Last week at this time I was throwing my neck out there forecasting some of CRM's moves in 2009 - and no one chopped it off, thank goodness. So, now, in the same spirit, I'm going to do part 2 of three and stick my hands out to be slapped for the remainder of my forecasts for 2009. At least as of now. The third part which you'll see early next week will be companies to watch in CRM - large, small, known and unknown and what the pitfalls and possibilities are for them. But for now, let's dig into what else I have to say and you can kick my....no, slap my hands, if I'm wrong but not until 2009 is well underway. That gives me the chance to invoke the "Pundit Immunity Clause" - which states, "if I was completely wrong it was due to market conditions or you just simply misunderstood or hey, no one can predict the future." This gives me immunity from neck chopping, hand slapping, netherpart kicking and gales of laughter at me, as one forecast or another falls by the wayside.
Same format as last week. A 10 means the feeling in my gut that whatever got the 10 is going to be dead on and is going to be is POWERFUL. A 1 means the feeling in my gut is probably just indigestion.
Okay, let's rock.
- (10)Software as a Service becomes pre-eminent delivery platform for CRM - This one doesn't need Nostradamus to come up with it. Its almost too easy and is my "gimme" for this set of 2009 prognostications. For you left-brainers, it's bolstered by information released yesterday by Gartner that they've found that 90% of the survey respondents said they would maintain or increase their use of SaaS by 2010. The recession clearly is playing a role here with the #1 reason cited for using SaaS as "cost effective." Interesting, when it came to new deployments of SaaS they were mentioned with "replacement of on premise" as the #1 reason for that. This isn't a surprise and the indications are everywhere that SaaS and as we'll see in the broader sense in a minute, cloud computing, arent' just trends du jour. SaaS is the preferred delivery vehicle for pretty much every practitioner except those with highly complex implementations or classified data that has to reside on a home based server. While its not recession-proof, enterprise SaaS sales are expected, with the downturn, to be $6.4 billion in 2008 and jump to $14.8 billion in 2012. In other words, jumping up with CRM being its most visible application/service but with companies like Zuora, doing SaaS based subscription billing and payments, also integrated with salesforce.com and other enterprise functions becoming SaaS delivered, SaaS is a lock for next year as becoming the pre-eminent delivery mechanism for CRM (with the aforenoted exceptions). That said, the same caveat applies always. Make sure, if you're considering a CRM solution, which of the varying delivery mechanisms - on demand or on premise works for you. There. Consider yourself caveated.
- (7)Cloud computing becomes an increasingly important way of "doing business" and storing information - I can't say that I'm as certain of this as I am of SaaS. Keep in mind, cloud computing is web based computing and is not a delivery mechanism. It's more where you work and the impact it has on how you work. Your applications, your data - everything are accessed directly via the web. In other words, cloud computing is web-based,massively scalable technology enabled solutions and storage. Cloud computing seems to have its share of detractors, but more and more companies are getting on board, the latest Microsoft with its Azure cloud computing platform, which also fits into the PaaS realm too. So we have Google, Amazon, Microsoft, salesforce.com, and several others moving to become the cloud computing king with no one taking that ownership yet, and I don't forsee that happening in 2009 either. This is still an evolving field that has those who don't like it or who pooh-pooh it. This has a ways to go before companies and people are willing to give up the traditional desktop and the traditional storage devices - but there are strong inklings that due to cost effectiveness - something important in a recession, n'est ce pas - we'll see cloud computing gain a bit more of a foothold - but not ubiquity.
- (6)Platform as a Service and Open Source platforms becomes highly competitive and one of the core ways that CRM offers customization capabilities and architecture - Once again, we in CRM in particular and in the enterprise applications world, can't keep things easy. We have to complicate them. First SaaS, then cloud computing and now, PaaS - Platform as a Service. Another one I have high hopes for, but don' t think that it will particularly skyrocket in 2009. There is an increasing number of players, several of whom overlap with cloud computing leaders and several of whom don't. Salesforce.com is perhaps the most visible of the PaaS vendors and even gets maligned for "moving away from their core competency - CRM" to PaaS. I say, "bah humbug" to that. Back in 2003, I had a meeting with the then Chief Strategy Officer of salesforce.com, Tien Tzuo (now CEO of Zuora) who told me that the long term strategy for salesforce.com was to be the Business Web provider for all your business needs - this was the forerunner for force.com - their platform offering. So they are actually achieving their long term objective - and good for them. Companies who have provided platforms and frameworks tend to be successful. Rearden Commerce is a platform for customized business services built on a SaaS delivery model, for example. SugarCRM, while more a CRM application offered in both on premise and SaaS flavors, is used often as an open source platform, that's flexible enough to have industry specific applications and even another competing CRM product, developed on it. Force.com, the salesforce offering has multiple success stories to point to across the spectrum of the enterprise at both the vendor and practitioner level. Platforms have been around a long time but PaaS is something pretty new - and I think it has legs. In 2009, I think we're going to see more of it but not from a lot more vendors particularly. Salesforce.com, Google, Microsoft will be the predominant trio on the PaaS side while SugarCRM for the operational (and in later releases, methinks, some social) and Drupal for social apps will be the frontrunners for customer-focused open source platforms. (PG note - I don't like Drupal all that much but its got a LOT of fans).
- (7)Open Source continues a slow but steady penetration in CRM - though not many new players show up - This one will be quick. I really don't see a lot of players on the CRM side who are going to get anywhere or arise as open source CRM vendors. SugarCRM will continue to dominate but this is a small part of the wider CRM spectrum - enough for SugarCRM to be VERY happy, because of their clever and intelligent application of open source and a business model that works, but the competition with the pricing of SaaS and with some of the not-open source but highly flexible web based companies - particularly Zoho is enough to keep this a small but important part of CRM reckoning. No explosion, some growth.
- (7)Social characteristics join features & functions as vital pieces of CRM applications - identity, actions, reputation, influence, persuasion - My bud, Thomas Vander Wal, a Web 2.0 legend, pioneer in social tagging and folksonomies, has this important concept that he calls the "social stack." I prefer to take from the well and call what I take "social characteristics." These are things like identity, objects, actions in the biggest sense. The facets that matter the most (they all matter one way or the other) to CRM are the social characteristics identified as (and grouped by me as a single group) as reputation, influence and persuasion. Its easy to say that these have always mattered in company/customer relationships - because they have. But what makes "now" different from "then" is twofold. First, the predominant trusted source, meaning the one that reputation, influence and persuasion are the most germane to, is according to the Edelman Trust Barometer 2008 report, is "someone like me." That means a peer that is similar in belief and interests to you. Peer trust is no surprise with the proliferation of review and social sites that are powerhouses. More germane to this, is that these characteristics are now being integrated into social applications and Social CRM/CRM 2.0 applications via varying user generated content features like comments, ratings, rankings, etc. They are embedded in applications like Oracle Social CRM, SAP CRM 2007, and many others that come to mind. Salesforce.com's release of Ideaforce and its subsequent execution on MyStarbucksIdea.com are a great example of how this works. Oracle Sales Library which not only uses "best guess" kind of algorithms to help figure out what documents and presentations will work for a particular deal but takes into account the thinking of the "crowd" a.k.a the internal sales and marketing teams thinking, ranking and comments around the materials available in the knowledge store of the company. Social network analysis (as opposed to social networking development) tools are becoming available to find out who the true influencers are in a company or any sort of network through rigorous algorithms that take these right brained characteristics into account. For example, companies like Visible Path as far back as 2004 integrated social network analysis with CRM applications like salesforce.com (VisiblePath is now owned by Hoovers). More recently, we've seen the emergence of up and coming companies like Batchtags, creator of Tripledex, which is a web based visualization tool that not only defines relationships and the influencers and importance of the relationships between people, products, events and organizations - in any combination, but has a unique interface that actually makes it look like something a human can use. This is the new generation< The integration of social characteristics is not some esoteric addition to features and functions of CRM or CRM 2.0. It is something that, at this stage through user generated content functions, we will see increasing exponentially in CRM applications or in requirements from practitioners in 2009 and will be nearly ubiquitous by 2011.
- (9)Authenticity and transparency will become strategically important to companies - Funny that I'm making some really right brained forecasts in this "segment" of my forecasts, isn't it? But the reality is that the morphing of CRM is based on the transformation of CRM from an operational and transaction system to a system that extends to interactions. CRM applications become engagement toolsets as well as management tools. But that transformation doesn't just sit in the customer applications world - it is part of customer strategy in an era where the business ecosystem is owned by that customer. That means that there is a business model transformation that is not only theoretical but is being taken actively either under advisement or being executed by companies around the world - and that is the need for authenticity and transparency. There's a lot of extant literature about these topics - authenticity is best defined by Joe Pine 2 & James Gilmore's "Authenticity" - and there is an excellent article on transparency by Lauren McKay in CRM Magazine's December 2008 issue.That's my way of getting out of a lot of links and detailed examples. But the trend itself couldn't be clearer than it is. Companies are being required by customers to be responsive and open. They want to the companies that they deal with on a regular basis to be straightforward about their problems, not push marketing hype or bad explanations at them, provide them with what they, as customers, need to make intelligent decisions about their transactions and interactions with the company. Effectively we are not only looking at a social customer - one who is proactively involved with his or her peers and wants to be involved with the company the same way, but the idea of the "customer as partner" not "object of sale." That means that the way that a company differentiates with a customer in the 21st century is not just products and services, but visibility into the information that customers need and an honest, straightforward relationship with those customers. That resonates and as you will see if you read Pine's book or read Lauren McKay's article, it works. During a recession, this trend will only increase as companies who are honest with their customers and let them in will survive at least and prosper at best, while companies that don't, won't. Watch for more and more customer strategies based on this in companies. I'll let you know how I'm doing with this one - since its kind of almost unprovable - in midyear some time.
- (9) Growth in the public sector for social CRM continues in the face of recession - use of social tools accelerates rapidly in the federal, state and local government in the U.S. and elsewhere - This one is almost a no brainer. First the logic. One of the primary ways that 2.5 million jobs are going to be saved or created is through federal programs that will build national infrastructure (this is of course in the U.S. only I'm speaking of here - so pardon my American-centric view on this one). We just elected a president who not only was elected in part because of his sophisticated use of social technologies (MyBarackObama.com) but is changing how government is going to work by unprecedented constituent access through social tools/sites like change.gov and by outreach through Facebook, MySpace and Twitter. Additionally, there is a lack of confidence in U.S. government institutions that has been long standing but is now at unprecedented levels (though hope has increased in recent days) so one of the core issues that administrative, legislative and executive agencies in the government has to deal with is constituent engagement and, because of multiple other issues, constituent management (e.g. the U.S. Congress's universal freakout over how high their email volume is can be almost laughable at times - though is sad, given that their method for dealing with it, even a year ago, was constituent avoidance). At this point agencies are looking into using or using social media and social networks on the one hand and CRM tools on the other - thought they don't see the connection. As CRM vendors and social software/tool vendors begin to integrate their offerings, the convenience will be obvious. In the meantime the cobbled version will be what predominates - the initiatives will be tactically separate but strategically coherent - built around constituent engagement and managing that engagement. For example, the use of social media abounds throughout the federal government - for example, last week the State Department announced a social networking site.We are seeing a redefinition of the idea of public/private partnerships with outreach between government agencies and existing social networks/communities - especially advocacy communities which have been historically at odds. So this year Care2, with its nearly 10 million members and the National Oceanic & Atmospheric Agency (NOAA) linked up in a joint initiative around saving the Coral Reef in the International Year of the Reef.It doesn't stop there. If you want to get a more global (and more comprehensive) view on the burgeoning use of social media/networks in the public sector go to my article on it at InsideCRM. Or take a look at this newly launched public sector social site aggregation done by BearingPoint that they've called GovTwit, much to their credit, to see which agencies are using social media, with an obvious emphasis on Twitter. On the CRM side of the equation, there is a somewhat slower but continuing movement toward utilizing hard core CRM or sometimes "case management solutions like those from Adfero as substitutes. But companies like salesforce.com, Oracle, RightNow and Aplicor have been making major progress with government agencies in the last 12 months, as the interest rises in how to manage what is unprecedented participation of citizens in the activities and direction of government. What this means is that you can look for both interest by the public sector in CRM and social initiatives to increase - the latter faster than the former, but the connection between the two around constituent engagement strategies to be remain hazy except for the most forward thinking of public sector officials or employees. I have a few names of those if anyone is interested.
- (100) Yankees will win the 2009 World Series - I'm certain of that because I root for them and fanboys like me are hard to convince otherwise - and, the old saying goes, "every year is a new year." So take that every other teams fans. This is my blog so I'm saying it.
There is so much more I can cover when it comes to CRM 2009. Tell you what, ask me some questions or tell me what you want me to discuss and I'll answer those questions. Ask them here or ask them on my other blog PGreenblog or email me at email@example.com and I'll answer them, Karnak style, on this blog.
Two more things in brief.
First, note that I didn't predict the size of the CRM market. I have no idea what it will be in 2009 and the recession makes any possible forecast for that even murkier though I think it will grow slightly from what it is. But there are no numbers for me to tell you or back that up.
Second, part 3 is going to be on companies that you should be watching next year and for some years later - though all that I say will not be of the "Oooooo, aren't they great?" variety. Some might even be, well, critical.
Actually, third thing...I invoke the Pundit Immunity Clause.