRM efforts with aggressive support for their partners. Unlike anyone else in the industry that I've found, any partner that developed an industry specific on demand CRM application and hosted it, would be able to keep most of the revenue from that. No one else does that. NO ONE. What's happened to that? I don't know. What I hear about innovation at Microsoft, for example, is either through conversations I initiate or by reading a Fast Company article on the iconoclastic Gary Flakenstein, from Microsoft Live Labs. Or something on Ray Ozzie leading Microsoft into the promised land. That's about it. This is a company who could be at the top. They have a solid application with Dynamics CRM 4.0 - aimed at the small and mid-sized business market - with SFA and customer service as functionally good as you can get. Marketing functionality is average but is as good as anyone else's - marketing automation 1.0 or 2.0 is weak for the most part when part of a CRM suite. They have a terrific operations guy with some strategic smarts in Brad Wilson. They have a great staff. Their PR agency is good. The strength of their partner ecosystem and ability to manage the most complex and largest partner ecosystem (not a channel in their eyes) in the world - over 600,000 partners of varying stripes and hues is superb. They are the best at this bar none.But they seem to lack two things - and they are severe lacks. They have NO apparent coherent vision whatever. My complaints about SAP in that regard pale by comparison here. If you can give me a clear CRM vision, - a semblance of any CRM vision, please comment somewhere on it. I scratch my head to baldness on this one. Not only that, they have no real CRM 2.0 strategy that I can see. They claim collaborative "stuff" with Sharepoint. Let me say this. Big installed base or not, Sharepoint is NOT, I repeat is NOT, a very good product and lacks the elegance and flexibility that is needed in the collaborative platforms of this era. No more on that now. The second problem is their constant long standing one - one arm has no idea what the other is doing. I always hear "oh, well, they're a very big company." Nonsense. So is Oracle and SAP and that isn't the universal complaint about those companies. This is something that needs to be addressed.They have a great foundation to succeed and as a person who has been a supporter of theirs always, I hope that 2009 is the year they get it together. They've made themselves a player in CRM over the last few years. They've even started to catch up in the on demand side and made a firm commitment, rightfully to the cloud. Now is the time for them to step up with a vision - and make sure that other parts of the company, the industry and the general public knows about it. I'm presuming that there will be a Microsoft Dynamics CRM 5.0 this year with some social features integrated and community-based functionality. Just don't claim that Sharepoint integration is the answer to that. They're better than that.
Next Up: The Industry Giants - New Adults on the Block (Hint: Think Cisco and IBM. BIG hint.)....and more. Stay tuned.