Okay, I know its been tough (for me. I'm sure you've had a lot better things to do, but I happen to have no life), but its now that time. The oft mentioned, always maligned, CRM Watchlist 2011 is ready.
No drum roll yet, though.
First - Since this post concerns the Big 4 of the enterprise software world, each company gets what will be by far the most comprehensive treatment. Each company mentioned in subsequent posts will get a considerably shorter entry.
Second - Some stats.
One final reiteration of the criteria. Each of the categories had a specific assigned weight and there were numerical cutoff points. But as in all of these kinds of things, the number I assigned was based on:
One thing I will reveal when it comes to Watchlist 2011 numbers - the name of the highest scoring company. You'll note, if you cared at all, that I changed my mind about the "moving up, steady as she goes, on the way down" categorization of the Watchlist, mostly because its a good thing to be on the Watchlist and having to categorize a company as "on the way down" kind of takes away from the experience. However, that won't stop me from pointing out weaknesses that I think need to be addressed, as you'll see from the characterizations below.
You'll note that this says Part I. Multiple as yet to be determined parts will appear on ZDNet over about a week to 10 days time, heading into the very beginning of the New Year. You'll also see the "Ish" awards for the SMB category by Brent Leary on ZDNet during that same time frame. Or perhaps right after. Or before. Whatever. Brent and I will figure that out. You'll see a "special feature" - an assessment of the marketing automation vendors by my business partner (via
), best bud, and CRM expert in his own right, Bruce Culbert.
The Watchlist will be broken out so that you can digest it in easy parts and so that I can cover what will be an extensive list. Unlike last year, there will be no take a relook in 3 or 6 months since I didn't actually have the time to do that last year. Either you make it or you don't this year. If you do, kudos to you. You'll get a badge for posting on your site or using it as you care to. If you don't, stay in touch, there's always 2012. It doesn't mean you aren't a good company with a good product but for one reason or another you fell a tiny bit short this year. Some just BARELY missed my cutoff point (In one case, they landed exactly on the threshold cutoff point - really. They didn't make it. Above the threshold. ) I'm sorry. I'll mention you at the end of the final post briefly if you came really close.
In the interests of transparency, openness, honestly, truthiness and whatever else you want to call it, I'm going to let you in on a few things.
Those on the list are the companies that I think buyers and influencers and others should watch in 2011 because they impact or will impact the CRM and SCRM landscape and also provide value to businesses in need of a CRM related product. Its that simple.
I took a long look at what I wrote for 2010 and what I have for 2011 and the differences took my breath away. Sure there are the usual suspects - SAP, Oracle, salesforce.com, etc. but the number of companies that dropped off - even very high profile companies like Twitter, Amazon, or Hubspot - and the number of newer smaller companies that made it to the list in addition to the "traditional" companies is reflective of how the market matured in 2010, how the definition of what Social CRM is became clearer and what to expect in 2011 became more interesting but also more pristine - less fuzziness about who can be chosen.
Social CRM has become an increasingly mature category. It is now an umbrella term that when defined includes not only the traditional features of CRM as part of its identity, but also the social channels. But let me say it again. LOUD. One way or the other, it includes the traditional operational elements of CRM which is what separates it from a pure social media play. So you'll see that the companies on the list this tend more toward having that operational functionality as part of their offering either natively or through APIs which allow it to integrate with those traditional offerings more effectively where they didn't last year. So a Twitter, which was a social channel made it last year and didn't this year. Apple, who was a final candidate didn't make it because ultimately as a company they are a retailer who among other things sells software. There is no Apple CRM or even Apple Social Media that integrates with CRM software, though there are Mac based CRM programs. Apple itself doesn't produce one. Amazon, which was a candidate, didn't make it, though they are perhaps the greatest cloud provider that we have at the moment and play a huge role in making Social CRM work. Google is the one that sits on the cusp for all kinds of reasons. You'll see if they made it or not. While all these are companies to watch in general - they aren't (except maybe Google...maybe) companies to watch in CRM/SCRM.
Today, I'm going to disappoint you with only the Big 4 - the ones that you most would expect. These four will be considerably longer than the entries for the others, because, well, these are the "Big 4." However the next entry will bring some surprises - though even today there is one (kinda negative) surprise.
I might as well start from the beginning, as wise pundits have said over many centuries. Salesforce.com, whatever you think of them, was the highest scoring company of the 65 technology vendors - for understandable reasons. But this doesn't mean they are without flaws. Let's dive into why they are my #1 company to watch in 2011. We'll get to the flaws too.
This is an innovative, visionary company. While I said a lot of what you're going to hear in my Dreamforce 2010 two part post (get them here and here) . While Marc Benioff wasn't necessarily the first to understand the consumerization of business, he is the first mover - the executive who is actually leading the charge - and doing the things that the consumerization of business requires - better than anyone else. It was two years ago salesforce saw the spectacular growth of social networks like Facebook and saw that people (note I didn't say customers here) were responding to Facebook's features and interface by participating on Facebook with increasing numbers and across generations as a result. Most enterprise vendors who for reasons that I still find puzzling said "well, traditional business doesn't think that way and thus we won't build "consumer stuff into our applications." Salesforce took the exact opposite approach, recognizing that what changed is how we communicate. They understood that the way we used to communicate and the limited choices and channels we had were a thing of the past and that the transformation had changed how we interact with each other and institutions. They also understood that this change was irrevocable. But because they were/are visionaries they saw this as opportunity to capture mind and market share, not time to freak out. They pinpointed as had others that mobile devices like smartphones and then later, tablets were going to be the way that we fundamentally communicate, as IDC predicted last week. It was no coincidence that Marc pulled out the five mobile devices including the iPad from his pants at the last 2010 Dreamforce. Its also no coincidence that the colors and design of the UI that Chatter uses is "Facebook-like" and that Marc has a strong partnership with Facebook. Salesforce.com knows this communications revolution is irrevocable and rather than resist or try to create some new and confusing pathway, they are following the partially paved road in their fashion using their own vehicle. That means adhering to their 2002 vision of being the platform upon which business runs their applications. That means all businesses. They called it the Business Web back then. Now they just want to call it salesforce.com.
The thing is, aside from the beauty of the vision and the absolutely determined focus on following their platform path, they have good products too. Sales Cloud 2, Service Cloud 2 and this latest incarnation of Chatter are all very, very good and flagship worthy. They do something that salesforce products used to not do but now do well - they scale. Yet, even as salesforce.com finally figured out this scale thing, they are recalibrating their sights and focusing on not just on the upstream enterprise market that had been their focus for the last two to three years but back on all of the markets - large, midsized and small - and have organized their management structure and products accordingly. As MB put it at the conference -"we are everyone's cloud company" - a subtle but clear reference to their spreading their target market wide.
But its more than that which makes them the #1 company to watch in 2011. They also not only figured the consumerization of business, but they've also figured out the consumerization of IT. What that means has been described well in part in an October 2010 article in Gigaom on this very subject. What it doesn't mean is just open source. If it were, then the $212 million acquisition of Heroku, a Ruby on Rails (open source) SaaS Java platform provider would make sense, but would only provide an incomplete view of what salesforce.com is doing. They are still keeping Apex programming as part of their offering, so Heroku isn't a replacement, but an addition, extending their tools and brand in a way that may enlarge and engage a much wider developers community needed to compete now. What they are doing is recognizing that IT a. has to build customized e.g. personalized apps that are valued by the "consumerized" workplace and b. it takes an ecosystem of developers - both internal and external to collaborate to build those applications e.g. product co-creation/innovation by collaboration. That is the new paradigm and salesforce is fully aware of it. More so than any company except perhaps SAP.
But this expanded and growing energy of the salesforce.com brand comes with a caveat or two.
First, as always, they completely lack the native marketing applications that whether or not you call yourself CRM or a platform or whatever, you need to round out Service Cloud 2 and Sales Cloud 2. I don't care what you say, if you're offering them, you need to offer Marketing Cloud 2. Right now, they have a very deep integration with Marketo, thanks to Marketo's efforts, not theirs so if I were them, I'd just buy Marketo. If you can spend a couple of hundred million on Heroku, you can find the bucks to fill out the marketing part of your application suite which, platform or not, salesforce is still offering as cloud services. Yep, they are.
Second, salesforce needs to stop what is a creeping aloofness in their behavior when it comes to the rest of the industry (unless they are attacking a competitor - as their competitors are attacking them). I truly like this company but what has been noticed by more than me - by in fact many of those of us engaged in punditry is salesforce's lack of participation at industry events that aren't theirs. It seems the only non-industry event that they seem to be at, at least when it comes to some semblance of CRM is Oracle Open World. Now that might be unfair and I'm just unaware of those they are at, but I'm at most of them and they aren't. Denis Pombriant and I, among others, noticed that they didn't attend CRM Evolution 2010 (or Gartner either) and while this may be poo-pooed by salesforce as "so what" it reflects what is perceived as a not appreciated arrogance by the company - which never helps them. Coolness isn't a substitute for cooperation. Showmanship isn't a substitute for support of the industry that helped you get to where you are. Salesforce.com may not find what I'm saying important but I think their lack of participation has become noticeable and while I know they don't mean to be seen as aloof, that's how they are beginning to be seen. When it comes to their own events, they are wonderful and attentive, but otherwise need to step it up several notches in 2011.
Honestly, as p.oed as I might seem with that, thats a minor beef that needs to be addressed. I think they are truly an important company to be watching in 2011 because they are innovative leaders in a space that demands that - and that need for innovation is as irrevocable as the communications revolution that created it.
Make no mistake about it, Oracle belongs on this Watchlist and scored high enough to be on it. But at times, I'm puzzled by Oracle Not by their CRM leadership team, which I think is one of the best CRM leadership teams I've ever seen - and one of the nicest groups of people I've run across in the industry. Not by the scope of their applications which with the (theoretical) January general release of Fusion (CRM among the first of the apps along with human capital management), squarely situates them among the creme de la creme of the enterprise applications space. Not with their mobile marketing and loyalty management work, which I think is the best in the industry. None of those things.
Know what does throw me? After a vigorous campaign around what they called Social CRM (which I saw more as enterprise collaboration) in 2009, they went nearly completely radio silent in 2010 when it came to even using the words Social CRM. In fact, their thought leadership efforts seemed to be limited to the occasional appearances of Anthony Lye, who I still see as an inventive doer and though he calls himself a fast follower, I say a smart thinker. While they started to limit themselves to the less visible parts of the spectrum, though, their leader/jefe/resident rabble rouser, Larry Ellison has been pushing very hard on their Exalogic Elastic Computer Cloud server, a.k.a. "cloud in a (very expensive) box;" pushing a productivity suite for the desktop (Open Office 3.3) and in the cloud (Cloud Office) to rival both Microsoft Office and Google Apps, plus of course began to talk about the general availability of Fusion Apps.
All in all that makes me think that they are taking a different (Java based) approach, in trying to do what salesforce is also trying to do - which is to become the centerpiece upon which all business applications are run. The difference is that while salesforce.com is doing it as a platform-centric thing delivered only in the cloud, Oracle seems to be putting together the end to end hardware/software packages that can be delivered via the cloud or the more traditional on premise fashion.
Even though they were barely mentioning SCRM or even CRM in 2010, that didn't mean they weren't moving forward with the evolution of their products and technologies. In fact, one of the things that puts them squarely on the Watchlist for 2011, other than their incredible bigness, is that they began rolling out in a controlled way, their Fusion apps - the two highlighted being Human Capital Management (the most misnamed application concept in history - do you think of yourself as human capital?) and, near and dear to my heart - and hopefully yours - Fusion CRM. Fusion apps are built on a new data model, new middleware and from the best attributes of PeopleSoft, Siebel and Oracle itself. They are powerful, have a great UI - the best I've seen to date from an enterprise level application suite - and a smart man - Steve Miranda - leading the charge. IF they do as they said they would at Open World and in 1st quarter 2011 generally release at least these two, then we're off to the races. Oracle CRM on Demand a generally very good product, released its marketing component, built from an integration with their May 2010 acquisition Market2Lead. Its ugly, has a terrible lead scoring system (A through E and not yet customizable though I've been promised it would be) but as Forrester's very capable CRM analyst Kate Leggett points out rightfully what it does do well is close the gap between marketing and sales with shared KPIs among other things now possible. This is important given the new model for the integration of sales and marketing objectives (not departments) that is becoming increasingly interesting to businesses.
Oracle is an always interesting company. They are a legitimate leadership "threat" to anyone in the market and if they decide to get back into the thought leadership arena in 2011, they can be a HUGE player in the CRM and SCRM space this year. Fusion apps are that good. But its gonna take more than their size to do that (no bad jokes here, please, though I sure gave you room didn't I?). Its going to take a move away from their 2010 SCRM brain freeze back to a proactive effort. What's going to make this particularly interesting is if I'm right and they're attempting to own the enterprise applications space through the end to end solutions. Fusion CRM and Oracle CRM On Demand Release 18 are going to be key to their power in the CRM space this coming year. Let's see how Oracle rolls. But all in all, a company to watch in 2011 for sure. After all, this is a CRM Watchlist, n'est ce pas?
I'm going start by putting some old myths about SAP to rest because its about time SAP got the recognition they deserve and the myths got the burial they deserve.
While at times they've lost their way as evidenced by their messaging rollercoaster over 2007 through 2009 in particular, thingsat SAP have both truly changed - and apparently stabilized. Not only have they found their way - with one significant outstanding TBD (see below), but they also have eliminated almost all of the vestiges of the SAP of the 1990s, a company that rightfully earned its reputation as impossible to work with.
So get over it. You don't have the starched SAP to stomp on any more. Let me show you why they are on this Watchlist.
To put it in the positive vein it deserves, with the new dual leadership of Bill McDermott and Jim Hagemann Snabe, SAP made major progress in 2010, not just with their release of CRM 7.0 (which is most germane to this Watchlist), but with a fundamental transformation of their culture. They're well on their way to becoming a company that in general, not just the software space, is one of the more innovative and collaborative companies, in line with Procter and Gamble, IBM, etc. They are in the throes of adopting what is a truly contemporary, entirely appropriate 21st century business model that actually conforms with what has to be done to engage the social customer in a B2B or B2C or as superstar analyst Ray Wang of the Constellation Research Group, stresses in an important post on 5 Simple Rules of Social Business, a P2P environment. I'm not the only one who recognized SAP's transformation. The esteemed Vinnie Mirchandani references it strongly in his book released this year, The New Polymath (BTW, I HIGHLY recommend you read this book). I can quote a myriad of others who've noted the magnitude of SAP's cultural change.
Much of this transformation, which began in 2007 with the CRM group's development of CRM 2007, their first ever good release of a CRM product, was evidenced by what they did at Sapphire 2010 which I think was not only the best conference I ever attended bar none, but one that signaled SAP's transformation from what was perceived as a stultified relic to a now dynamic, vibrant entity that is actually, at least in a relative sense a nimble company. It is among the foremost leaders in product innovation and co-creation, the use of communities to foster ideas, and is developing products such as CRM 7.0 and Streamworks that meet the needs of 21st century business.
For example, SAP's Community Network (SCN) now can claim more than 2 million members, with many joining multiple SAP communities. So for example, the SAP Software Developers Network (SDN) has 2 million members; the BPx has 600,000. These aren't just communities of numbers but are lively interactive dwelling places where members are talking to each other about SAP related business and work every day. Communities not only in name but in deed. [CORRECTION: Jon Reed, an ERP guru and SAP Mentor pointed out the error of my ways - or at least my numbers here and he had Mark Yolton, the SVP in charge of SAP Communities give me the correct numbers. So the numbers you see here are now the correct ones. Thank you Jon and Mark. By the way, you should truly follow Jon Reed. What he knows about ERP is genuinely astonishing and he's a great guy with a lot of clout.)]
More germane to what we have to think about is their release of CRM 7.0, a vast improvement even over their good CRM 2007 release. For what's new in detail, feel free to go to this SAP slide deck. What they've done is strengthen the traditional elements of CRM, without a whole lot of social components added in. They've added, for example, loyalty management, territory management, better sales dashboards, and highly integrated communications-focused business processes. Some of this is standard stuff which they should have had already such as territory management. Some of this reflects new business reality such as the communications-enabled business processes (CEBP) which allow screen pops, single click calls, dynamic notice of availability etc.
Even though they are operating from a strong enterprise service oriented architecture (ESOA), they recognize that they can't ignore that new reality and have a REST API (they call it the Integration API which is used effectively, for example, in SAP Streamwork enterprise collaboration tools) that would support development of mobile applications, which are not just nice, but necessary for any enterprise vendor to move forward at this juncture. Their 2009 purchase of Kevin Nix's SkyData and their 2010 purchase of Sybase, in part for its iAnywhere universal mobile platform, shows that SAP is more than dutifully aware of that. But Bob Stutz's apparent leaving taking will most likely dent this effort a bit.
Combine all of this with the advances that Business Objects is making. First in its portability with the extraordinarily advanced iPad BO Express app and its social power via the use of the super speedy BO Insights to monitor sentiment on the Tweet stream. Second is SAP's firm commitment to the use of the incredibly fast in memory computing model with the launch of the High Performance Analytic Appliance (HANA - odd acronym, isn't it?). Keep in mind, part of the reason for the Sybase purchase was that the Sybase database is optimized for in-memory computing.
Finally, they continue to be one of the smartest companies in the world at engaging thought leaders, with the Business Influencers Group led by Don Bulmer and Peter Auditore, reaching out to hundreds of thought leaders in academia, among authors, social influencers, analysts, and any other nooks and crannies you might find a possibly powerful and hopefully friendly leader to tell your tale. This year they made a rare error and held the Business Influencers Summit at the same time as Dreamforce, drastically cutting their own attendance and then held it 30 miles from Dreamforce, meaning walkovers couldn't even attend for a few hours. This is a rare glitch however. Their skills are reflected in their winning of the AMI Partners Social Media Marketing Award this year.
All in all, powerful stuff that SAP is not only doing but weaving a story worth telling.
However, they aren't by any means 100% there.
Despite their strong push for the somewhat flawed Business By Design on demand platform, they remain behind the curve. They are pushing a "hybrid" model (duh!) so you can pick and choose the best of all possible delivery methods - both of which they offer. I'm still a skeptic when it comes to BBD because I saw it last at Sapphire and it was dented though shiny. However, there is apparently some promise to the SAP Sales 2.0 SaaS application that will be the SFA on Demand that SAP will be providing. This according to some who attended that ill-advised Business Influencers Summit in November. I hope so, but I haven't seen it yet, so I'm taking the word of those I trust that tell me this is the real deal. Not BBD, but Sales 2.0.
Additionally, there is still far too much executive shuffling going on. According to Computerworld on December 21, another extensive senior management departure is in the works. Most significant when it comes to me is the departure of Doug Merritt, an EVP/GM of Sales and a real star and the apparent (emphasis mine) departure of SVP of Mobile Applications, Bob Stutz who had led much of the strategic part of the CRM efforts over the past two years, (though this one Computerworld says is unconfirmed). There are several others but for me, these two are truly troubling, because they both were genuine leaders. I've heard rumors as to what Doug Merritt is going to be doing, but know nothing about Bob Stutz's leaving.
Alright, enough on SAP. I hope that you can put the cobwebbed covered perceptions aside and see why SAP is on this list. Simple enough, they deserve it.
This one is perhaps the most enigmatic choice and the most surprising that I've made. Not that Microsoft doesn't belong on the Watchlist for 2011. They most decidedly do. But because they faded in a few areas, they actually didn't make my threshold but still are powerful enough to belong on this list unequivocally, which shows, of course, that there is a lot of subjectivity to this list. However, not reaching the threshold points out that they have some serious holes to fill in 2011, but if they do, watch out, because they have some strengths that are clearly there but fuzzily defined by their own efforts.
So what are those strengths? What do they have to do to show that I did the right thing - though that's needless to say, not exactly a reason to do anything about what I'm going to point out. Their strengths lie not in their just in their CRM product offering Dynamics CRM 2011 - which is good except in the area of of course, marketing. Their strength lies in Microsoft Azure, it lies in their move to the cloud as their primary way of delivering their applications over the next few years; it lies in their, gasp, shockeroo, wow, ulp, whoa, mobile operating system, Windows Phone 7 - a mobile OS that they finally seem to have gotten right And, if done right, it lies with their Dynamics product line, led by CRM, which they've finally seem to have understood internally. All of this combined can lead them to a good place in 2011 and an improved position in the marketplace that they've struggled with for the last two or three years, including when it comes to it, CRM.
For example, Microsoft Azure is a truly competitive cloud infrastructure that has all the components needed to become a competitor to Amazon, unlike the rest of the industry who are more pretenders to the cloud provider throne. To punctuate the point, eBay became a customer of Azure in July 2010. Azure is, as far as I'm concerned, Microsoft's ace in the hole, when it comes to regaining market position in 2011 and beyond.
But they don't stop there. Aside from getting Windows 7 right (for a change), they got Windows Phone 7 mostly right too. Windows Phone 7 is not just a huge technical upgrade over all prior Windows mobile operating systems but its user interface reflects the communications paradigm shift that supports the current social consumer's behaviors. It might be the best organized interface of all the mobile systems (sorry iPhone lovers, Android folks - I use both of them but Windows Phone 7's appeal is undeniable). It lays a foundation for the mobile CRM apps that are critical the future of Social CRM.
Most germane here, Dynamics CRM 2011, announced for 40 markets by year end in July 2010, is a solid CRM competitor in the market when it comes to traditional SFA and customer service functionality. However, it suffers when it comes to its integration of social channels, despite its proclamation of social "connectors," which are used to integrate Facebook, LinkedIn and other external social feeds. Frankly, by comparison to its competitors, not all that much to show. In fact, competitive feed integrators like Gist do a better job than what I've seen, and provide more value. But what can't be argued is its familiarity through the use of an Outlook user interface, or the solidity of its traditional functionality (minus of course marketing, which is as poor as many of their competitors, though companies like Oracle - see above - are starting to incorporate marketing into the suite quasi-effectively, at least).
Despite this competence, the Dynamics platform seems to generate, all in all, an ambivalent buzz in the marketplace. On the one hand I heard rumors that Microsoft was trying to sell off Dynamics to Accenture, which are untrue as far as I can tell. On the other hand, in reality, its become a core part of Microsoft's revenue - and is being seen as increasingly so, as the always excellent Josh Greenbaum points out. So Microsoft becomes an enigma wrapped in a riddle wrapped in a puzzle, or whatever order that's supposed to be in.
But they should be concerned that they fell below my threshold, unlike their other competitors. They aren't doing anything horribly. But neither are they standing out in a market that demands razor sharp clarity due to the sheer number of competitors of all sizes in it and because Microsoft like everyone else is now competing for customer's attention, not just with competitors. They have done a good job in making Dynamics CRM 2011 more visible than any other CRM release in their history. They are engaging analysts and influencers where they need to - as is evidenced by their November 2010 industry analysts day in Seattle. They do not slack on their analyst engagement. Nor do they fall down with a partner ecosystem that is truly the best partner ecosystem in perhaps any industry.
But that doesn't excuse their holes. Here are a few of them. Even though they engage analysts in the way they should, they don't provide a lot of thought leadership in CRM/SCRM - little that's noticed in any case. Their attempts at Social CRM are halfhearted to say the least, with not only the Gists of the world outdoing the Microsoft social connectors, but companies like CDC Software Pivotal, built strictly on a Microsoft dot Net platform, eating their lunch when it comes to solid Social CRM functionality. As far as their ability to innovate goes, while its never one person who is the sole innovator at a company, they lost Ray Ozzie, not a blow that isn't going to be easy to recover from.
Their overall messaging I think is clear in two places - they are all in when it comes to the cloud - Yay, cloud - and they are starting to nail the consumer entertainment space with their Kinect push (a product that sold over 1 million in its first month). Their CRM messaging needs to fit a bit better in this.
I have an idea.
Several years ago, I heard Bill Gates say that Microsoft desired to be the technology foundation for how you ran your life (a theme seems to be emerging from the Big 4 all in all). That meant the business and personal parts of your life. Microsoft needs to expand that unified theme. Sometimes you are SO big, that the core message can get lost in its different parts. Getting back to this "Gatesian" message with a laser focus, incorporating Dynamics CRM 2011 - a solid product - into it, and getting out there into the market with this message for both marketshare (right now CRM has 23,000 customers, 1.4 million users) and mind share, and the beast can be unleashed - in a good way.
Which is why they belong on the Watchlist. Really.
That's it for this "episode." Next up, some of the tried and true - some tried, some true.