Global spending on CRM (customer relationship management) software surged in 2007 to roughly US$8.1 billion, a 23.1 percent jump over 2006's total of about $6.6 billion, according to the research firm Gartner.
Some of the increase can be attributed to currency fluctuations, noted Gartner analyst Sharon Mertz. The weak U.S. dollar has resulted in software companies reporting higher totals from sales made abroad.
"Although our estimates for 2007 accurately reflect dollar-valued market growth, they overstate market growth from the perspective of most other currencies. Accordingly, great care should be exercised in their interpretation," Mertz wrote.
SAP held the top spot, with 25.4 percent market share, followed by Oracle with 16.3 percent. Salesforce placed third with 8.4 percent, followed by Amdocs at 5.2 percent and Microsoft with 4.1 percent.
Salesforce and Microsoft registered the highest growth rates of the top vendors, with 49.8 percent and 88.6 percent, respectively.
Most CRM spending is still happening in Western markets, with 53.4 percent in North America and 31.8 percent in Western Europe. But while sales in emerging markets only account for 15 percent of the overall tally, both the Middle East/Africa and Eastern European regions saw growth rates in 2007 of more than 40 percent, according to Gartner.
The CRM category encompasses a number of subsegments, including sales, marketing and customer service, the report notes.
During 2007, the sales subsegment grew 27.6 percent, a figure that represents 40.5 percent of the overall market, compared to 39 percent in 2006. Marketing automation products had a 15.4 percent growth rate, for 20.3 percent of the overall market, a slight drop from their 21.6 percent take in 2006. The customer service segment rose 22.7 percent, for roughly 39 percent market share.
Trends driving the CRM market include social networking and related technologies, the report notes.
"Businesses face increasing challenges identifying customers, determining which behaviors they should be monitoring and subsequently responding to, and which types of social media are appropriate to support their particular business and industry," Mertz wrote. "Customers will look to vendors to provide innovative technologies and services that assist them in proactively channeling the power of social nets into successful CRM strategies."
Oracle, for one, is beginning to roll out a series of "social CRM" applications. The first is Sales Prospector, which is meant to help salespeople find viable leads by analyzing the buying histories of companies. Users add data from their sales transactions; over time, the additional information improves the database and provides better recommendations, thereby giving users an impetus to participate, according to Oracle.
Mertz was not available for comment Monday. But another industry analyst described the CRM space as a "moveable feast."
"It's a category that's continually expanding its reach. I guess the key question is whether the CRM vendors like Salesforce, Oracle, Microsoft, SAP, et al, will expand into areas which are being developed nicely by niche players or whether they'll continue to be content to partner," said China Martens, an analyst with the 451 Group.
Source:networkworld.com
Monday, July 7, 2008
Wednesday, July 2, 2008
Heads in the Cloud at Structure 08 with Salesforce.com and NetSuite
Last week's Structure 08 conference was dominated by Cloud computing and the fact that enterprises haven't figured out how to embrace it. Luminaries from the likes of Salesforce.com and NetSuite outlined their visions of a Clouded future.
Cloud computing
By Stuart Lauchlan, news and analysis editor
“The world is about to change, and change in profoundly interesting ways,” declared Jonathan Yarmis, VP for advanced, emerging and disruptive technologies at AMR Research at the Structure O8 conference in California last week. “The enterprise itself hasn’t figured out how to embrace Cloud computing; users are figuring it out very quickly.
“Kids coming out of college will not go to a company that blocks Facebook. Equally importantly, it’s ineffective. It’s all about the user and we’re not going to stop them," he warned. “We talk all about Web 2.0 and Enterprise 2.0. It’s time to start thinking about User 2.0 and the attitudinal differences these new users bring to the equation. Now ad-hoc, socially-oriented, enterprise agnostic users will take wisdom of clouds anywhere, they have no loyalty to company.”
Yarmis said there needs to be a cultural shift to make Cloud computing work. ”When PCs first came in, and even when computers first came in, the first thing we did was task automation,” he said. “The whole rise of enterprise software has really been around process automation. But at the end of the day, we’ve omitted the social aspect. We’ve solved the CEOs problem; what we haven’t solved is the individual sales person, who is trying to figure out 'Who do I know who can get me in the door of some company?'. They are the poster child of the social revolution, because their job is inherently social.”
The matter of the challenges facing salespeople is where software as as a service (SaaS) firms like Salesforce.com and NetSuite come in. Parker Harris, executive vice president and co-founder of Salesforce.com, argued that scale is a primary consideration when developing Cloud applications. “When we started we thought about the scale of the internet — if everyone was using the service at the same time, what would that look like?" he explained. "From the very beginning at the software layer we thought what would it take to build this thing? We architected it not thinking about biggest customers, but about the internet."
The pain point
“When we started, Marc [Benioff] had a vision of the customer experience of Salesforce.com being as easy as buying a book on Amazon.com,” added Harris. “As a technologist, you want to build a platform, but you risk losing touch with what you're building it for. So when we started, we said we're going to build a service that's fast, simple and right the first time.
From a technology point of view, Salesforce.com has now evolved into a platform for application development in its own right. “As a technology, we wanted to build a platform first, one that is beautiful from a technology perspective," said Harris. "But you risk losing touch with why you're doing it. Originally it was going to be for sales people and there were various abstract layers; we quickly realised the need to unify them. We continued adding layers in response to our customers; columns, end user interface. At that point we realised it could be a platform. We didn't consciously do that.”
There were issues of trust surrounding the deployment of Salesforce.com, he conceded. “When we started, a lot of people said they didn't want to trust their information to anyone,” he said. “Data, privacy... these were all big things, and people were concerned with trusting their customer records and leads with another company. We made the huge step, and now people trust the information services. We sell to business. We do a lot of work on compliance and security issues to meet the needs of enterprise. For business, we are very appropriate.”
Of course, things haven't gone entirely smoothly. “About two years ago we did go through some serious issues and part of it was due to eBay. We were in a data centre and they could give us more power but no space, or space and no power. eBay was the dominant tenant. So we moved everything to new data centres,” he said. “The scale-up was so complex, and we had the top people in the industry and it was too complex at that point. Changing everything and pushing the scale created a layer of complexity.
"We eventually worked it out and scaled it up. We made two big mistakes: we changed everything all at once, which is a huge risk for any business, and we moved onto large scale systems. We had an Oracle database that was heading into some bugs. You're always going to have bugs, but changing everything at once and also pushing scale in a vertical sense created a complexity that was just too hard. Then we hired the guy from eBay who had been through it before to make sure it never happened again!
"Maybe the next guys won't hit that pain point, but we hit it, Amazon hit it, eBay hit it, Facebook hit it. We're all very different businesses but we all hit it. It's not like there's a blueprint that says 'this is how you build a massively scalable service. You never replace it with version 2, so you are forever changing it. There are best practices that have evolved, and people should follow them if they want to do this."
Suite-based approach
Also representing the new world of SaaS business applications was Zach Nelson, CEO of NetSuite who turned his attention to the mid-market. “The mid-market is the last great software market,” he declared. “The Cloud is important in the mid-market because it finally makes it economical to reach the Fortune 5 Million. It's always been very difficult to sell business applications to millions and millions of customers. The other thing that makes that market economical is Google. In the old days, you had to send out lots of direct mail and advertising to find the customers. Now they find you through Google.
“No mature software market looks like the mid-market. No one company has more then 10% market share in the mid-market. It's harder to reach them with marketing and sales and with product. It's harder to run a mid-sized company than it is to run a billion dollar corporation. You have the same problems but not the same resources to deal with them. How do you build an application that's rich enough to deal with the problems, but easy enough to be used by everyone? That's the challenge for the mid-market."
Nelson added that the intergation issues of traditional applications deployments do not go away just because of the Cloud. “Most people see the Cloud and they think that all applications magically work together because they are delivered from the Cloud. Nothing could be further from the truth,” he said. “Google takes the credit for some of this. You click on a link in NetSuite or Salesforce.com and you zoom in on a map from Google Earth and find the office you're going to visit. People look at that and they think 'that's easy, maybe I can now have orders in one system and invoices in another and they'll all work together.' No they won't. The web is very good for loosely-coupled applications, but businesses run on very tightly-coupled data models. That's very important if you're considering building applications on one of these platforms.”
Nelson highlighted the old way of buying applications whereby a company would buy Siebel to run sales, SAP to run back office, PeopleSoft to run HR and Broadvision to run the web, then paid ten times as much to tie it all together. “Guess what: the sales guys wanted to see what was in the ERP system, they wanted to see what got shipped,” he said. “So they spent millions of dollars and after about six years it worked for a week, until someone changed a field in Siebel and the whole thing fell apart. So the enterprise standardised on one suite, from SAP or Oracle. At the very least, they had one throat to choke, one person to blame.”
“Now you can swap the names – SAP and Oracle for NetSuite and Salesforce.com – but the issue remains the same. Cloud computing doesn't solve data integration issues. Web services make it easier to connect these applications but the problem is the data stored in the data model. Microsoft has Microsoft CRM and Microsoft Great Plains – they own the code and they can't make it work together. How's the customer ever going to do it?”
The answer is to adopt a suite-based approach, but make sure it's the right suite, said Nelson. “The suite that wins isn't the sales force automation suite,” he warned. “It's the ERP suite because that holds the only data that they trust: what they sold, what they bought, how much did they pay for it, was it returned and so on. You don't ask your sales guy what you sold that month, you ask your finance guy. If you're building applications on a platform then you need to look at the data model on that platform. If you need data from an ERP system, then you better build your app on an ERP platform, not a CRM platform.”
World of hurt
Cloud computing will also change the nature of the services industry. “There's a world of hurt coming for traditional services companies based on the economics and delivery model of Cloud computing and the expectations of customers,” predicted Nelson. “Someone is going to be the Accenture of the mid-market, it's just not going to be Accenture or any of the top 100 VARs around today. Just as no traditional software company has been successful at delivering SaaS, I believe no traditional services company will be either. Why is this? Someday the traditional VARs will embrace SaaS but they need to go through a transformation just as software firms have.”
He illustrated his point with the example of a $75k perpetual licence for Great Plains versus a $25k NetSuite subscription. “The Great Plains VAR will get one to three times the licence cost to implement it, so you're looking at $75k to $225k to implement Great Plains. Am I going to get $225k to implement a $25k licence? No way! The customer mind set won't buy that. But I still have costs attached to implementing – like business process re-engineering and training – but that's the economic problem for SaaS firms. We run services as a zero gross margin business, we see it as a vehicle for renewals. That's another challenge for services companies – we're not even trying to make a profit in services.”
Nelson suggested that SaaS will become service as software. “At Oracle in the old days, Ray Lane was always talking about needing template accounts where we could reuse customisations from one account to another. It never happened,” he recalled. “But it's always been the Holy Grail of services companies – instead of doing one-off implementations, take the implementation from that customer and use it for another.
"One-off services will become reusable, re-sellable software. Service as software will mean that instead of sending your little man out to do warranties and servicing to every company you sell to, why not send him out once, then take that as software into another account. Take that warranty management system for one customer and inject it into another. Services companies will start to look more like software firms. This is the future of the services industry.”
Freelance Project Management
Cloud computing
By Stuart Lauchlan, news and analysis editor
“The world is about to change, and change in profoundly interesting ways,” declared Jonathan Yarmis, VP for advanced, emerging and disruptive technologies at AMR Research at the Structure O8 conference in California last week. “The enterprise itself hasn’t figured out how to embrace Cloud computing; users are figuring it out very quickly.
“Kids coming out of college will not go to a company that blocks Facebook. Equally importantly, it’s ineffective. It’s all about the user and we’re not going to stop them," he warned. “We talk all about Web 2.0 and Enterprise 2.0. It’s time to start thinking about User 2.0 and the attitudinal differences these new users bring to the equation. Now ad-hoc, socially-oriented, enterprise agnostic users will take wisdom of clouds anywhere, they have no loyalty to company.”
Yarmis said there needs to be a cultural shift to make Cloud computing work. ”When PCs first came in, and even when computers first came in, the first thing we did was task automation,” he said. “The whole rise of enterprise software has really been around process automation. But at the end of the day, we’ve omitted the social aspect. We’ve solved the CEOs problem; what we haven’t solved is the individual sales person, who is trying to figure out 'Who do I know who can get me in the door of some company?'. They are the poster child of the social revolution, because their job is inherently social.”
The matter of the challenges facing salespeople is where software as as a service (SaaS) firms like Salesforce.com and NetSuite come in. Parker Harris, executive vice president and co-founder of Salesforce.com, argued that scale is a primary consideration when developing Cloud applications. “When we started we thought about the scale of the internet — if everyone was using the service at the same time, what would that look like?" he explained. "From the very beginning at the software layer we thought what would it take to build this thing? We architected it not thinking about biggest customers, but about the internet."
The pain point
“When we started, Marc [Benioff] had a vision of the customer experience of Salesforce.com being as easy as buying a book on Amazon.com,” added Harris. “As a technologist, you want to build a platform, but you risk losing touch with what you're building it for. So when we started, we said we're going to build a service that's fast, simple and right the first time.
From a technology point of view, Salesforce.com has now evolved into a platform for application development in its own right. “As a technology, we wanted to build a platform first, one that is beautiful from a technology perspective," said Harris. "But you risk losing touch with why you're doing it. Originally it was going to be for sales people and there were various abstract layers; we quickly realised the need to unify them. We continued adding layers in response to our customers; columns, end user interface. At that point we realised it could be a platform. We didn't consciously do that.”
There were issues of trust surrounding the deployment of Salesforce.com, he conceded. “When we started, a lot of people said they didn't want to trust their information to anyone,” he said. “Data, privacy... these were all big things, and people were concerned with trusting their customer records and leads with another company. We made the huge step, and now people trust the information services. We sell to business. We do a lot of work on compliance and security issues to meet the needs of enterprise. For business, we are very appropriate.”
Of course, things haven't gone entirely smoothly. “About two years ago we did go through some serious issues and part of it was due to eBay. We were in a data centre and they could give us more power but no space, or space and no power. eBay was the dominant tenant. So we moved everything to new data centres,” he said. “The scale-up was so complex, and we had the top people in the industry and it was too complex at that point. Changing everything and pushing the scale created a layer of complexity.
"We eventually worked it out and scaled it up. We made two big mistakes: we changed everything all at once, which is a huge risk for any business, and we moved onto large scale systems. We had an Oracle database that was heading into some bugs. You're always going to have bugs, but changing everything at once and also pushing scale in a vertical sense created a complexity that was just too hard. Then we hired the guy from eBay who had been through it before to make sure it never happened again!
"Maybe the next guys won't hit that pain point, but we hit it, Amazon hit it, eBay hit it, Facebook hit it. We're all very different businesses but we all hit it. It's not like there's a blueprint that says 'this is how you build a massively scalable service. You never replace it with version 2, so you are forever changing it. There are best practices that have evolved, and people should follow them if they want to do this."
Suite-based approach
Also representing the new world of SaaS business applications was Zach Nelson, CEO of NetSuite who turned his attention to the mid-market. “The mid-market is the last great software market,” he declared. “The Cloud is important in the mid-market because it finally makes it economical to reach the Fortune 5 Million. It's always been very difficult to sell business applications to millions and millions of customers. The other thing that makes that market economical is Google. In the old days, you had to send out lots of direct mail and advertising to find the customers. Now they find you through Google.
“No mature software market looks like the mid-market. No one company has more then 10% market share in the mid-market. It's harder to reach them with marketing and sales and with product. It's harder to run a mid-sized company than it is to run a billion dollar corporation. You have the same problems but not the same resources to deal with them. How do you build an application that's rich enough to deal with the problems, but easy enough to be used by everyone? That's the challenge for the mid-market."
Nelson added that the intergation issues of traditional applications deployments do not go away just because of the Cloud. “Most people see the Cloud and they think that all applications magically work together because they are delivered from the Cloud. Nothing could be further from the truth,” he said. “Google takes the credit for some of this. You click on a link in NetSuite or Salesforce.com and you zoom in on a map from Google Earth and find the office you're going to visit. People look at that and they think 'that's easy, maybe I can now have orders in one system and invoices in another and they'll all work together.' No they won't. The web is very good for loosely-coupled applications, but businesses run on very tightly-coupled data models. That's very important if you're considering building applications on one of these platforms.”
Nelson highlighted the old way of buying applications whereby a company would buy Siebel to run sales, SAP to run back office, PeopleSoft to run HR and Broadvision to run the web, then paid ten times as much to tie it all together. “Guess what: the sales guys wanted to see what was in the ERP system, they wanted to see what got shipped,” he said. “So they spent millions of dollars and after about six years it worked for a week, until someone changed a field in Siebel and the whole thing fell apart. So the enterprise standardised on one suite, from SAP or Oracle. At the very least, they had one throat to choke, one person to blame.”
“Now you can swap the names – SAP and Oracle for NetSuite and Salesforce.com – but the issue remains the same. Cloud computing doesn't solve data integration issues. Web services make it easier to connect these applications but the problem is the data stored in the data model. Microsoft has Microsoft CRM and Microsoft Great Plains – they own the code and they can't make it work together. How's the customer ever going to do it?”
The answer is to adopt a suite-based approach, but make sure it's the right suite, said Nelson. “The suite that wins isn't the sales force automation suite,” he warned. “It's the ERP suite because that holds the only data that they trust: what they sold, what they bought, how much did they pay for it, was it returned and so on. You don't ask your sales guy what you sold that month, you ask your finance guy. If you're building applications on a platform then you need to look at the data model on that platform. If you need data from an ERP system, then you better build your app on an ERP platform, not a CRM platform.”
World of hurt
Cloud computing will also change the nature of the services industry. “There's a world of hurt coming for traditional services companies based on the economics and delivery model of Cloud computing and the expectations of customers,” predicted Nelson. “Someone is going to be the Accenture of the mid-market, it's just not going to be Accenture or any of the top 100 VARs around today. Just as no traditional software company has been successful at delivering SaaS, I believe no traditional services company will be either. Why is this? Someday the traditional VARs will embrace SaaS but they need to go through a transformation just as software firms have.”
He illustrated his point with the example of a $75k perpetual licence for Great Plains versus a $25k NetSuite subscription. “The Great Plains VAR will get one to three times the licence cost to implement it, so you're looking at $75k to $225k to implement Great Plains. Am I going to get $225k to implement a $25k licence? No way! The customer mind set won't buy that. But I still have costs attached to implementing – like business process re-engineering and training – but that's the economic problem for SaaS firms. We run services as a zero gross margin business, we see it as a vehicle for renewals. That's another challenge for services companies – we're not even trying to make a profit in services.”
Nelson suggested that SaaS will become service as software. “At Oracle in the old days, Ray Lane was always talking about needing template accounts where we could reuse customisations from one account to another. It never happened,” he recalled. “But it's always been the Holy Grail of services companies – instead of doing one-off implementations, take the implementation from that customer and use it for another.
"One-off services will become reusable, re-sellable software. Service as software will mean that instead of sending your little man out to do warranties and servicing to every company you sell to, why not send him out once, then take that as software into another account. Take that warranty management system for one customer and inject it into another. Services companies will start to look more like software firms. This is the future of the services industry.”
Freelance Project Management
Yahoo no easy meal for Microsoft
AS rumours swirl around the tech world of Yahoo and Microsoft taking yet another tilt at a merger, alliance or other arrangement to compete with Google for online advertising, it's hard not to wonder whether Steve Ballmer and his team are pursuing the wrong partner in the wrong market.
Microsoft's most visible recent plays have been consumer-oriented wins such as Xbox and games, and duds such as MSN and online search, but since 2000 the real growth action has been sales to (and footprint inside) enterprise IT users.
Across all but the top end of the server market Windows has swept aside proprietary Unix competitors such as Solaris and Hewlett-Packard Unix, leaving Linux as the only real rival.
Redmond has also built strong positions in email, databases, small business enterprise resource planning and other small business applications.
Meanwhile, corporate purchases of desktop Windows and Office remain great franchises, even if they are no longer the growth drivers they once were.
This begs an obvious question: should Microsoft be seeking a different way to reinvent itself rather than the right permutation with an obviously reluctant partner that is bleeding talent and falling further behind Google with each day that its myopic and anti-shareholder leaders continue to equivocate?
It's a little more than four years since Microsoft and another enterprise software giant, Germany's SAP, called off secret merger talks because a combination of the two would be too complicated to integrate and manage -- and too powerful to pass anti-trust scrutiny.
During those four years, rumours of renewed interest from Microsoft and/or SAP in a deal have surfaced periodically, but nothing concrete has been confirmed. Nor have those impediments to a deal disappeared.
Still, a lot has changed since 2004 to make a deal like the one mooted back then look a lot more plausible:
* Oracle has used acquisitions to build itself into a potent counterweight to SAP in the market for high-end enterprise planning, process automation and business intelligence apps -- leaving Microsoft, IBM and HP in the dust, and possibly reducing anti-trust concerns.
* As a result, the once-solid relationship between Oracle and SAP has cooled and at times become downright hostile.
* As it has tried to broaden beyond large corporations and governments, SAP has run into mounting competition for smaller sales from software-as-a-service plays such as Salesforce.com and Netsuite (and from Microsoft's Dynamics packaged software, derived from acquisitions of Great Plains and Navision).
* With Gmail and its initial iterations of ad-supported online productivity apps, Google has made it clear it plans to attack Microsoft's corporate apps business.
* Microsoft, which had never spent more than $US1.5 billion on a purchase at the time of the 2003-04 talks with SAP, has shown a willingness to do much bigger deals, such as 2007's $US6 billion purchase of web marketer aQuantive and its recent $US45 billion bid for Yahoo.
* Microsoft also has a lot more experience of integrating acquisitions, as a result of bedding down the deals it did not long before the SAP talks (Visio, Navision, Great Plains) and deals it has done since (TellMe, aQuantive, FAST).
* Anti-trust concerns among US and EU regulators over most packaged software markets have faded because of the rise of web services and Microsoft's efforts to settle cases and play nicely with others.
At a more abstract level, focusing on the enterprise (including enterprise desktops) amid the emergence of web services and software-as-a-service seems a terrific way to sidestep Google's strengths and turn what today is depicted as a simple face-off between packaged licensed software and ad-supported services into a more complex game.
For a start, it is hard to see any but the smallest businesses switching to workplace desktop apps paid for by trailing enticing (and distracting) ads in front of their employees.
(Unless the business itself is the main entity making money when its employees click on them?) Far more subtle models will be needed than in the consumer space.
Of course, there are also plenty of reasons why a Microsoft-SAP deal (which is not the only way Ballmer and his team could make a game-changing, enterprise-oriented play, but certainly the most emphatic and far-reaching option) would involve daunting challenges, just as it did in 2004.
* SAP still costs a bomb: $US63 billion, or half as much again as Microsoft's withdrawn full takeover bid for Yahoo. Moreover, there is no particular sign that its leaders are seeking a sale.
* As the unwinding of DaimlerChrysler reminded everyone, cross-border mergers, particularly between companies with vastly different cultures and histories, are notoriously difficult to make work.
* Neither Microsoft nor SAP has as yet shown much success in the embryonic software-as-a-service space, although both seem to have all the skills and competencies needed to do so if they can face the resulting cannibalisation of their existing business models.
* Both Microsoft and SAP face increasing competition from open source (although up to this point it has posed little direct threat to SAP).
* Putting together two leviathans makes the law of large numbers that much harder to overcome if the objective is flashy growth rates -- although realistically, neither company is really priced as a growth stock any more.
Perhaps the biggest hurdles to a renewed look at SAP (or any other enterprise-oriented alternative to the current blinkered pursuit of Yahoo, Google and online ad revenues) is that it would represent such a reversal of Microsoft's recent rhetoric.
Tilting Microsoft further towards enterprise IT and away from its long dominance of the consumer market, in a sense, also requires a rewiring of the company's DNA which might be beyond Ballmer.
As so many recent retrospectives on Bill Gates have underscored, the lasting greatness and achievement of the company he founded rests on its success in making computing accessible to everyone: in putting a PC on every desktop.
To turn away from that heritage, even in the sense of skewing resources and future priorities towards a more focused set of users who happen to be willing to hand over cash, would not be easy.
It might, however, be necessary if Microsoft is to retain its dominance and market clout as the pursuit of Yahoo moves into its sixth month with no end in sight and no assurance of success even if a deal does get done.
Microsoft's most visible recent plays have been consumer-oriented wins such as Xbox and games, and duds such as MSN and online search, but since 2000 the real growth action has been sales to (and footprint inside) enterprise IT users.
Across all but the top end of the server market Windows has swept aside proprietary Unix competitors such as Solaris and Hewlett-Packard Unix, leaving Linux as the only real rival.
Redmond has also built strong positions in email, databases, small business enterprise resource planning and other small business applications.
Meanwhile, corporate purchases of desktop Windows and Office remain great franchises, even if they are no longer the growth drivers they once were.
This begs an obvious question: should Microsoft be seeking a different way to reinvent itself rather than the right permutation with an obviously reluctant partner that is bleeding talent and falling further behind Google with each day that its myopic and anti-shareholder leaders continue to equivocate?
It's a little more than four years since Microsoft and another enterprise software giant, Germany's SAP, called off secret merger talks because a combination of the two would be too complicated to integrate and manage -- and too powerful to pass anti-trust scrutiny.
During those four years, rumours of renewed interest from Microsoft and/or SAP in a deal have surfaced periodically, but nothing concrete has been confirmed. Nor have those impediments to a deal disappeared.
Still, a lot has changed since 2004 to make a deal like the one mooted back then look a lot more plausible:
* Oracle has used acquisitions to build itself into a potent counterweight to SAP in the market for high-end enterprise planning, process automation and business intelligence apps -- leaving Microsoft, IBM and HP in the dust, and possibly reducing anti-trust concerns.
* As a result, the once-solid relationship between Oracle and SAP has cooled and at times become downright hostile.
* As it has tried to broaden beyond large corporations and governments, SAP has run into mounting competition for smaller sales from software-as-a-service plays such as Salesforce.com and Netsuite (and from Microsoft's Dynamics packaged software, derived from acquisitions of Great Plains and Navision).
* With Gmail and its initial iterations of ad-supported online productivity apps, Google has made it clear it plans to attack Microsoft's corporate apps business.
* Microsoft, which had never spent more than $US1.5 billion on a purchase at the time of the 2003-04 talks with SAP, has shown a willingness to do much bigger deals, such as 2007's $US6 billion purchase of web marketer aQuantive and its recent $US45 billion bid for Yahoo.
* Microsoft also has a lot more experience of integrating acquisitions, as a result of bedding down the deals it did not long before the SAP talks (Visio, Navision, Great Plains) and deals it has done since (TellMe, aQuantive, FAST).
* Anti-trust concerns among US and EU regulators over most packaged software markets have faded because of the rise of web services and Microsoft's efforts to settle cases and play nicely with others.
At a more abstract level, focusing on the enterprise (including enterprise desktops) amid the emergence of web services and software-as-a-service seems a terrific way to sidestep Google's strengths and turn what today is depicted as a simple face-off between packaged licensed software and ad-supported services into a more complex game.
For a start, it is hard to see any but the smallest businesses switching to workplace desktop apps paid for by trailing enticing (and distracting) ads in front of their employees.
(Unless the business itself is the main entity making money when its employees click on them?) Far more subtle models will be needed than in the consumer space.
Of course, there are also plenty of reasons why a Microsoft-SAP deal (which is not the only way Ballmer and his team could make a game-changing, enterprise-oriented play, but certainly the most emphatic and far-reaching option) would involve daunting challenges, just as it did in 2004.
* SAP still costs a bomb: $US63 billion, or half as much again as Microsoft's withdrawn full takeover bid for Yahoo. Moreover, there is no particular sign that its leaders are seeking a sale.
* As the unwinding of DaimlerChrysler reminded everyone, cross-border mergers, particularly between companies with vastly different cultures and histories, are notoriously difficult to make work.
* Neither Microsoft nor SAP has as yet shown much success in the embryonic software-as-a-service space, although both seem to have all the skills and competencies needed to do so if they can face the resulting cannibalisation of their existing business models.
* Both Microsoft and SAP face increasing competition from open source (although up to this point it has posed little direct threat to SAP).
* Putting together two leviathans makes the law of large numbers that much harder to overcome if the objective is flashy growth rates -- although realistically, neither company is really priced as a growth stock any more.
Perhaps the biggest hurdles to a renewed look at SAP (or any other enterprise-oriented alternative to the current blinkered pursuit of Yahoo, Google and online ad revenues) is that it would represent such a reversal of Microsoft's recent rhetoric.
Tilting Microsoft further towards enterprise IT and away from its long dominance of the consumer market, in a sense, also requires a rewiring of the company's DNA which might be beyond Ballmer.
As so many recent retrospectives on Bill Gates have underscored, the lasting greatness and achievement of the company he founded rests on its success in making computing accessible to everyone: in putting a PC on every desktop.
To turn away from that heritage, even in the sense of skewing resources and future priorities towards a more focused set of users who happen to be willing to hand over cash, would not be easy.
It might, however, be necessary if Microsoft is to retain its dominance and market clout as the pursuit of Yahoo moves into its sixth month with no end in sight and no assurance of success even if a deal does get done.
Friday, June 20, 2008
i5 named 2008 Global Microsoft Dynamics CRM Partner of the Year
[ Johannesburg, 20 June 2008 ] - South African company i5 has been named the first global winner of the Microsoft Partner of the Year award in the category, Microsoft Dynamics CRM. The award is to be presented at the Worldwide Partner Conference in Houston, Texas, in July.
According to i5 CEO Glen Ansell, the award is the culmination of the company's determination and sharp focus on the Microsoft technology stack, and specifically, Dynamics CRM. "Having recognised the viability and relevance of Microsoft's CRM package soon after the inception of i5 in 2004, our company took a strategic decision to become the South African market leader in this aspect of Microsoft's technology solutions," he says.
Ansell explains that i5's primary competencies lie in Microsoft Dynamics CRM, Microsoft Dynamics ERP Products and Information Worker competencies, such as Portals, Collaboration and Business Intelligence.
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Despite being a relative newcomer on the scene, i5's passion and dedication to creating value for its customers has seen the company quickly build a client list which includes some of South Africa's leading blue-chip businesses.
While winning awards is not new to the company - it has received numerous accolades from Microsoft including three at Microsoft Partner Summit 2006 and Independent Software Vendor of the year in 2007 - he notes that this is the company's biggest triumph to date.
"There were over 2 000 entries in the awards programme this year from around the globe; this I believe is the result of the commitment and hard work of every individual within this business. Microsoft's recognition of our ability is testament to the dedication, innovation, symbiotic interactions and overall passion that i5 exhibits in its engagement with peers, customers and partners," he says.
Ansell believes that while this is an award of some consequence, it is just the start of the company's accelerating momentum. "Watch out, there are great things about to happen where i5 is concerned."
According to i5 CEO Glen Ansell, the award is the culmination of the company's determination and sharp focus on the Microsoft technology stack, and specifically, Dynamics CRM. "Having recognised the viability and relevance of Microsoft's CRM package soon after the inception of i5 in 2004, our company took a strategic decision to become the South African market leader in this aspect of Microsoft's technology solutions," he says.
Ansell explains that i5's primary competencies lie in Microsoft Dynamics CRM, Microsoft Dynamics ERP Products and Information Worker competencies, such as Portals, Collaboration and Business Intelligence.
advertisement
Click here
Despite being a relative newcomer on the scene, i5's passion and dedication to creating value for its customers has seen the company quickly build a client list which includes some of South Africa's leading blue-chip businesses.
While winning awards is not new to the company - it has received numerous accolades from Microsoft including three at Microsoft Partner Summit 2006 and Independent Software Vendor of the year in 2007 - he notes that this is the company's biggest triumph to date.
"There were over 2 000 entries in the awards programme this year from around the globe; this I believe is the result of the commitment and hard work of every individual within this business. Microsoft's recognition of our ability is testament to the dedication, innovation, symbiotic interactions and overall passion that i5 exhibits in its engagement with peers, customers and partners," he says.
Ansell believes that while this is an award of some consequence, it is just the start of the company's accelerating momentum. "Watch out, there are great things about to happen where i5 is concerned."
Wednesday, June 18, 2008
Mada Communications deploys Microsoft CRM
Mada Communications (formerly Arab Telecom) has implemented Microsoft Dynamics CRM to replace its in-house system.
"Before we were using an in-house portal to manage all our connections and clients and we found that, with our growth, we really do need something more efficient like a CRM to manage our client dealings, invoicing, and to be more efficient because we are expanding our customer base," said sales and managing director, Shahad Ibrahim.
The new CRM system went live two months ago, and Mada are already seeing results, according to Ibrahim.
"It's made staff faster and more efficient, it's much easier to track and there's easier reporting. It has had an impact and we've just been using it for the last couple of months," she said.
Mada provides wireless data and Internet services to enterprises and government institutions, and is now looking to move into the consumer market.
"Before we were using an in-house portal to manage all our connections and clients and we found that, with our growth, we really do need something more efficient like a CRM to manage our client dealings, invoicing, and to be more efficient because we are expanding our customer base," said sales and managing director, Shahad Ibrahim.
The new CRM system went live two months ago, and Mada are already seeing results, according to Ibrahim.
"It's made staff faster and more efficient, it's much easier to track and there's easier reporting. It has had an impact and we've just been using it for the last couple of months," she said.
Mada provides wireless data and Internet services to enterprises and government institutions, and is now looking to move into the consumer market.
Newmarket Intros Hospitality Product for Microsoft CRM
By David Sims
TMCnet Contributing Editor
Newmarket International, a vendor of sales and catering products for the hospitality industry, today announced “Newmarket Connex” forMicrosoft ( News - Alert) Dynamics CRM.
This product allows hospitality workers in the central sales office to manage and source groups and meetings business from directly within Microsoft Dynamics CRM to their individual properties. Request for proposals, responses and business actuals are all exchanged between the central sales office and the individual properties through Connex.
By centralizing the groups and meetings sales process into one application, the central sales office hopes to have visibility into all the details associated with a customer, the RFP and the event, according to the company.
Newmarket officials say: “The result is the ability to respond to RFPs faster than the competition, improving the win percentage and streamlining the sales process.”
Hospitality organizations need a lead management product to “help them manage the details and logistics that go into every meeting and customer interaction,” said Sandra Andrews, U.S. hospitality industry products director for Microsoft. “Newmarket Connex, integrated with Microsoft Dynamics CRM, helps address this need by ensuring the RFP process is part of the overall CRM application.”
Features of Newmarket Connex for Microsoft Dynamics CRM include the ability to manage room block, event and meeting detail information for group and meetings business opportunities within Microsoft Dynamics CRM, and to source opportunities as meetings or RFPs to your portfolio of hotels from the Microsoft Dynamics CRM product.
Earlier this month, Microsoft announced the general availability of Microsoft Dynamics AX 2009, described by company officials as “an adaptable business management product” offering capabilities aimed at helping users “streamline processes, reduce operational costs and manage compliance.”
The product offers “new multisite and shared services capabilities” for financial and supply chain management.
“For example,” company officials say, “the new software can run multiple legal entities on a central installation and provide a single, integrated view of financial and supply chain information from facilities around the world.”
Planning and reporting scenarios, such as consolidation and budgeting, are offered through integration with Microsoft Office PerformancePoint Server.
R. “Ray” Wang of Forrester (News - Alert) Research in the firm’s report “Microsoft Dynamics Gets
Renewed Focus” in April 2008, noted the “role-based user experience, improved reporting and BI capabilities, and improving platform harmonization” of the product.
TMCnet Contributing Editor
Newmarket International, a vendor of sales and catering products for the hospitality industry, today announced “Newmarket Connex” forMicrosoft ( News - Alert) Dynamics CRM.
This product allows hospitality workers in the central sales office to manage and source groups and meetings business from directly within Microsoft Dynamics CRM to their individual properties. Request for proposals, responses and business actuals are all exchanged between the central sales office and the individual properties through Connex.
By centralizing the groups and meetings sales process into one application, the central sales office hopes to have visibility into all the details associated with a customer, the RFP and the event, according to the company.
Newmarket officials say: “The result is the ability to respond to RFPs faster than the competition, improving the win percentage and streamlining the sales process.”
Hospitality organizations need a lead management product to “help them manage the details and logistics that go into every meeting and customer interaction,” said Sandra Andrews, U.S. hospitality industry products director for Microsoft. “Newmarket Connex, integrated with Microsoft Dynamics CRM, helps address this need by ensuring the RFP process is part of the overall CRM application.”
Features of Newmarket Connex for Microsoft Dynamics CRM include the ability to manage room block, event and meeting detail information for group and meetings business opportunities within Microsoft Dynamics CRM, and to source opportunities as meetings or RFPs to your portfolio of hotels from the Microsoft Dynamics CRM product.
Earlier this month, Microsoft announced the general availability of Microsoft Dynamics AX 2009, described by company officials as “an adaptable business management product” offering capabilities aimed at helping users “streamline processes, reduce operational costs and manage compliance.”
The product offers “new multisite and shared services capabilities” for financial and supply chain management.
“For example,” company officials say, “the new software can run multiple legal entities on a central installation and provide a single, integrated view of financial and supply chain information from facilities around the world.”
Planning and reporting scenarios, such as consolidation and budgeting, are offered through integration with Microsoft Office PerformancePoint Server.
R. “Ray” Wang of Forrester (News - Alert) Research in the firm’s report “Microsoft Dynamics Gets
Renewed Focus” in April 2008, noted the “role-based user experience, improved reporting and BI capabilities, and improving platform harmonization” of the product.
Friday, June 6, 2008
Frontpages Offers Microsoft CRM 4.0
The relatively newly-minted Microsoft Gold Partner - as of January of this year - announced on Friday that it has begun offering Microsof Dynamics CRM 4.0 hosting to provide customers with an integrated on-demand customer relationship management solution.
With prices ranging as diverse as $99 for small business solutions, $495 per month for corporate and $4,595 per month for enterprise offerings, the company is seeking to serve a wide range of CRM needs with the solution.
Frontpages provides a pretty wide range of managed and hosted services, including a fairly extensive selection of Microsoft-developed products. It offers SharePoint, Exchange, Project, PerformancePoint, Office Communications Server and SQL, along with dedicated server hosting.
In early May, the company announced that it had added a set of additional management services designed to provide its dedicated customers with a more managed solution.
And in late April, the company announced it had launched a shared hosting solution for Microsoft Office SharePoint Server.
While some hosted Microsoft solutions, such as Exchange, are generally accepted to be the leading products in their respective markets, the company's CRM solution is one of a handful of products competing for share of a more established market. The decision to use Microsoft's solution is likely based more on the company's relationship with Microsoft, and the advantages that holds, than the product's position in the CRM market.
This, more than likely, is an important part of Microsoft's strategy in building appreciation for the CRM product. In its announcement, Frontpages says the solution integrates with Microsoft Office and Outlook to improve business processes for sales and marketing, and customer services teams.
"Our hosted CRM offerings allow customers to begin utilizing the system quicker and at a lower cost than in-house solutions," says Rob LaMear, Frontpages president, in the company's announcement.
With prices ranging as diverse as $99 for small business solutions, $495 per month for corporate and $4,595 per month for enterprise offerings, the company is seeking to serve a wide range of CRM needs with the solution.
Frontpages provides a pretty wide range of managed and hosted services, including a fairly extensive selection of Microsoft-developed products. It offers SharePoint, Exchange, Project, PerformancePoint, Office Communications Server and SQL, along with dedicated server hosting.
In early May, the company announced that it had added a set of additional management services designed to provide its dedicated customers with a more managed solution.
And in late April, the company announced it had launched a shared hosting solution for Microsoft Office SharePoint Server.
While some hosted Microsoft solutions, such as Exchange, are generally accepted to be the leading products in their respective markets, the company's CRM solution is one of a handful of products competing for share of a more established market. The decision to use Microsoft's solution is likely based more on the company's relationship with Microsoft, and the advantages that holds, than the product's position in the CRM market.
This, more than likely, is an important part of Microsoft's strategy in building appreciation for the CRM product. In its announcement, Frontpages says the solution integrates with Microsoft Office and Outlook to improve business processes for sales and marketing, and customer services teams.
"Our hosted CRM offerings allow customers to begin utilizing the system quicker and at a lower cost than in-house solutions," says Rob LaMear, Frontpages president, in the company's announcement.
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