CRM 2009 Forecast - Part 1 -Sticking My Neck Out

(8)Mobile CRM will be in increasing demand by sales organizations in particular - and vendors will continue to invest in it, downturn or not(6)There is a divergence of interest between how large enterprises will look at and buy CRM 2.0 (Social CRM) and how small businesses will do the same

Usually, from year to year, you'll see forecasts from Gartner, Forrester, IDC, Aberdeen and the like for whatever area of technology interests you.  You'll also see economic forecasts about the coming bust, bear, boom, bull market and these incredible charts which prove that the human species is pretty much incalculable despite the consistent and pretty peaks and troughs of the provided long term cycles.  Personally, I have a really complex formula when it comes to my forecast, refined over years of research, observation and algorithmic application.  It goes something like eu + gw (l*bl)/i = fw, where eu = eye use; gw = guesswork; l=luck; bl=blind luck; i=intuition and fw = forecast wisdom.  Meaning these, like most all forecasts (I hear analyst bellows even as I say what I'm about to), even if they include cool lookin' statistics or other comforting numbers, are based pretty much on observation and lucky or not so lucky guesses and have as much chance of being wrong as being right.  I'm actually amazed that year after year, people pay attention to what we pundit-types say. I'm not sure I would.  But faith goes a long way with our species, doesn't it?

Even saying that, there have been a lot of things that changed over the last year and you saw in my last post that I was right about enough I think to make this stuff kind of intriguing and certainly the fodder for arguments and your forecasts.  Yeah, your forecasts which I would love to see in extended comments.  Yeah, buckos, you need to sing for your supper. If you expect me to write about all this stuff, in return, I expect you to write to me about all this stuff. I need something to read that I can mull over besides my own writing - which I get sick of sometimes.

Alright. Enough. The format is going to be something like this. You'll see number preceding the individual item - usually from 1 to 10. That number is my thinking about the probability of this occurring - meaning what are the odds of this being completely off the wall - or more or less accurate?

Let's boogie.

  1. (8)Mobile CRM will be in increasing demand by sales organizations in particular - and vendors will continue to invest in it, downturn or not - The investments in mobile CRM being made by Oracle, SAP, Sage and, of course, RIM, among others, are going to start paying important dividends.  There are several factors that point to this, even in the midst of economic decline. The increasing hardware power for Blackberry, the widespread availability of 3G and the beginning of the purported rollout of the 4G WiMax; the interest in making the iPhone a mobile enterprise platform, especially with CRM, the purchase of Symbian by Nokia, converting it to open source, the commitment of Microsoft partners to build Microsoft Dynamics CRM 4.0 Windows Mobile solutions, the (finally) release in 2009 of SAP's kick butt CRM 2007 Sales for the Blackberry, Oracle's committment to the iPhone as a platform - a genuinely big deal; Sage's release of SalesLogix Mobile CRM for the Blackberry and Maximizer's ambitious release of their CRM products on the iPhone, Blackberry and Windows Mobile.  All of this already happened except the release of the final product for SAP.  I mean, that's a lot. My colleague and best bud analyst - industry expert Denis Pombriant agrees with me on this one. I'd pay close attention if I were a vendor behind this curve because the demand is on the increase here and concerns about the economy only increase the desire for sales - and sales force automation and social networking is where I'm seeing the most significant progress. Don't underestimate the demand here for CRM 2.0 type applications. Not only were their iPhone like lines for the Blackberry Storm - their touchscreen device - but 400,000 enterprise-ready souls downloaded the Blackberry MySpace application the first week it was made available - highlighting again what I've said all along - consumer thinking is deeply penetrating the enterprise- and has to be considered in employee and customer strategies - even in a B2B environment. Mobile is beyond significant - its critical to 2009-2011 CRM strategy. I'm not alone in this either. Gartner predicts a 40-60% increase in the use of mobile CRM from 2007-2010.
  2. (6)Large enterprises will buy CRM 2.0 tools; SMBs will look to simplicity in CRM and dabble in social tools - divergent approaches - The interest in extending CRM applications and strategies into communities and social media will increase in the large enterprises as they begin to realize that to retain their customers they need to engage them in more valuable activities that will lead to continued purchases. It will also be driven by a need to rely a more on customers than ever before as part of an extended salesforce. It is also driven by internal pressures with the millennials becoming significant parts of workforces both in size and influence. They are demanding at least internal use of the tools that they use as consumers, which helps drive changes in culture in the companies. (see McKinsey report on use of Web 2.0 for more detail)  However, the small business world is not looking at CRM this way. They are looking for low cost ways to operate their businesses so that they can keep their customers in "economically-challenged" times. That means automating processes, not developing communities which have extensive overhead involved in their maintenance. Simplicity drives their CRM choices and companies who understand that like Zoho, Really Simple Systems CRM, Maximizer, Sage, etc. are working toward developing CRM products that make it easy on the small business to operate - not to engage customers, but to manage transactions with customers  - in other words, traditional CRM approaches. Small businesses will certainly dabble in social media because the barriers and costs of entry are low and failure won't kill them.  The interest is there but the actual use of social media isn't widespread in the SMB world yet. Small business will not see an integrated CRM 2.0 as a priority in 2009. Their CRM choice will be driven by cost and ease of use for their operations, not social tools.  Their use of social tools will be driven by their use of them as consumers.
  3. (6) The debate over REST v. SOA as the small business architecture of choice will heat up in 2009 - This is a debate that has been ongoing for the last 12 months or so with proponents of REST like Sage making a pretty decent case as to why RESTful architecture is good for small businesses - familiarity with the protocols like http:// as one core good reason, simple commands. Sage though vents in their "Sage CRM Solutions 2010 Strategy" document against SOA rather unfairly as cumbersome and complex without the obvious benefits of the services/business rules "alliance" that SOA provides. Gartner's position on this is interesting too because they are saying that there is no REST v. SOA debate. That they can go hand in hand.  The shorthand for Gartner's reasoning is WOA = SOA + REST + WWW. See this article for more details from Gartner. This is an important debate for IT folks because small and mid-sized businesses will be confronted with the choices and there are consequences in the form of TCO and ease of use in their choices. So expect this debate to heat up in 2009 - unless its a non-debate. The best article I've read on what SOA and WOA do differently comes from Dion Hinchcliffe in his Enterprise 2.0 blog in September.
  4. (9)Integration between traditional CRM and Web 2.0 applications, features, functions and characteristics will accelerate -Even now, we're seeing CRM vendors like Oracle, SAP, Sage, Microsoft, RightNow and salesforce.com integrate social applications as core CRM functionality. With the exception of perhaps Microsoft, this is a major initiative for all the vendors and has repercussions throughout the entire suite offerings of the larger vendors (e.g. SAP's announcement that their Google-like user interface, first rolled out in SAP CRM 2007 is going to be rolled out as the unified interface for all their applications). For example, we've seen the release of Oracle Social CRM applications such as Sales Prospector and Sales Library this year; we've seen RightNow integrate functionality for communities and unstructured search search of community knowledge through an alliance with Lithium; SAP create both an enterprise-grade Twitter-like product called ESME (see this video star turn by Irregular Enterprise's Dennis Howlett for more on ESME) and also develop a Twitter-trolling capability for their customer service application that will analyze customer tweets and then alert the appropriate parties, depending on the business rules.  There are also independent companies that are developing integrated capabilities from scratch like Helpstream and InsideView.  For example, Helpstream provides community based customer service with strong tools for workflow and business rules included.  Not only can customers help solve customer service problems, but the community chatter can be analyzed and alerts sent  to appropriate corporate parties based on the results of the analysis. There is a continued effort to integrate external social networks like Facebook with more traditional CRM applications. Salesforce.com has been particularly smart in their approach to this. My bud and leading independent analyst Denis Pombriant wrote on the implications of the salesforce.com Facebook integration announced at Dreamforce 2008 earlier this month.  Look, dudes and dudesses, this is a trend that will continue and is pretty much unstoppable as CRM vendors have FINALLY figured out (took them nearly 3 years to realize what many of us realized in 2005) that they need to respond to customers by integrating what customers demand - in an ecosystem run by the customers.  This is one of my locks for the coming year. Economic difficulties or not, CRM vendors will accelerate the integration of social tools into their formerly operational software.
  5. (7)Social software companies will increasingly integrate with CRM applications through APIs and plug-ins - This is going in the other direction from #4.  There is one noteworthy approach being taken by the Web 2.0 type companies when it comes toCRM best characterized by nGenera. They have been building out their social CRM ecosystem by acquisition - their purchase of Talisma for its customer interaction management engine was paradigmatic in this regard.  But the bulk of the social software/Web 2.0 companies who are finding that CRM is the ideal mature industry to be involved with are developing APIs that work with CRM applications. Atlassian has been one of the leaders in this, integrating JIRA, their 2.0 project management tool, with SugarCRM. Siebel, Netsuite and salesforce.com and Confluence with at least salesforce.com and VTiger CRMIBM's Lotus Connections 2.0 announced its integration with iEnterprise CRM in September - a curious choice of CRM applications actually, but nonetheless indicative of the trend that's out there.  Leverage, a leading community platform, has been integrated with salesforce.com for the last two years. Neighborhood America, my personal favorite when it comes to social networking platforms, integrates with salesforce.com and has several other CRM integrations in the works. There is a reason for this activity in the social software world - and unfreezing of their relationships with CRM vendors. CRM is a mature area that the social software and social media companies can see dollar (or whatever currency you trade in) signs.  They are going where the money is - and in a downturn - the money is often in the place that helps you keep your customers happy. This one not as frenetic as the integration from the CRM side, but still a live operation.

I think that I'll stop here for today.  Thing is that I have about 10 other pieces to this forecast including an assessment of companies to watch in 2009 so there is a good two or three more postings that I'm going to get out of this.  What I'd really like to hear is what you think is going to happen in 2009 in CRM and related areas. This is a big year for CRM and a big deal. Transformational  might actually be more than a political term - though we'll see.