Okay, I admit it. I failed. I broke a promise.
I wanted to provide individual coverage for each of the conferences that I’ve attended in the last 2 months or so, but there are so many I just couldn’t keep up. I covered SugarCRM SugarCon 2013, Infor, and Infusionsoft and didn’t get to Clarabridge, Lithium LiNC, NetSuite SuiteWorld, SAP Sapphire and Pegasystems PegaWorld. With CRM Idol coming up and continuing client work and a malingering upper respiratory infection that has spent 7 weeks mocking my health, I know I won’t get to them – at least in detail.
But they are all companies worthy of coverage and for that, I’m going to give you very short assessments of how I’m thinking about each of them relative to their conferences.
So, with apologies to each of them – all gracious hosts – here we go.
I’m not sure why this company isn’t bigger (though I have an idea). They have a terrific product suite and platform – the only sentiment/text analysis product I know of that does 11-point sentiment and does it well according to the multiple random customers I’ve spoken to. They call the all-encompassing set, Intelligent Customer Experience (ICE) and they deliver big time with it. (For a bit more on the product including a link or two, take a look at the CRM Watchlist 2013 review of Clarabridge). They have a very smart and personable CEO, Sid Banerjee, who also has a really good business model for the company. They have an aggressive (in a good way) active, hip and on message VP of Marketing in Melissa Pippine (who also resembles Reese Witherspoon). They have a good PR company working with them who has a top flight rep. Rosemarie Esposito. Their culture is fun and yet dedicated to making sure that the products get out the door and the customers get a result. They have a highly visible partnership with Accenture that would be enviable for companies five times their size.
Yet, for some reason, their revenues are not where at least I think they should be, given the chops of this company. Neither is their conference attendance, with only an incremental year over year increase, which got them to around 650 – a respectable number but not off the charts, at the 2013 shindig, which was, attendance notwithstanding, a terrific event.
For a while, I have been puzzling over it. I had discussions with several analysts who were at the 2013 Clarabridge conference; I think we all were kind of puzzled about this conundrum. To give you an idea of how much interest they attract, the influencers at the event included me representing CRM, Bruce Temkin, numero uno in the world when it comes to customer experience; Ray Wang, an almost legendary enterprise software analyst; and Seth Grimes an analytics rock star. Plus they managed to get Joe Hughes, who is the jefé of the Global CRM and Social Technology Practice at Accenture to be an enthusiastic participant. Clearly, they can appeal to a remarkably diverse group.
I’ve been mulling over this for a while now and I think I’ve finally got a hypothesis or two on why they aren’t as big as they should be. And what I think they have to do, though it will take some investment to get there – of time and money.
Here’s the thought process:
They have charted a course that is low risk. Wisely, it focuses on their strength in analytics and aims at customers whose needs are clear in that regard. They pay little heed to markets that are not at the hub of the wheel in their wheelhouse. This means several other markets, though for the purposes of this particular piece, is going to mean CRM. They pay only a small amount of attention to the CRM market, which, if I read things right, would probably welcome them with open arms, or at least intense curiosity. But they have only a peripheral presence in the market, at best. This is a lost opportunity unless they decide to find it.
This is a market that was/is $18 billion in 2012 (both Gartner and IDC agree for once. (See Louis Columbus awesome roundup of the CRM market growth in Forbes here) and will grow to $24.22 billion by 2018 (Marketsandmarkets) (how they get that specific a number, I have no idea. I can’t even count the change in my pocket accurately). In fact, even more optimistically, as of about a week ago, Gartner predicted that the CRM market will be $36 billion by 2017. No matter who you believe, the market size is hard to ignore. Arguably the hottest area in that market is the desire for (the buzzword of the year) actionable insights – precisely what Clarabridge provides. Because of the ability to integrate routinely with other applications (over 40) as they already do with say, Radian6 via the Radian6 Insights Platform, they could be a core part of multiple CRM technology ecosystems and I would imagine be a go-to-market partner for many. But I don’t think they are investing in the effort that it would take. I’m guessing because there are so many analytics (including text analytics) players already in the CRM market, which makes the effort a bit higher a risk than they seem to be willing to take.
Wanna know what I think?
They need to expand their sights and think more aggressively. They have a killer company as their user conference proved. This is one of those situations where small ball and manufacturing runs isn’t the way to go. The fences in right and left may not be as short as some places but they are reachable with a good solid swing. Enough with the metaphors.
Lithium LiNC is an annual event that I always look forward to. Their conference this year in particular was an extremely well-crafted and well executed conference with a consistent theme and look that enhanced the clarity of Lithium’s messaging. From the entertainment (Team Iluminate) to the boldness of the color schemes and the energy of the music, plus the informality of the speakers (led by CMO Katy Keim as host), it was clear that they’ve nailed their marketing thrust for 2013 and beyond – which is that Lithium is a bold, growing company that is prepared to handle the biggest challenges – from new technology frontiers to the largest enterprise needs in a way that conforms to 21st century norms. Score one for the marketing.
While its great to be clear and on message at the same time, = it has to be backed up by substance, which for the most part they were able to do. Aside from consistently “big customer” stories that were up on the stage, they were also able to show the evolution of their product – in particular, their first iteration of their social analytics product, Lithium Social Intelligence - a complete redesign led by Chief Scientist and industry thought leader Michael Wu. This was welcome for three reasons:
The product was clearly a 1.0 version, but it covered the basic functionality needed by businesses and in addition, there were some interesting and unique features to the social analytics. For example, it used colored boxes to indicate positive, negative and neutral sentiment and the strength of that sentiment. So a lighter green would be less positive than a dark green but still positive. While this may not be as granular as say, Clarabridge’s offering, it does provide a strong visual meter that gives you a fast read on the level of the feeling which allows you to take an action more quickly. That’s nothing to be sneezed at.
Lithium also, as if to punctuate their readiness, moved in June to a new office in the city of San Francisco, which, I hear, is fantastic – and also highlights the readiness to take on the world theme.
Their revenues are showing it. This well funded company has, according to rumors floating around, a $100 million run rate. I have no corroboration of that, it’s only a rumor. But even as a rumor only, it indicates a perception that this company is gaining market share.
That doesn’t mean they don’t have a lot to do. They are still seen as the competitors to Jive and while that isn’t strictly true, Jive often is given, rightfully or not, the upper hand and is perceived as the “bigger company” like it or not. Part of that is true and part is perception – but as you well known – perception is as true as truth when it comes to perception (How’s that for a true but convoluted statement?). But Lithium’s answer to this needs to be in numbers to a large extent. That means:
High stakes to say the least but something that they need to complete their loop – or to pun badly, tighten the link.
This was possibly the most interesting of the all the remaining conferences because at its heart, NetSuite is an ERP company – especially one focused around the financial requirements of companies in the upper end of the mid-market. Its well-thought out enhancements and added muscle are leading it to the enterprise, though they are very early stage. Their sweet spot at the moment remains companies that are the size they are – around $500 million and growing. They put a strong period on that idea with their recently announced Oracle partnership (along with Oracle’s Microsoft and salesforce.com alliances) which has the two companies jointly going to market their cloud products - HCM (Oracle) and financials (NetSuite) to the midmarket.
Let me be clear about something. Even though my focus is clearly and obviously CRM and all related customer-facing aspects (e.g.. social, mobile, etc.) of the industry, and NetSuite is an ERP company, I have been a strong believer in this company for a decade. The reason is simple; they do what they do extremely well and in the right way. They respond to customer requirements and needs and they pay attention to the details. That doesn’t mean I’m uncritical as you’ll see in a minute, but I firmly believe that their customers get what they pay for when it comes to NetSuite – which does sweat the important small stuff. For example, if there is an increase in the VAT tax in Europe of say, a quarter percent, that increase is reflected overnight in the system without any fuss whatever. Its just there, so that those NetSuite customers who need to be concerned about it, have nothing to be concerned about. I also have supported them for this long also because they were born in the cloud and, as salesforce is, are a pure play cloud service. They also have a terrific CEO in Zach Nelson who not only understands what they have to do but keeps his focus stubbornly on it so that they execute accordingly. Plus, he is a great guy to hang out with.
One other thing as we segue to the conference itself and what I think is a lost opportunity. They kicked off their first user conference in 2011 with 2000 people. Last year, they had 3500 attendees. This year, 5000 attendees. This is a remarkable growth rate for any industry conference and, at the same time, an exemplar for all the conferences other than the established Big 4 conferences. NetSuite is setting an aspirational standard for all other technology companies like them. There are reasons why when it comes to conferences, size does matter. Conference attendance is an indicator and a reflection of the growth of excitement around the company and the commitment of the customers they do have. People come to these things – they pay for them, don’t forget – because they want to learn about the company and participate in the ecosystem around the company as well. An annual conference is a great place for that to happen. Additionally, it is something that impacts the attendee’s impression of the company, which will remain for the 12 months following up to the next one. The attendance is also a reflection of the confidence of the customer base in the company and of the analyst interest in the company – all important to the company’s ultimate interest – the growth of their revenues.
SuiteWorld reflected the growing confidence that customers had in NetSuite as a trusted source.
But that doesn’t mean that the conference didn’t suss out a few things that NetSuite needs to be thinking harder about.
Let’s get to down to that.
At the conference they announced a few major initiatives – primarily, their move into manufacturing and the evolution of their ecommerce platform and their addition of order management to the portfolio of components. There was really no discussion of their CRM products at all – which is sad really because they have a strong sales (SFA) product though as a complete CRM offering it lags a bit in its marketing and customer service components. It’s called CRM+ and has been a small piece of their revenue for many years.
Zach Nelson explained the reason for the lack of emphasis and the lack of investment in building the CRM product. Their perspective on CRM is that it consists of is order management and ecommerce, not sales, marketing and customer service per se. While my immediate and visceral (and correct) reaction was “are you kidding?”, after thinking about it, I realized there was a logic to this view of CRM – for an ERP company. While this doesn’t make it right because it is self-serving since ERP is not CRM. But it isn’t entirely wrong for NetSuite to define it that way for their own purposes either. In their eyes, CRM is a way to sell ERP for the most part and to provide some capabilities to their customers that they require. All in all a neat, self-contained, and for them, not wrong view of it.
However, that doesn’t let them off the hook for the opportunity that they are missing. Let me lay it all out.
While I think that the definition of CRM that their ERP-focused business uses certainly may serve them well in their universe, its not sufficient for the bigger ambition they have to serve the enterprise. They may fool me and succeed without CRM; I don’t put anything past this very successful company. But I think that it’s just a shame to waste something that is being handed to you. I’ll still support them though. Ten years is a long time and I’ve been nothing but impressed with their moves. I hope that they have the wherewithal to make this one.
Once again, SAP pulled off a nearly impeccable conference. The virtual streaming worked without a hitch. The logistics, as complex as they get for 20,000 attendees, were well thought out and spot on. For example, they paid attention to where they located the Global Communications area for analysts and press, making it convenient to get to for meetings with executives. They paid attention to the floor space layout in the exhibition hall. They used state of the art A/V equipment to broadcast to the conference floor and the exhibition hall as well as for the virtual show that brought in thousands of other “attendees.”
When it came to influencer relations, the Global Comms team succeeded at what was a daunting task. They were able to successfully schedule substantial numbers of 1-on-1 meetings between the influencers and senior management, which they managed without visible problems. Additionally, as they have done the last few years, senior management also just showed up in the Global Communications area ad hoc, and hung out with their acquaintances and friends from the influencer world, rather than just be there for appointments. Something that NO one else does.
But what was also obvious, regardless of the remarkable conference effort, is that SAP is a company in transition. They are reorganizing massively around two ideas – the cloud and HANA. That means that they are consolidating what might have been dozens of internal siloes into a small number of organizations.
This is reflected in multiple ways. They have put a significant percentage of their applications on HANA with an objective of all their offerings in time. They’ve designed entirely new interfaces – the user interface they call Fiori; for analytics its called Lumira (which sounds like it should have a side effects warning).They are doing a massive overhaul not just in their messaging, but in their approach to messaging which seems to be what it should be – outcomes based (though early stage). They’ve deep sixed their old naming convention and now are a lot more flexible. You can see the design-based thinking that is starting to permeate the company, rather than the functional noodling that characterized them up to this year really. There’s a long way to go in this regard, but they are off to a decent start.
Like the geometry of nature, this overhaul and reorganization is symmetrical down to the nearly molecular level. Everything, from the big picture strategy to application design, to presentation of ideas and “things” to messaging is being impacted. For example, during Sapphire, I had another excellent meeting with SVP for Solutions Marketing (LOB) Denise Broady, who showed me an “application” (though that is sort of a limited description) that SAP had created called SAP Solutions Explorer. Essentially it’s an amazingly well done catalog of SAP offerings that takes advantage of contemporary technologies to present those offerings in ways that can be shaped by the user to make sense for them.. It’s an online offering worth looking at, which you can do right here. The reason I bring it up, is that it is in line with the SAP DNA change at that molecular level. It isn’t just a repurposing of PDF files. It is a highly interactive, on the fly configurable user friendly, user controlled application that allows the user to personalize what they want to do and see and at the same time has a vast scope that is made manageable. This is almost a paradigm of what SAP wants to be. But still has a ways to go to get there.
Of course, as you would have to expect, there has been significant tumult around this DNA evolution. Some of the uncertainty has been caused by the exit of Lars Dalgaard for Andreessen-Horowitz. Lars was given credit as the man who brought them into the cloud and is leaving them at the precise time they are re-positioning as a cloud company. Regardless of what you think of Lars, its created some concerns around SAP’s transition, but concerns that can be overcome – at least in my eyes. Realistically, even with the revamping of the company’s image, they are still a hybrid company (as is Microsoft) and there is nothing wrong with that. Serving the customer base via either on premises or cloud delivery while leading with the cloud as the primary delivery option is actually a perfectly workable strategy that at minimum keeps an installed base happy and optimally can draw in new cloud customers. SAP has a history of focusing on their 30,000 customer strong installed base. This gives them to chance to go beyond that.
The same goes for CRM at SAP, which is undergoing a primal reorganization – one that has its own challenges, in addition to being in sync with the reorganization around CTO Vishal Sikka’s cloud and HANA focus. CRM’s history at SAP has been a checkered one, because it evolves, then it disappears from the radar; then it shows up, evolves again, disappears again. However, this time around, it seems that CRM is trying to re-emerge as a “here to stay for good” part of SAP. That entails a new installed leadership and the rumor is that on July 1, we’ll hear who that is, though I already know. And I ain’t telling. Nyah. Nyah. But it is a good thing. What SAP needs for CRM is pretty straightforward:
There is no turning back this time for SAP CRM, no way to disappear and re-emerge one more time. This time is it.
What does that mean for the future? It’s hard to say at this juncture. The reorganization and consolidation is far reaching and goes way beyond just CRM. Getting everything (including CRM) aligned with contemporary business plans is a daunting task. Plus they now have to deal with the new alliances of Oracle/Microsoft; Oracle/salesforce.com and Oracle/NetSuite which leaves them the theoretical odd man out. But make no mistake about it, despite all the harping that goes on about SAP, they have been survivors at least and industry leaders at best and there is no reason to bet against them coming through this one as planned, either.
PegaWorld 2013 was my very first. Yup. Never been. Not their fault. Mine. I had been invited but had in the past, other commitments at the same time. This time they got me early and I went to Orlando and voila there it was.
It was an eye opener – truly. Let me explain.
Pegasystems, for those of you in the CRM universe who aren’t all that well acquainted with them, came from the land of Business Process Management (BPM) and quickly built the kinds of products that put them in market leadership. They have been around a long while – since 1984 – and they’ve reached about $500 billion – no small chunk of change. They toyed with CRM for a long time and had something of a love/hate thing going. At the height of “hate” – they used to write marketing collateral with the adjective “Dead” in front of “CRM” every time it was mentioned – i.e. “Dead CRM.”
But then they bought Chordiant in 2010 and lo, the waters parted and things changed. Without going into all the details, let’s just say that they are now all in when it comes to CRM. Starting with a process-based customer service product, they now also have both sales and marketing products that start from the standpoint that their products support a great customer experience. More on that later. They’ve come to the conclusion – which couldn’t have been easy for a company as steeped in BPM as they are - that business processes are not agnostic and that customers are impacted by them and impact them. That is a huge leap for a company who wasn’t built that way initially – and a brave leap. But they made it.
Keep in mind, one of the more important purposes for the use of automated business processes either in simple or complex efforts, is that they are capable of what I call “keeping the ordinary, ordinary.” What that means is that most of what a customer requires of a company is not unusual. It can be something as simple as a finding out an address or as complex as order management related processes. But, simple or complex, it is common. Customers want to take care of whatever it is they need. They want to communicate in the channel that they prefer and they want an answer in the way that they expect. That means if I ask for your address, I expect to easily get your address, whether or not I ask you via a phone call, an in person meeting, a text message, an email, a tweet, a Facebook message, a LinkedIn question. Whatever. My interest, as the questioner, is the answer. My expectation is that you’ll give me the answer. I don’t expect to be delighted, nor do I really want to be. But, also, I have no expectation that you will fail to get the answer to me either.
If you do fail, the customer’s frustration could be immense, creating what should have been avoidable problems. Think of your level of frustration if you can’t open a door that isn’t locked and has a knob that turns. Let me repeat, there is NO expectation of failure.
When you are doing this at scale, there are volume and velocity issues that add a whole level of complexity to the effort since each individual customer still requires the response they want in the channel and timeframe they pursue. Theoretically, millions of customers could do this without regard to your company’s resources. Thus, a high degree of automation becomes necessary. But even with the high degree of repeatable process, there has to be an engine that is flexible enough to recognize exceptions and be able to route the exceptions to the appropriate authority within the company, when necessary. Pegasystems is the technology leader in this domain.
I knew that. It’s why my interest in Pegasystems has grown over the last few years. Yet, I had been wary because of the “Dead CRM” thing which to me was just simply wrong and unnecessary. But I warmed up when that campaign went away and they put former Chordiant guy (and KANA) guy, Steve Kraus in charge of the CRM practice. That was an indication they truly were making their play in CRM. Additionally, around the same time, I began to chat with Brian Callahan, who runs Influencer Relations for Pegasystems – and runs its very well. I was briefed thoroughly by them and regularly so I’ve been privy to the evolution of their CRM products – first customer service, then sales and marketing - which, as you would expect are heavy on the process side – but with a surprising twist, as you will see shortly.
Even their entry into the CRM market didn’t alter the perception of the company as a somewhat rigid engineering culture. They also were seen as too “mechanical” and as out of sync with contemporary market trends. They seemingly didn’t recognize that the world had changed and that they had to.
I had the benefit of a reasonable amount of interaction with them, so I knew it wasn’t true even if some of my very early impressions kind of fit the stereotype. When they asked me to come to PegaWorld and moderate a keynote panel (disclosure: fee for that and paid expenses) and because, for the first time in 3 years of trying I was actually free on those dates, I said yes. I saw PegaWorld 2013 as a table setter, where I got to see what Pegasystems actually was and what they were doing and who ran them. In other words, get that end to end view that I needed.
So let me make at least one unequivocal statement. Pegasystems is not the rigid engineering company that lore says they are. Their products are being built according to contemporary requirements. Their message is on point. To a large extent they get “it.” I’ll elaborate.
There were 2500 Pegasystems customers at PegaWorld. I’d say this is a decent number but one that needs to jump significantly in 2014. They are comparable in size to NetSuite and while they represent different markets, Pega’s transformation and their continued grow needs to be reflected in the number of attendees at PegaWorld.
Even with the quantity being average, the quality of the customers’ response to Pega was anything but. I spent a lot of time talking to their customers and listening to them. While they don’t have the wild acolytes of say, salesforce or Infusionsoft, their customers love what they are getting. They have a heavily IT focused customer base who are just outright happy about Pegasystems products doing what it is they need. I found this satisfaction with Pegasystems mentioned over and over again. The bulk of the customers I randomly spoke with were not CRM customers, though there were a few – roughly 10% of those I chatted with. But all of them were involved one way or the other in either tactical projects or transformation projects on a global enterprise scale, where Pegasystems sat at the technological core. Perhaps the most impressive was the one being done by the 300 year old Lloyds of London, as presented by their Group Change Program Director Annette Barnes, who did a great job (See here for her presentation. Its worth listening to all the way through). Lloyds is engineering a top to bottom transformation of all of the company internally and externally around the experience that a Lloyd’s customer – individual or commercial – has with the bank no matter what channel, no matter what division, regardless of products owned, wealth managed, channels communicated on.
Lloyd’s reflected the theme of the entire conference from CEO and founder, Alan Trefler to every customer – it is all about the customer experience. But it wasn’t just a theme. It was a tight knit highly focused look at it from the standpoint of a contemporary BPM/CRM strategy.
Honestly, for me, I didn’t expect to hear customer experience as a core message of this company – but I did and I was convinced that it wasn’t just for show.
But Pegasystems still has a long way to go to change the perception that the industry has, which is necessary to get to their next level. Even with the obvious change in their outlook, their message and even the products that they provide, they are still perceived as an engineering company with a mechanical view of the world. This means a perception-corrective marketing plan on overdrive or at least (legal) steroids starts now. Their emphasis on customer experience was spot on in the way that they presented it. They made no bones about being what they are – a software company and thus they understood the constraints in what they could offer – kind of no hype refreshing. The audience bought into it. All good.
But the rest of the world is their battleground now. PegaWorld was a clear declaration that they are a changed company and that the perception that had existed of them is wrong. Now its time for Pega to invest in the kind of effort – outreach, thought leadership, influencer relations expansion, taking their new messaging and aligning it with all corporate imperatives (collateral, product, public declarations) and show the world they are a software company to be reckoned with in the 21st century.