Previously on CRM Watchlist 2013:
- CRM Watchlist Lifetime Achievement Winner: IBM Institute for Business Value
- The Sweetest Suites: Part 1 of 3 – salesforce.com and Microsoft
- The Sweetest Suites: Part 2 of 3 – Oracle and SAP
That finishes up the “Big 4” of the customer facing tech companies. Now we move on to the 3 other enterprise worthy suites that should make waves in 2013. Thing is, this is not a small group. For example, Infor is a $2.8 billion company that actually when it comes to straight revenue is larger than salesforce.com. So it’s a matter how to realize their potential for these three – all of whom made serious progress in 2012 and all of whom are poised for impact in 2013 – and should, even if they don’t take my suggestions too seriously, should still whack the landscape hard this year.
The thing is that when I consider what I want to write, I have to consider a lot of things. Many of them include the right brain of the impact equation. That means looking for not just holes, but anomalies and then deciding if they are going to be of any consequence and what that means to the companies that I’m digitally advising here. So some of this advice doesn’t meet industry standard lingo nor does it jive with what “advisors”, “consultants” and “analysts” are “supposed to do.” So treat it for what it is. My opinion – which while a defensible one – is still just that. An opinion. Use it or lose it but don’t abuse it.
Without further ado….
Practicality defines this company which is both a great thing and can sometimes be not so great. If there is one thing to know about Infor it’s this: they are far more advanced in the customer-facing department than almost any company on the Watchlist – and if there is another thing to know about Infor, it’s this – who in hell knows that?
This, if you didn’t know, is the company that owns and has revived to its greatest glory, Epiphany (thankfully, they took out the period – those of you who know what I mean are geeks indeed), which is what most CRM related analysts and industry watchers consider one of the greatest CRM/CEM and now SCRM/CXM (snarky I am) products ever.
Additionally, their 2012 release of Inforce Marketing, a product associated with Infor’s commitment to building on the Force.com platform (though mostly around ERP), was an important step. This is their first pure SaaS based product; for marketing – this coming from a company that had a pretty big marketing suite (all on premise) for the enterprise. So this eliminates a limitation that they had to some extent.
Infor, in fact, has been spending a lot of time on their customer facing applications thanks to the interest Charles Phillips in making the CRM-related products a strong part of the Infor overall growth plan. Epiphany, which has been around since it was part of an independent company in the 90s, has had the most benefit from this investment, with their Interaction Advisor being used as a core to build multiple products that are horizontally and vertically specific. Examples include a churn interaction advisor which uses their real time interaction engine to reduce Telco churn; their email interaction advisor which provides real time offers and experiences tied to email that takes into account the digital footprint of the customer as he or she acts in real time.
In December 2012, they made a not-very-surprising acquisition of the top flight Marketing Resource Management (MRM) company, Orbis Global, which, along with their standard Epiphany Marketing Suite and Inforce Marketing which incorporates some integrated marketing management (IMM) capabilities, gives them a place at the contenders table with Teradata’s Aprimo.
This company’s CRM practice management, led by industry veteran (and ardent Mets fan) George Wright, has done a great job of developing the products and the product roadmaps to reflect not just the trends that are out there in the industry. More practically, they are addressing the needs, the outcomes that are required for contemporary business by having what I will generally call incredibly savvy, sane and articulate product roadmaps. For example, they address social by not just integrating social feeds and allowing the employees to communicate with the customers, but by placing a premium on sophisticated approaches to personalization. They don’t have to talk about big data, because they already scale infinitely.
The problem Infor has is that it has an ERP company mindset. Given that this $2.8 billion company derives the bulk of its revenues from its ERP products and more of their 70,000 customers are ERP than not, that’s certainly understandable. But its bestselling software should have nothing to do with a company’s mindset. ERP companies grew to prominence in the early 90s and the culture was shaped by the general business cultures and requirements of that era. ERP is focused on automation and efficiencies, not interactions with customers. It was designed (and is designed) to solve problems that lead to taking costs out of systems and making processes more efficient and customizing rules that are built for specific companies and industries. The culture wasn’t focused on the 21st century’s biggest business questions – which are:
- How do I retain customers who have a much greater choice when it comes to selecting the products and services I provide?
- How do I acquire customers when there is all that choice and there is much marketing noise out there that I have to cut through just to get their attention? Plus they trust their friends more than they trust us?
- How do we address the demands of the customers given that they have dramatically changed under aegis of the contemporary communications revolution in the midst of a dramatically changing economy and social environment?
- How do we provide value to and get value from customers, given that what a business calls value and what a customer calls value are different?
Infor’s customer-facing product portfolio is aligned to these concepts. While I can’t reveal their roadmaps, suffice to say they are impressively complete and significantly attuned to the practical outcomes that the current trends both require and portend.
But it goes further than that – down to the heart of the company – its culture. Charles Phillips, the CEO who was the co-President of Oracle is bringing in a new collaborative culture to Infor’s 13,000 employees. As you can see by clicking on the link here, the culture of the company has been dramatically transformed. For those of you either too lazy to click (c’mon now) or just not interested enough, here are a couple of highlights in a nutshell.
- 250,000 emails went out to customers et. al. with individual executives contact information and encouraging them to contact any of them they want to directly – including Charles Phillips.
- There is a newly minted in house design agency to help make the software user experience something “organic.” (my quotes).
- There is an open floor plan to encourage collaboration and innovation with whiteboards everywhere.
But they are not perfect by any means, though their issues are not huge, either.
For example, their CRM marketing is actually very good and they do all the right things, but for reasons that I will call anecdotal, the CRM product suite doesn’t seem to be a big part of the Infor conversation, though it is a part of the Infor brand. Meaning, you have things like Inforce Marketing and Infor’s Epiphany Marketing Suite, but it seems to more a pro forma attachment than an organic part of Infor’s total offering. This isn’t a horrible thing, because the product offering and the practice there are so strong they can carry the conversation to a large extent by themselves, but it is something that has to be addressed. That can be done by dialing up the noise level so to speak – and escalating the visibility of the customer facing applications – in their own name (Epiphany) and in the name of Infor.
So what is it as a company they have to do this year to accelerate the pace of impact for Infor – especially in recognition of their amazing products with their superb roadmaps and their already clear knowledge that social capabilities are aimed at outcomes, not “wow?” There isn’t that much but what there is needs to be amplified considerably.
What they have to do
- Be publicly proud – Infor has been notably too humble about what it has and what it can do for its customers. Yet as noted above, they have arguably the best customer-facing product in technology history; an excellent CRM leadership team; a CEO who is devoted to investing in the company in the right way; an excellent relationship with the analysts and influencers that they interact with. So the ability to show their stuff – strut it a little (not too much) is important this year. That means more marketing dollars devoted the branding of Epiphany more tightly with Infor as a whole (e.g. a collaborative value chain, not a back office and front office) to the kind of outcomes-based positioning that shows the business benefits of the Infor overall suite – with customer-facing taking equal status with ERP and market research in areas that are germane to their offering. It also means going out there and competing as one of the Big 5 – which doesn’t exist yet.
- Provide customer-facing thought leadership on (legal) steroids – This is the one area that they haven’t done well in. They have the practice leadership. They have the technology. They have the vision. What they don’t have is the body of content that makes their case – via the external thought leaders and the internal ones. So, what they must do in 2013 is to dramatically expand their thought leadership efforts and start quickly. That has two aspects. Engagement of external thought leaders for creation of assets and get George Wright and other designated practice folks out there speaking and writing and doing videos etc. In other words, be VERY visible with a clear and effective program. With Infor, it takes a particular focus due to the way that they are using the Interaction Advisor – with both horizontally and vertically specific applications. So the thought leadership shouldn’t just be around industry wide themes (e.g. customer experience) but focused around some of the key verticals. Allocate the budgets and the time and do it.
If Infor does just these two things this year, they can take their place in not the Big 4 but in the newly minted Big 5 in 2013.
NetSuite is one of the companies that I’ve always gotten. They do the things they have to do to make the operational side of business work from end to end. They started out in 1998 as NetLedger which gives you a big hint as to what they started out doing. Clearly their entré into the marketplace was around financial software. But, over the years, their back office focus didn’t stop them from developing a world class operational CRM system that is used rather happily by their clients.
What has always impressed me about NetSuite is their amazing attention to the everyday details of running business operations. There may not be a technology company on the planet that pays attention as closely as NetSuite. In an example that I like using to show what I mean; if the VAT tax were raised by a ½ percent on February 1, by February 2, every NetSuite system that needed to deal with the VAT tax would have the increase incorporated into the system. While this is metaphorical, it is also what NetSuite does empirically when the changes to the details matters.
But that’s the tactical. Their strategic perspective has always been do what you have to do to grow steadily and be rock solid in your focus. So rather than the bells and whistles of “coolness” and rather than focus on a trend, other than SaaS, which is how they started their life, they focus on filling out the transactional and operational needs of their customers. Their approach is to make sure that the day to day is covered.
Now, a story.
Back in the mid-1940s, Army had a national championship football team. It was led by 1945 Heisman Trophy Winner – Felix, “Doc” Blanchard, whose nickname was Mr. Inside, was a fullback known for his work up the middle; Glenn Davis, the 1946 Heisman Trophy winner, was known for his speed and his ability to get outside the opposition and break long runs. The duo of Mr. Inside and Mr. Outside led Army to two national championships and a 27-0-1 record over three years.
NetSuite’s management team has its own Mr. Inside and Mr. Outside. Mr. Inside is founder and CTO Evan Goldberg who has a low public profile but is a brilliant technology development guy who is responsible for both the on the ground work for the technology at NetSuite, the roadmaps, and the technology vision. Zach, Nelson, Mr. Outside, is the CEO and the public face of the company – and has the both the savvy and the flair to present NetSuite to the public in ways that resonate to their audience and potential audience.
On the marketing side, they have clearly matured in 2012, dialing back what was their long time, rather pointless, strategy of snarky attacks on their competitors. They did very little of that in 2012 – or maybe I just didn’t see it. Either way, they tended toward marketing around their own strength as suite.
They also continued to show some power with their analyst/journalist relations due to the sterling work of Mei Li, their SVP of Corporate Communications. Mei, who I number among my closest friends in addition to being a professional I admire a great deal, has always had the right idea when it comes to influencers and outreach, recognizing that they are not demographics or categories – they are individual humans, whether they work for an analyst firm like Gartner or IDC or a boutique research firm like Constellation or are individual influencers – or they are journalists who write in the industry or for the general business press. She gets it.
Put all of this together with the success of the management tandem and their strategy, is evident. In their recent earnings call, NetSuite announced that they had a record $308.8 million in revenue in 2012, a 31% increase over the prior year. They had a 50% increase in operating capital to over $54 million. In other words they are healthy and consistently growing.
Yet, their approach comes with a price that they have to pay – and 2013 is the year that they will either pay it or they might suffer some losses in mindshare and or market share.
Because they are so successful and consistently so, they have been less concerned than other companies on responding quickly to market shifts, some of which have been close to seismic; some of which have been nothing more than momentary trends; and some of which are now permanently embedded in mainstream thinking For example, a couple of weeks ago, my colleague and friend, uber-influencer Esteban Kolsky, wrote a post on IBM’s recognition that social business is now mainstream and how they have not only adjusted to it but have actually used the shift to their business advantage. NetSuite, at multiple levels, has not been as responsive as they should be.
The resulting efforts in the social realm for example have been less than stellar. They made partnership choices for collaboration and social network providers that both in retrospect and to some extent at the time, seemed odd and now seem downright dysfunctional. The big one was Yammer, now a Microsoft company – which takes them out of the running to be part of NetSuite’s ecosystem.
Yet, unfortunately, I’m preaching to myself here to some extent. This is a company that I love to deal with. I have friends there: Zach might be the coolest CEO to hang out with in the whole industry; I was at Mei Li’s wedding. I have a high regard for their product suite too and the depth it brings – which makes it competitive with anyone in the market. They have been an enterprise software suite in the cloud from almost the beginning, which gives them a maturity that you don’t often see in a software company. Additionally, they are a company that does try to fix its own problems. They had serious customer service issues a few years ago and put some time and effort into dealing with it and anecdotally at least, the problems seem to have settled from a loud roar to a low buzz. But when it comes to breaking out of a box that has been successful for them, they are loathe to do it – and it will impact them in the near future.
So what is it that they have to do in 2013 to have the impact that I know they can have?
What they have to do
- Social and analytics embedded - When it comes to their product, I’ve said this a million times with them and I guess they don’t really listen, but this year (like last year), they have to incorporate social capabilities into their otherwise excellent suite. To a lesser degree, they also have increase the robustness of their analytics – especially around customer analytics as more especially predictive if they want to play at the big enterprise level. Every indicator is that they do.
- Partnering much better, please - In conjunction with #1, they have to partner with the right companies in the social realm. As noted, their social partner choices have been a bust. They need to think through what they need to offer and then find the partners that make sense. I have some ideas but they aren’t appropriate part of the discussion here. It would take too much space up.
- Break out of the marketing box - They need to get out of what has been for years a nearly totally traditional marketing head. This is the 21st century and social marketing, organized analyst/influencer relations programs, thought leadership and content development at scale all need to be part of the thinking. Mei Li has done a brilliant job at the AR/IR stuff for years – the best individual in the business. Zach Nelson is a dynamic CEO with not only the operational skills to run a burgeoning business, but the good will of an ENORMOUS number of people. The team of the two of them has reaped untold benefit for NetSuite. But there is a limit to what they can do as a team of two. Traditional marketing spend, while still has importance, isn’t where the deepest part of the budget needs to be – it needs balance. The faster that NetSuite realizes this, the faster they will reap the results of a contemporary marketing strategy.
2012 was a monumental year for SugarCRM. They proved they could scale to the enterprise – and that was no small deal (please note the somewhat abstract pun there).
As far as the numbers go, here’s a number of the “really-good-but-still-just-a-number” variety:
SugarCRM’s customer base increased year over year by 22% by Q3 2012.
Nice going, guys. Can’t go wrong too much with that. The question is of course, what kind of customer is that now that they are going upmarket? What? What do you mean, Paul? How is SugarCRM changing to be an enterprise player?
First, earlier last year, they began resituating their markets – aiming more toward the enterprise market place as a viable alternative to the bigger boys out there. Their alliance with IBM had shown a theoretical scalability with the logic being that IBM wouldn’t have partnered with them around CRM if it weren’t for that capability. But they hadn’t done the requisite “proof of concept.”
But low and behold, in April they (and IBM) announced that SugarCRM was going to replace the 67,000 seats of Siebel that IBM had used for countless years – which, of course, was the reason that Siebel was being replaced.
As a bit of an aside, I think that Siebel has finally run its course. Even though many Siebel products, especially Siebel Call Center, are still being used after many years, its age is showing now. In a recent discussion among several analysts, it was noted that there were quite a few customers who were either replacing Siebel or talking about replacing Siebel. The numbers were anecdotally significant. RIP, Siebel. You were durable and you did good.
In any case, the SugarCRM announcement was an indicator of their ability to scale to enterprise proportions. As of today there are over 7000 seats done and by year end 2013, all of the 67,000 Siebel seats will have been replaced by SugarCRM.
But, very interestingly, by going upstream to the enterprise, they get contrapuntal with their new messaging around SugarCRM being aimed at a market of one – the individual user. As they scaled up, they focused down. Which of course, creates an interesting story – and conundrum. How do you appeal to a company needing thousands of seats when your target is the individual user without being lost in a morass of homogenous faces?
But this raises a whole new set of requirements and actions by SugarCRM.
What they have to do
- Calm the channel – Since SugarCRM is running parallel efforts – going up market at the same time as they are sustaining and supporting their existing small and medium business efforts – they need to make sure that their channel fully understands this revamped approach. SugarCRM’s recent personnel move makes their channel a little nervous, even though there is actually nothing to be nervous about. But, perception is everything and SugarCRM needs to be alleviating the fears of their channel quickly. The programs they are developing speak for themselves. For example, their new channel regional alignment – 10 regions in the U.S. rather than 5 – is a huge benefit for the partners – but they have to be able to explain how it is to those partners.
- Incorporate social into the SugarCRM platform as a development option – One thing I’ve always liked about SugarCRM is their attention to mobile and social as things that they need to incorporate into their platform. With mobile, they’ve done a great job, able to work with any mobile operating system – natively with iPhone, iPad, Android and Blackberry and currently with the use of Companionlink – one of the better mobile integration applications for SugarCRM – with Google and Windows 8 Phone. I have to assume that Windows 8 Phone is on Sugar’s native integration roadmap somewhere. However, with social, they haven’t been as complete yet – but they are aware of that. With SugarCRM 6.0 they integrated some social capabilities via the Sugar Cloud Connectors. But these are primarily concerned with the integration of and the communication with social feeds from the external social networks (e.g. Twitter, Facebook, and LinkedIn). There is much more to social including analytics that has to be accounted for when the enterprise is involved. (See Infor review above on this). SugarCRM now has to make their move with a fuller social capability integrated into their platform if they are to compete at the enterprise level.
- Expand the thought leadership being generated internally and externally – Chris Bucholtz is doing a great job as the public thought leadership face of SugarCRM. With his stellar CRM Outsiders blog and his writing for CRM Buyer and his general interactions with the groups of influencers that he has been a part of for many years, SugarCRM has made great progress in this domain. But they now need to expand it even further with a program for thought leadership that involves a lot more visibly organized content production. A great example of companies that have done this well are Eloqua and Marketo – who have a branded presence with their thought leadership efforts – e.g. Eloqua’s Grande Guides. So, in a nutshell here, a branded thought leadership effort – not just thought leadership is their next phase.
- Expand partnerships to more than IBM – SugarCRM has established its bonafides when it comes to the enterprise. The product scales. They’ve proven that. Their partnership with IBM is incredibly strong with SugarCRM, in effect, being IBM’s CRM technology of record. Several of the SugarCRM partners, such as Company to Watch winner DRI Global have done the integrations with SugarCRM and IBM Connections which together make a capable social business system. All well and good. But now, if SugarCRM isn’t being acquired by IBM – and I don’t know that it is or isn’t – Sugar needs to start stretching its enterprise muscles and getting allied with companies like Accenture, Deloitte, CSC, Ernst and Young Advisory, etc. to expand their enterprise footprint. Also to find partners that can sell into the enterprise and do so routinely. The big deals necessary to make SugarCRM be what it wants to be don’t lie with IBM alone. They need to be starting down the path of developing these alliances. The big consultancies would be dumb not to take a look; and SugarCRM would be dumb not to try to show itself. A couple more marquee partners would be a huge plus for SugarCRM in 2013.
- Focus the messaging around business outcomes – SugarCRM has been great around two marketing thrusts – dropping “open source” as a differentiator – which they did with no damage to them; and their new focus around the system for one - meaning organized around the individual user; not the company as an indistinguishable whole. Now, in line with going up market and focusing down to the individual, they have to shift their message. One of my (new) favorite quotes is from poet Muriel Rukeyser and it goes: “the universe is made of stories not of atoms” In effect, that’s what SugarCRM’s marketing has to look like. The potential danger of focusing on individuals as the core target is that they too get indistinguishable. Know what these individuals want out of a business system – how it helps them the person, not the “atom” and you’ll get to the heart of the enterprise – the people who make it up – and their particular needs. Use service design logic for the products and jobs-based thinking for the messaging.
If SugarCRM does all these things, there will be exactly the synergies between the enterprise and the individual needed to succeed; then the whole will be far greater than the sum of its parts.
Next up: Aprimo, Eloqua, Hubspot, Infusionsoft and Marketo