So far, here's what we have.
Now we get into the hardscrabble stuff. The winners reviews in their sort of appropriate categories.
Today, we start with the generalists. These are the ones who provide more than just one of the pillars of CRM (sales, marketing, customer service) and, in two of the three cases, CRM itself is just one of their offerings in a larger enterprise suite. Interestingly those two, Infor and NetSuite both apparently are reinvigorated about CRM and are pushing it a bit more forward as a lead element of their enterprise suite - though I'd say this was the case more for Infor than NetSuite.
In any case, all three of them - the two aforementioned and SugarCRM deserve their Watchlist winners status and I'm now going to tell you why - and what they need to do in 2012 to be winners in 2013 too.
SugarCRMThere's this song from, I think, the 50s that has lines that go, "What a difference a day made. Twenty-four little hours." (thank you, Dinah Washington) In the case of SugarCRM, I'm modifying the phrase (which totally ruins the song) to "what a difference a year made. Twelve little months."
A year ago, I included SugarCRM on faith because they actually fell below the threshold I had established to be a winner (for example, if they had done the same this year, they would be down and out without any recourse to me). But I trusted their company, their leadership under Larry Augustin and their product to pull the company through - and damn! Was I ever right. This year, they won easily, guaranteed winner, no judgment necessary and I was tougher by FAR than last year all in all.
What did it? There was a lot to like.
- They increased their revenues quarter over quarter consistently and without massive fanfare.
- They hired CRM thought leader Chris Bucholtz to handle their thought leadership both insuring that there would be a smooth transition from the excellent Martin Schneider (who is now back as an analyst and director at the 451 Group - making the analyst world a better place) and at the same time, would provide a new, important, refreshing and definitely humorous approach to thought leadership from a vendor.
- They regularized outreach to the analyst and journalist community so that it was frequent, with five or more briefings a week. This was also manifested by their first ever analyst day at their user conference SugarCon 2011 which preceded the general conference, introducing such star influencers as Josh Greenbaum to SugarCRM, a company he hadn't known in the past. They are not one hit wonders either. It will be a part of the 2012 SugarCon in April in San Francisco.
- They hung in tightly on their theme for 2011 when it came to product development - local, social, mobile - adding full social integration with multiple vendors, notably InsideView (who made my "we'll see in 6 months" list this year), providing a free basic version. But more than that, they integrate with the consumer side social networks like Facebook, Twitter and LinkedIn, collaboration platforms like WebEx, GoToMeeting, and LotusLive (now called IBM Social something ungodly long or another). Also GoogleDocs. Plus their development community has over 1000 extensions listed on the Sugar Exchange for any other possible integration you could imagine social to back office. They also are available on mobile operating systems like Apple's IOS, Blackberry and Android. Given the more recent prominence of Windows 7 Mobile and especially the Mango "edition (version 7.5), they would be wise to develop an integration with it also. Their API is open and it is a well-constructed API that has a lot of support at the company itself so that developers and other companies that want to integrate with SugarCRM can with relative (emphasis on relative since its never that easy) ease. They still have their free Community Edition for those who want something basic AND they can be delivered any way you want from on premise to hosted to private cloud to public cloud - with any commercial cloud provider that interests you. A vastly "democratic" product. Which has its upside and simultaneously, could be the cause for a bit of concern, as I'll explain later.
- They moved away (finally) from using Open Source as a differentiator to just seeing themselves as an open company. I've always maintained that the actual benefit of the open source moniker to a vendor has been that it reflects a license and a culture. It certainly is also an approach to a development platform initiative, but that tends to be meaningful to developers not line of business owners - the ones who will buy SugarCRM. SugarCRM seems to have come to a similar conclusion.
- They've completed their 2010 initiated drive to move from a direct sales company to a channel sales based company. They have 350 channel partners under the SugarCRM Open + Partner program, a huge leap forward from where they were last year at this time. Those partners are now driving around 75% of the total revenues of SugarCRM. This was not an easy leap and one I remember questioning at the time they announced it. Oh me of little faith. I was wrong and I'm happy to say that.
But the biggest change from 2010 to 2011 was the extension of their strategic alliance with IBM.
This was a big one. A real big one. This was critical to SugarCRM because they had made a decision to move from their comfort zone which was the small and mid markets to start attacking the enterprise. They did this in the exact same year (2011) that multiple other companies announced the very same thing - NetSuite and Microsoft (around Dynamics CRM in particular) among them. The alliance with IBM positions them to piggyback into the enterprise with IBM. Something critical to them.
I had the opportunity to speak with CEO Larry Augustin, CTO Clint Oram, and IBM's Sean Poulley who drove the alliance (at the time he ran Lotus a.k.a. IBM Collaboration) all at once for about an hour at Lotusphere last year. I wanted to gauge the seriousness and the depth of the alliance. I wanted to see if this was a partnership of equals or a one-sided kind of thing. The former would work, the latter would fail.
Make no mistake about it. That conversation and subsequent investigation clarifies that we are dealing with a partnership of equals here. From my standpoint, this alliance is needed as much by IBM as it is by SugarCRM -for different reasons. In SugarCRM's case, it is the needed tutelage and investment to help them step up to the enterprise. In the case of IBM, they have been woefully deficient on CRM applications despite their acquisition of Unica, Coremetrix, SSPS etc. So deficient that for this and other reasons, IBM only made my "check with them in 6 months" list this year.
But that also brings up my biggest concern about SugarCRM. The IBM-SugarCRM alliance, as important as it is, is nowhere near sufficient to support their leap into the enterprise. That is another toolset, experience and skills level, approach to messaging, level of product and even public image. It's another kind of partner.
What SugarCRM has to address in 2012 is how do you do all this (and make no mistake about it, they have to do it in 2012) and not lose a significant portion of your existing customer and future prospect base?
I think they are aware of this, at least in part. I know that they are changing their messaging to reflect not open, social, mobile which was fine for 2011 but to SugarCRM solving business problems of their users. This is an important step in line with three things:
- The maturation of the marketplace from a heavy focus of proof of concept social to seeing social channels as just another set of channels that are part of a strategy for multichannel customer engagement.
- A reflection that customers don't care about the tools, but what the tools can do to help solve their business problems and concerns - with a favorable result. I'd be considering jobs-based thinking here. (More on that later in the year from me and others)
- It is an indicator that they are aware of the concerns of the enterprise, which are different than the concerns of the small, and medium sized business.
But it isn't enough. SugarCRM needs to consider a few things in 2012 to start transforming themselves to an enterprise-focused company; among them (but not exclusively)
- Do they have sales people who can handle the enterprise?
- More importantly, do they have partners who can handle the enterprise - from sales to implementation to maintenance? Of those 350 partners, how many of them can truly sell into the enterprise.
- Can their products evolve sufficiently to handle the scale of the enterprise?
- If they aren't going to throw away their existing SMB customers, can they handle the messaging that supports each customer/prospect set without damaging the other?
I could go on but I won't. This should give you some idea of what they need to address.
SugarCRM is a company that has a lot to be proud of. What they did in one year is remarkable and only bodes well for their impact in 2012. But at the same time, 2012 is the year that SugarCRM needs to transition to the enterprise. They can do it with the help of IBM but not on the backs of IBM. Do I think they are capable? Hey, they won this year didn't they?
InforWhere in the world has Infor been? When I scored them for the 2012 Watchlist, they scored up in the guaranteed victor range. Yet a year ago, I heard of them and I knew they had Epiphany's customer interaction engine but that was about it. Now, I'm excitedly awaiting validation in 2012 for my choice of Infor as a winner of the CRM Watchlist 2012.
This is not a slouch of a company. First, they own what I've always considered one of the Hall of Fame CRM products - the Epiphany Customer Interaction Advisor. When Epiphany (which unaccountably used to spell it E.piphany) was doing its independent thing back in the earliest part of the millennium, they were kicking butt and taking names on a regular basis. Then a strategic misstep and the next thing you know, they are owned by SSA Global, who completely screwed the product up and buried it in their offerings so deeply that no one knew anything about it anymore. Then SSA Global was acquired by the $2.3 billion Infor - the best thing that could have happened to Epiphany.
Fast forward to 2011. George Wright, a very senior CRM veteran, with stints at Epiphany, SugarCRM, VirtuOz, who not only has the smarts, but also retains the enthusiasm for CRM (and is a cool guy to hang out with), comes in to head up Infor CRM as GM and SVP. This is just after Charles Phillips is ripped from Oracle to be the new CEO. There are decisions made to make Epiphany a great product again, not only with investments in R&D but also with a new strategy for the CRM offerings of Infor.
Infor had made the decision it was a product company - this was the overarching framework for their approach to CRM. To add to that, Infor decided to take the approach that somewhat resembled what CSC did on the consulting services side (see CSC review here) - a laser focus on specific verticals. In Infor's case, that was financial services, telecommunications, retail, hospitality and high tech. They focused on complex business problems in those spaces. As a result, for example, Epiphany not only was able to provide the engine, but specific solutions such as churn management for telcos.
But Infor didn't stop with just Epiphany. They offer a deep CRM suite - including Enterprise Sales and Enterprise Customer Service. Their crown jewels are in marketing - with Enterprise Marketing, Multichannel Marketing, Marketing Resource Management (via a very good partnership with Orbis Global) and their rather amazing E-mail Advisor, which at least with email marketing, provides real time offers and content optimized for discrete e-mails based on the dynamic activity of individuals.
More recently, they've begun to incorporate some social channels capabilities into their multi-channel marketing tools - which, while not cutting edge, are more than table stakes level, so more than adequate for customers who have the perspective of seeing that social is not exclusive or predominant, but another set of channels to engage your customers in.
It goes further than that. At Dreamforce 2011, they announced a significant partnership with salesforce.com around ERP and what they thought, at least, was the Marketing Cloud. Salesforce even invested some $ into Infor (though Infor is larger than salesforce.com). They're calling the joint integrated product offering "Inforce.com." I can't decide whether I think that's cool or tacky. J
Infor has other partners that show up with some real panache, too. Accenture, Capgemini, Deloitte, IBM Global Services, Hart-Hankes, Amdocs, Hewlett Packard and a myriad of others - meaning they get the partner "thing."
So what's the problem with this goodness? When the press say "Oracle and SAP better watch out for Infor," they mean Infor 10 ERP, not CRM. They mean Infor ION middleware, not CRM. They mean....you get the idea.
In the CRM world, few have Infor top of mind. They've heard of Epiphany, just not Infor. While Infor has a plan and they've begun execution on the plan, they still haven't made anywhere near the impact that they should and will be making in 2012.
They've done webinars, they attend conferences, they present, they reach out to analysts and influencers, they have a customer advisory board that not only gives them advice, but is an avenue and leverage for visibility as to the good work that they do. They produce white papers. But they still don't have the reach or exposure that they should for a company with 70,000 customers and billions in revenue and one of the best CRM products ever produced.
So what are the things that they need to do in 2012 to have the impact that I am convinced, with their outstanding team, they can have.
Broadly there are two:
- They need to develop and evolve a Social CRM product roadmap that redoubles their effort around social features and channel integration. They have one of the most robust traditional CRM suites with some real innovative capabilities thanks to the way that they have conceptualized Epiphany. Now is the time to move to a table stakes level of social component integration.
- They need to seriously increase the heat when it comes to outreach to analysts and journalists in the CRM space. First, by realizing that there is no distinction at this point - categorical distinction, that is, between institutional analysts (e.g. the Gartners, Forresters, etc.) and individual analysts (e.g. Esteban Kolsky, Brent Leary) and boutique analyst firms (Constellation Research, etc). Meaning that each analyst has to be evaluated independently. Second, recognize that some of the journalists out there are influential - e.g. the folks at CRM Magazine, Sift Media etc. As influential as an analyst. So they might need an influencer relations program under a single umbrella not three or four. Plan an influencer relations day. SAP and Microsoft do this with a great deal of success. Infor needs to. Among other things, of course.
Do those things and they are off to a great start. They already have so much powerful product and leadership capital in the bank that they will go stratospheric once they accelerate enough. That's why they are a Watchlist 2012. Because I think they will accelerate. Fast.
NetSuiteYear after year after year after year, this company wins a place on the CRM Watchlist. But how? They have an enterprise suite that has a CRM product but it's clear if you read their press releases, talk to their customers, and know their history, that the financial applications - more generally their ERP applications - are their bread and butter.
They still win because of the strength of that CRM product (they call it CRM+ and it is plus level) and its nearly seamless integration with that suite and because they have a real strong knack for making an impact even in a market that is not their central focus. But more on that and why later. What characterizes their CRM product is its solidity and, as a traditional CRM product that is designed as part of an enterprise suite - its completeness. So for example, not only do you find sales force automation, but customer service applications, marketing automation, partner relationship management, mobile applications, and a modicum of customer-focused analytics. This is the CRM Swiss army knife that is characterized not by continually developing new blades but by an ongoing commitment to better steel.
In other words, while NetSuite builds, buys, or partners reluctantly when it comes to shiny new product components for their ecosystem, what they do spectacularly well is extend and strengthen what they already have which is the core essentials.
But 2011 represented something a bit out of the ordinary for this company. First, they held their first user conference ever and managed to draw 2000 people - which is a spectacular number for a first effort. But the conference wasn't just a quantitative success, two new themes emerged. Social and enterprise. Not to be confused with social enterprise.
Let me explain, please.
Back in 2010, when I declared them yet again, a winner of a CRM Watchlist award, I said the following:
"...... I find nothing that indicates that social anything is a NetSuite priority - which in 2011 will start to hurt them. Again, social is now mainstream. Not marginal. Mainstream. Center. Middle. BIG stuff. They have to deal with this - and they may be but I don't know that. And find no evidence either."
Well, in 2011, they "went social", kinda, with a major integration with Yammer (another Watchlist winner) and a smaller but still significant integration with collaboration community platform provider Qontext. This combination was declared their "SuiteSocial" which, given NetSuite naming conventions, more or less works. Along with their existing sales intelligence focused integration with InsideView, they achieved what I would have to say in looking at it now, is a more than marginal but less than fully adequate table stakes level of social integration.
They also decided to go out of their comfort zone - the upper end of the midmarket - and attack the enterprise. (for more, watch this great interview by enterprise uber thought leader Dennis Howlett with NetSuite CEO Zach Nelson) This is a big step and one that I think they can handle though will place them squarely in competition with SAP. In the past, they manufactured their SAP competition so that they could have a big bad enemy. Now they don't have to manufacture them as competitive - because they will be. I don't question their desire and reasoning to go to the enterprise and scale up from the upper end of the midmarket. But I wonder if they are as ready as they could be? This is a question, not a pejorative statement. I truly don't know. Though I think they need to spend 2012 in part getting their operations, software, skill sets and messaging in order for this, if they truly want to attack the market that SAP, Oracle, etc are already in for a long time.
What they do as well or better than any other company that is of their size or even larger is market impact and influencer relations. This is largely on the strength of two of their actual human beings, even more so than programs. Those humans would be CEO Zach Nelson and SVP of Corporate Communications, Mei Li. Both of them are consistently in touch with analysts, influencers, journalists, and other thought leaders. Zach additionally focuses on customers and prospects and is a highly engaged, visible CEO who doesn't just show up for his own conferences to do something. Mei Li is loved by the traditional and new influencers who she spends the time with to make sure that they get what they need. NetSuite does what it promises. The force of the two personalities has great impact on their public visibility. Keep in mind one thing. To truly reach influencers, its relationships that matter. Mei Li and Zach Nelson in their different ways in their different roles spend the time to know who they are dealing with, not just what they are dealing with. Knowing only the latter is the biggest reason for failure of influencer relations at almost any company.
2012 is a vital year for them - a year where they have to be more than consistently solid and do more than extend. They need to concern themselves with a number o things:
- They need to assess their own readiness for the upmarket thrust to the enterprise. Declaring it doesn't make it so. They have a slightly different question set than SugarCRM does. In their case, do their sales people know how to sell into the enterprise? Can they develop the competitive messaging that gets beyond their generally immature approach to SAP who will be a genuine competitor if they get to where they want to be? Its no longer a nyah, nyah approach. Its true competitive differentiation - and they are starting long after SAP has been where NetSuite aspires to get. NetSuite has the advantage of being first to the cloud. SAP is now all in there but coming in now.
- For them, because of the excellence of their existing CRM applications, they need to focus a bit more on Social CRM from both their messaging and their application road maps. Integrating more strongly with social channels so that traditional actions (open case, generate lead) can be accomplished in response to an interaction in the social channels is a clear next step, as is the integration with stronger customer-focused analytics.
- They have to bring one or two more Mei Lis and Zach Nelsons into the fold. They have some strong personnel who might need to be doing more. I've got someone in mind but I'll keep that out of here. Their relationships with the enterprise level influencers like the powerhouse Enterprise Irregulars will be more important than ever in 2012.
- They will need to find a series of enterprise ready channel partners - perhaps the big consulting firms. That means they have to have a solid enterprise worthy value proposition for those potential big partners. They already have a systems integration partnership with Accenture. They need more Accentures.