Son of CRM: cloud sales, marketing and service in 2013

Son of CRM: cloud sales, marketing and service in 2013

Summary: Innovation at the edge of the enterprise is transforming the profile of CRM, bringing cloud, social and mobile to the fore.

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The name's the same, but this is not the CRM your forefathers knew. Back in the client-server era, enterprise computing focused almost exclusively on automating internal systems. Today, all the innovation is happening at the edge of the enterprise, automating external interactions with prospects, customers, partners and more in the quest for what I've called frictionless enterprise.

No wonder Gartner says the typical CMO will soon be spending more on IT than the CIO. It's not that the CIO is spending less. It's simply that the CMO has so much that could never before be automated and now, suddenly, all of it and more has to be automated in double-quick time, just to stay competitive.

This transformation is a gift to cloud providers because all these interactions are happening on their territory, beyond the enterprise firewall, where traditional enterprise software is fearful to tread. The proliferation of smart devices and online interaction has extended CRM processes out into the hands (literally) of prospects and customers.

Nowadays buyers intensively research the market before they ever speak to a single salesperson — and the moment they do make contact, they expect a personalized, responsive relationship, delivered direct to their Web browser or mobile app. The trend of consumerization makes this true no matter whether they're shopping for a designer purse for their own use or a satellite launch system for their employer.

Any enterprise that's not tracking online interactions, mobile apps and social media buzz — and using in-depth analytics to maximize its understanding of online and offline interactions — risks appearing ill-equipped and out-of-touch.

Redefinition of CRM

This is my second blog post in a series on how the old, established categories of enterprise software are being recalibrated and replaced to match modern needs. My last post was on the death of conventional ERP. Upcoming posts will look at collaboration, HR, spend management and more. Today's deals with the redefinition of CRM.

This is a huge topic. The expansion of CRM beyond the confines of the enterprise means that today it encompasses digital and social marketing, website management and mobile apps. It has to join up across sales interactions, service calls, invoice queries and warranty claims. It has to collect and act upon a bevy of external social media and information resources. It must deliver a great customer experience across multiple direct and indirect touchpoints.

An overview of this massively expanding field can barely do it justice. For far more detailed and knowledgeable analysis, the pre-eminent authority in this field is my ZDNet fellow-blogger and Enterprise Irregulars luminary Paul Greenberg. He has just announced the 2013 finalists of his celebrated CRM Watchlist. Over the next few weeks he will be revealing the winners and reviewing them in characteristic and inimitable detail. Two more must-follow experts in the field are Brent Leary and Denis Pombriant.

Here is my brief commentary on what to expect in 2013 from the cloud's leading CRM vendors. As before, please use Talkback below to add your feedback if you feel I've missed any significant players but remember that this review is strictly cloud-only and does not include hosted versions of on-premise software. Nor will I include SMB solutions unless mentioned in passing.

Finally, as ever, I must disclose that some of these vendors, including Salesforce.com, are past or present consulting clients and may have funded my travel to attend their events. Others brief me over lunch or dinner from time to time, and several work with me in the EuroCloud trade association. They all know not to expect any favors from me in my independent writing, but a closer relationship inevitably gives me more awareness of their business than those of vendors I speak to less frequently.

Salesforce. There is only one 800lb gorilla in the jungle of cloud CRM: Salesforce.com. So much so that a few months back, I accused the company of turning into a latter-day Oracle in its pursuit of growth. It certainly has the scale, expense-account sales teams and corporate relationships of a classic enterprise software vendor. It's so dominant in its core domain of cloud-based salesforce automation that few dare to challenge it there, while it's built considerable strength in the neighbouring domain of customer service. As the largest and best known pureplay cloud vendor, it has long been the pre-eminent evangelist of cloud applications in the enterprise, and more recently of social business.

In this context, the main thrust of Salesforce.com's platform play has become been to straddle the gap that separates enterprise sales and services staff from their prospects and customers, connecting their operations into the realms of cloud, mobile and social. And in focusing on that mission, it has left it to others in and beyond its ecosystem to innovate at the further reaches of digital and social marketing. That's why, when it launched its own Marketing Cloud offering last year in the wake of its acquisitions of Radian6 and then Buddy Media, there was a sense of it wading, with little aplomb, into territory staked out by others. Of course there's time to put that right; many scoffed at Service Cloud when it was first launched, and now it's a half-billion-dollar-a-year business.

Salesforce's strength is in innovating within the fabric that connects the enterprise into cloud, mobile and social, rather than at the bleeding edge. The continued development of creations such as Chatter, Site.com, and the entire Salesforce platform with its fluid APIs will consolidate its lead in that role and give it plenty of scope for continued growth in 2013.

Other CRM. The only cloud CRM vendors that dare challenge Salesforce.com do so from a distance, literally. Salesboom is based in Canada, Zoho is run from India, other smaller rivals such as Really Simple Systems and Workbooks hail from the UK. Most target the SMB market, touting their relative simplicity as a selling point. Enterprise rivals tend to be on-premise or hybrid offerings such as SugarCRM, Oracle CRM OnDemand and Microsoft Dynamics CRM, which puts them beyond the scope of this cloud-only review. SAP Sales OnDemand merits a call-out as a fully multi-tenant offering, but despite a striking UI, it has so far proven of muted appeal, even among SAP's existing customers.

Oracle deserves separate mention for the strategic positioning of its offerings and in particular for its pending acquisition of marketing automation vendor Eloqua — a major foray into unadulterated multi-tenant SaaS territory. I mentioned earlier that CRM has extended into new fields, and Oracle's acquisitions are strategic beachheads in the most important of them. Eloqua was an early pioneer and became market leader in the now substantial field of digital marketing automation. It will make an interesting complement to Oracle's mid-year acquisitions of social marketing and analytics cloud vendors Vitrue and Collective Intellect. RightNow, acquired a year ago, spanned multiple touch points from traditional contact centers to social media.

Finally, of course, Oracle cannot be overlooked as the leading player in enterprise CRM. It claims that its CRM OnDemand and Fusion CRM applications can run as multi-tenant apps, but in my book if customers run the same code for on-premise deployments, it hugely dilutes the effectiveness of the cloud app.

Other cloud marketing. When I first wrote about enterprise software pivoting to new stacks, I cited Marketo as a leader in a market that had barely existed a decade ago. That market, in which Eloqua also plays, is still evolving fast, with Marketo acquiring social marketing vendor Crowd Factory last year, while other, younger competitors snap at its heels. I do a disservice to several strong vendors in lumping them all together like this, but space constraints give me no choice as I mention in passing up-and-coming names like Pardot and HubSpot, along with Genius, Aprimo and others. A separate mention goes to InsideView, which feeds externally collated information into sales and marketing automation applications to further help identify the most promising and timely prospects.

More cloud marketing. While the boundaries are blurred, I have opted to carve out a separate set of vendors who are more centered on email marketing management, such as ExactTarget, Emailvision and Silverpop. Many of these focus on SMB buyers, including Constant Contact, VerticalResponse and the rapidly growing MailChimp. There's much innovation at the SMB level including Nimble and InfusionSoft, which recently garnered substantial venture backing.

In this section I also mention website cloud platforms, even though it's a highly fragmented category in which none of the players are particularly large and they tend to specialise in specific niches. Examples include CrownPeak, Agility CMS, Clickability (now renamed Limelight Dynamic Site Platform), Echo and Alfresco in the cloud.

While most enterprises prefer to build and manage their own websites, I suspect that the increasing demands of engagement automation, social and mobile will make the homegrown approach less and less sustainable, creating a large market gap that is currently ill served. Interestingly, Salesforce.com introduced an offering last year for just this market.

Cloud customer service. Finally, I once again have too little space to do justice to a massively innovative set of vendors that are bringing social dynamics to the arena of customer service. Vendors such as helpdesk platform ZenDesk, which raised $60 million and is said to be prepping for an IPO this year; Assistly, which became Salesforce Desk; crowdsourced support platforms led by GetSatisfaction and Lithium. More innovation comes from cloud-based call center services including LiveOps and NewVoiceMedia.

Each of these vendors exemplify the scale of transformation in CRM. The center of gravity has moved away from internal efficencies and centralized reporting to enabling closer, more timely and contextualized interactions with prospects and customers. I don't pretend to know how this is all going to pan out; I don't think anyone can. This transformation remains a work in progress, with much innovation still to come before new best practices become established — and cloud platforms are playing a leading role.

Topics: Cloud, Enterprise Software, Oracle, Salesforce.com

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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11 comments
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  • Dynamics Crm Online

    I'm not sure how Dynamics Crm Online doesn't fit in this conversation? They have a full multi-tenant cloud offering delivered in a browser just like SalesForce and they've had tremendous growth. Just because they also have an On-Premise version they don't count? I think Microsoft will come out on top with their Yammer + Skype integration and the latest marketing software that they are rolling in. They really want this space and SalesForce users are already starting to move to Microsoft just on price alone.
    Cloud Developer
    • re: Dynamics Crm Online - qualified multitenancy

      I've added a link to the end of the Oracle discussion that elaborates on this issue of how it makes a big difference when a vendor has to manage an on-premise version alongside the multi-tenant version:
      http://www.zdnet.com/blog/saas/taking-false-cloud-comfort-from-multi-tenancy/1530
      Also this earlier post gives a further taken on this:
      http://www.zdnet.com/blog/saas/multi-tenancy-why-you-should-care/1131
      So there are solid reasons why, for the purposes of this cloud-focused overview, Dynamics CRM Online doesn't count. Though your points about Yammer + Skype integration are well made - the product is certainly a player and it's a fine judgement whether or not it should have been called out and given more of a review.
      philwainewright
  • Influence of online advertising

    It's interesting how easy it is to write an entire overview of enterprise marketing without mentioning Google, even though Google's multi-billion dollar contextual advertising business is one of the biggest players in how companies market themselves today. It should have merited at least a passing reference to the notion of inbound marketing and the way such products have automated tie-ins to Google, Bing and other search engines. Of course the field is wider today, with Facebook and iTunes also becoming significant ad vehicles in their own right.

    All this reinforces the central point that CRM these days is about much more than just the field sales and customer service teams. There's a huge element of automation that's been introduced in the past decade.
    philwainewright
  • A Very Dull Industry

    CRM has to be one of the dullest areas of cloud apps. A bunch of me-too vendors slavishly copying each other - social media and marketing bolt-ons - tedious and pedestrian. As The Economist reported last week, and as leading venture capitalists such as Peter Thiel rightly point out a flat-lining in tech innovation - the CRM space is a reflection of this yawn, bore. In the end, the big players, such as salesforce.com, Microsoft Dynamics CRM, Oracle, SAP et al will find themselves in a price war, unless they embrace real innovation. The consumer marketing subsegment of CRM is over-played - too many 'social' offerings - and now acquisition/cosolidation is starting to indicate market maturation - e.g. Oracle buys Eloqua. The enterprise sales effectiveness space is wide open for innovation - turning CRM from a historical reporting tool to a guided selling platform is the hot opportunity. But otherwise, these are just laundry lists of very boring, undifferentiated offerings. No one carea about cloud v. on-premise IT - it's a given. No one cares about social CRM - that's just commodity bolt-ons. The game now is the pursuit of real innovation where sales people can make a difference. Otherwise, it's just a journey to the bottom of the ocean for a bunch of dinosaur and wanabee CRM vendors.
    Being Guided
    • Point missed

      There is no way to 'to do the right thing, at the right time - with the right person...' without proper CRM practices in place. Context is important, at all stages, not just selling. So, the question is how does one establish context? Context can only be established if needs are understood, job-to-done are understood - oh, and put someplace for people to access.

      In the end, it needs to be about much more than selling, it needs to include the whole customer lifecycle. Yes, including the buying journey, product-in-use and service delivery. While innovation is happening around the edges, the complexity comes in putting it all together. I am not going to through definitions, nor throw buzzwords around, that would be unnecessary.

      Phil - I think you did a nice job of putting it all out there for people to think about and decide. The innovation is not only about what the vendors are doing, it is about what companies can do with what the vendors are providing. So, the conversation about Cloud v Prem v Hybrid is important.
      mjayliebs
  • ERP Software

    Your explanation about cloud marketing is interesting and useful. I knew more information regarding CMR from yours. Thank you.
    Nissi Infotech
  • Out of touch, out of mind: Extending CRM w/ eCommerce

    Nice take on the the evolving role of CRM. As I like to put it: out of touch, out of mind. It's no wonder that CRM has to grow in response to today's customer-centric world—and, specifically, eCommerce has become a vital vein in CRM. In fact, Gartner's 2013 CRM Vendor Guide identified eCommerce as one of the key legs along with SFA, call center/support and marketing. . eCommerce is more than just Web transactions—it's sophisticated in that you have to take into consideration subscription billing and management, context, usage, customer engagement, retention, various touch points, channels and more. All of these pieces have to be incorporated for an effective customer-facing solution – whether assisted or self-service.

    We've seen how buyer behavior has shifted over the last couple years driven by the rapid shift to cloud-based services and solutions. Cloud has impacted the entire lifecycle of how vendors must manage their customers from acquisition to retention. To Phil's point, it comes down to how vendors are increasingly enabling interactions and transactions outside the firewall, many times in the context of commerce (e.g., trials, freemium and paid trials, through to servicing them with subscription adds and amendments). in fact, given Forrester's end of 2011 survey of tech companies showing the rise (not fall) of revenue via channel partners, it is these same capabilities that have to be extended to your channel partners to enable them to manage customers on your behalf.

    With the average consumer touched over ten times (e.g., online, social, and yes, even marketing materials) before even engaging a sales person or making a buying decision, the vendor has to extend its definition of customer-facing systems and how to enable every touch point. CRM needs to extend with eCommerce capabilities to engage and service the customer at every touch point across direct and indirect channels, enable customer ordering and servicing within the context of the customer need to build vendor-customer relationships, exercise pricing control across channels, keep brand consistency, and more. In addition, the solution should enable channel control from reseller and affiliate tools that provide important cross channel consistency to reinforce and multiply your brand message and ensure price control. Channels need to be able to support the end-customer relationships beyond the first sale.

    The interactions certainly have moved outside of the traditional CRM solutions and understanding, and enabling these myriad of transactions between vendors and their customers is now fundamental.
    Michael Ni - CMO/SVP, Marketing and Products, Avangate
  • Text Integration with CRM solution is becoming important

    I believe mobile marketing will play important role in upcoming years. Even in last 2 years i have seen many companies doing Bulk Text Marketing and getting lot of benefit from that. Many business integrate there systems/apps with SMS Text API too boost customer interaction.
    AliAbbas19
    • Test integration

      Popular company offering such services is http://www.innovativetxt.com
      AliAbbas19
  • Independent CRM market comparison

    The CRM market for customers has widened in there be hundreds of possible suppliers to choose from. Sometimes too much choice isn't good as it makes it a time consuming and costly exercise to select from. www.g2crowd.com is a good independent site that provides industry comparison of leading CRM vendors, fuelled by only customer input and contributions not analyst opinions.

    Ian Moyse
    Workbooks
    ianm32@...
  • Hey

    Hi Phil,

    Great article on CRM. I appreciated the redefenition of CRM section. If ever you want to compare or study similar software, you are free to visit us at www.itqlick.com.
    Leo F