Sunday, August 5, 2012

Forrester and Gartner Trajectories for CRM

Last year I did the Forrester and Gartner trajectories for large organisations and sales force automation. With reports coming out for both, now is a good time to revisit. For those of you unfamiliar with the idea, I basically take a series of Gartner and Forrester reports and see how the CRM products have moved over time. The idea is no so much to see which product the two research houses consider the best but to see which direction the products are moving in, relative to their competitors.

Forrester

Here is the latest Forrester quadrant for large organisations Q3 2012.

So there are four horses in the race: Oracle Siebel CRM, Microsoft Dynamics CRM, SAP CRM and salesforce.com. Coming up the rear are Oracle CRM On Demand, Pegasystems and RightNow. Or are they? This is where we can get insight from the previous years.

Here is what we had in 2008 and 2010 (from the previous Forrester trajectory blog)

imageimage

So how are the leading solutions travelling?

Solution Comment
Oracle Siebel CRM They are still in the same relative position in terms of their offering but have raced forward in terms of their strategy. Ellison has been talking about a comprehensive software and hardware offering involving the cloud which may explain the move in the graphs.
Microsoft Dynamics CRM Travelling towards the top right but no major movements, just slowly improving.
SAP CRM Followed a very similar path to Oracle. Despite Ellison’s remarks in the previous link, SAP also have a cloud vision for their suite of products.
salesforce.com Comparing to the path of Dynamics CRM, we see between 2008 and 2010, salesforce edged past Microsoft in terms of their strategy, no doubt fuelled by their strong social messaging. However, Microsoft has consistently provided a stronger offering, presumably driven by their strong integration to Outlook. In the most recent graph it appears that salesforce is gaining ground in terms of their offering though.

In the last trajectory blog I suggested Oracle and SAP had lost their way. It seems they have hit back with vengeance. So the state of play is all four have strong strategic visions with, arguably, Microsoft slightly behind and all have strong offerings, with, arguably, salesforce slightly behind the pack.

As for the ‘challengers’:

Solution Comment
Oracle CRM On Demand While improving over the years, appears to be losing their strategic focus.
Pegasystems A system I had never heard of until writing this blog, they have come from, basically nowhere, gained market presence (as indicated by the circle size.) One to watch.
RightNow If we look at them, compared to the path of salesforce, we see that they have improved but have slowed in recent years and salesforce has moved far ahead. With the acquisition by Oracle, their luck may change.

Given the movement, it seems clear that the one to watch is Pegasystems.

In the previous blog I suggested Oracle’s Peoplesoft and E-Business Suite CRM products were falling behind. Both products are now well behind the pack and have, it appears, lost relevance. Perhaps this is a conscious decision by Oracle to focus on CRM On Demand and Siebel and let the others fall behind (although, according to Gartner, CRM On Demand has been replaced by Fusion). Sage has arguably done this with their CRM offerings, focussing on Sage CRM and less so on ACT! and Saleslogix and Microsoft also has, arguably, a strong focus in the ERP suites on AX and NAV and less so on GP and SL (at least, this is how it appears to me in Australia).

I also mentioned the ones to watch were CDC Software’s Pivotal, SugarCRM and Sage CRM. CDC Software appears to be slipping behind, SugarCRM has maintained its relative position and slightly increased its market presence and Sage CRM also appears to have slipped slightly.

Gartner

Here is the 2012 Gartner magic quadrant for sales force automation (I got my copy of this from the salesforce.com web site but, be warned, they will call you and try to sell you software for the privilege). You can also get it from the Microsoft News Center site (sales pitch not included). I mention this because for a social company you would think:

  • salesforce wouldn’t resort to such mundane tactics as cold calling white paper downloaders
  • given I handed across all my details and, with the world of social at their command, they might think a Microsoft CRM MVP is not their target audience

but I digress…

image

Here we have the same four horses in the top right quadrant but they are much more spread apart and ordered differently. Salesforce has moved from having the weakest offering of the four to having the strongest ability to execute. Also Oracle, Microsoft and SAP have moved from having a comparable strategic vision to being truly behind salesforce.

I am sure it is no surprise I disagree with Gartner on their belief in the completeness of salesforce’s vision. While it is true they know how to spin a good story and paint a picture or a world of social insights and meaningful customer interactions, the rash of acquisitions with little discussion of the vision for integration leaves me wanting.

In the previous trajectory article, I had five years of quadrants. For simplicity and consistency, I am again going to focus on just the quadrants for 2008 and 2010.

imageimage

For the leaders:

Solution Comment
Oracle Siebel CRM In terms of their ability to execute and their vision, they appear to be falling behind. In terms of vision, this contradicts the
Forrester report.
Microsoft Dynamics CRM Dynamics CRM has moved very fast in terms of their vision and improved slightly in regards to their ability to execute
SAP CRM While moving in the right direction, they appear to be doing it much slower than their competitors and, again, this conflicts with the Forrester report.
salesforce.com Gartner’s golden child for SFA. Relative to Dynamics CRM, it can be seen that, while moving in the right direction, Dynamics CRM appears to be catching up, although more slowly in recent years.

There are inconsistencies here between Forrester and Gartner in terms of salesforce’s strength and vision. My guess is Gartner is more enamoured with the salesforce social line than Forrester and, like salesforce, is sceptical on Oracle and SAP’s ability to deliver a social platform.

Time will tell which research house is right.

In terms of challengers, other than SugarCRM which, according to Gartner, has made massive gains on its ability to execute, there are no clear contenders. Looking at the challengers from the Forrester report:

Solution Comment
Oracle CRM On Demand Gartner believes this is no longer a competitive product in the market, being replaced by Oracle Fusion Sales.
Pegasystems Not mentioned by Gartner
RightNow Not mentioned by Gartner

In terms of market consolidation, the number of products in the magic quadrant and the number of companies has remained consistent with the numbers from 2011 suggesting consolidation of the industry has slowed or, perhaps, stopped.

As with the previous blog article, the Gartner report paints an industry with less movement of products and more stability with the leaders remaining in their dominant position. The one consistency in the two reports is who the dominant players are leading the way in the industry.

Conclusions

There are four players leading the way in the CRM industry:

  • Oracle Siebel CRM
  • Microsoft Dynamics CRM
  • SAP CRM
  • Salesforce.com

According to Forrester, all are similarly placed. According to Gartner, dominance is between saleforce.com and Dynamics CRM with salesforce the one to beat. In terms of new players, a close eye should be kept on Pegasystems. Consolidation of the industry has also appears to have slowed down. As stated in my previous piece on the Gartner trajectories, the close rivalry of the four products will only make for better, more competitive products with the winners being the consumers. It is a great time to be in the CRM game.

5 comments:

Parthipan said...

This is the beginning of September 2012. As I read this I am mindful of quite a lot of discussion on forums as to which way the market will turn and this eems to be a major worry for Siebel consultants. The slowdown in recruiting is a cause for concern.How would a consultant interpret this posting and compare it to job prospects in the short term?

Leon Tribe said...

Parthipan: I used to work with Sage SalesLogix. When Dynamics CRM came out, while functionally it was limited, the architecture ran rings around SalesLogix with its configurability and web service layer (back then we had to customise the web client and Windows client seperately in SalesLogix). Architecture is hard to fix but functionality is easy.

The cloud is a similar catalyst for change. I don't know Siebel well but if you feel it does not have the architecture for the new world and the only thing going for it is superior functionality, I'd be looking at some of the 'new-comers' and picking one to learn.

Don Wiid said...

Leon, do you have an explanation why Gartner rates CRM Online's "ability to execute" so much lower than its on-premise counterpart?

Leon Tribe said...

Hi Don,

In short, no. Functionally, the online and on-premise versions are almost identical. Forrester considers them the same product for rating purposes, which, to me, makes more sense. In version 4 it was not possible to run server-side code online, which would explain the mark-down but this is no longer the case so I am mystified.

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