Oracle and Salesforce duke it out in service
Market analysis firm IDC figures the market for service and support software will reach $4.2 billion before the end of the first Obama administration. That’s reason enough for software vendors to want to be all over the market like a cheap suit, like white on rice, like a junkyard dog. But as the market moves from on premise to on-demand you can expect the revenue potential to go way down. That’s the beauty of on-demand computing — score one for the customer.
But whether it’s a billion or four, it’s still real money and enough to motivate lots of people’s behaviors so it was no surprise that both Salesforce.com and Oracle shored up their service and support offerings this week. What was fascinating to me is that despite all the secrecy surrounding each company’s announcement, which I witnessed first hand, the two CRM titans managed to make similar announcements within a day of each other.
I attribute the coincidence to the simple logic of the situation. Each company has built out very good offerings in sales and marketing and each is making its attempts in social media so it was time that each gave some attention to service and support.
To be rigorously fair, each company has devoted significant time and attention to the subject and each made announcements about intention and direction earlier this year or very late last year so it is no surprise that they decided to redeem their pledges and September is a great time to do just that. So what’s what and what different? Well…
Oracle announced integration between Oracle CRM On Demand and InQuira’s Web self-service applications. The integration lets customers go seamlessly from self-service to live agent-assisted service, according to the press release. This is a big deal because it enables customers to escalate their service requests and provide the service agent with a warm case full of basic information about the customer and the problem. This completes a trip started with integration between Inquira and Oracle’s on-premise service and support systems.
Meanwhile on Wednesday, Salesforce redeemed a promise it made when it announced the acquisition of InStranet. Salesforce said that it has successfully ported the technology to its cloud platform so that its customers can now use all of the cloud platform functionality such as user interface development and customization tools as well as workflow and approvals and its knowledge publishing capability.
To me Oracle’s announcement is more about service – and I think it’s important to tease apart service and support here. Service being an issue that a customer has that can only be dealt with by the vendor and support falling into the category of how to use/fix a product. Each is important and this in no way elevates one over the other, it’s just my observation.
Ok, the Oracle scheme takes a customer with a service issue from a self-service modality to an interaction with a live agent while preserving the thread of the interaction. No more, “Can you give me your account number again?” and hopefully faster more accurate service.
The Salesforce announcement says that customers with how to use/fix issues can access the wisdom of peer users. This is a good thing and a little brave on the part of companies who use it because it says a lot about the faith they place in their customers and ultimately the confidence they have in their own processes and procedures. Using social media like Facebook, the Salesforce solution helps companies to gather input from customers and organize it through stack ranking and other crowd sourcing techniques to bubble up answers to customer problems.
Vendors like the Salesforce solution because it has a very low cost profile and customers should like it because it gives them the answers they need much faster. Vendors should like the Oracle approach for very similar reasons.
Frankly it’s nice to see such heavy investment in customer service and support and the resulting benefits. I think these announcements say a lot about the relative importance of keeping existing customers happy in today’s economy vs. the never-ending quest for new customers. It speaks to the growing maturity of the CRM market and the growing clout that customers have. Good for us.
On another note, Oracle is running a string of successes in CRM. They’ve made some good numbers recently and they are generating some interesting products. It has been a few years since Salesforce has been challenged to the degree that Oracle now challenges it. Nonetheless, in two consecutive weeks with big announcements (last week was contact manager) Salesforce is the common denominator. Simply put these guys are investing heavily in R&D and they have the goods to show for it and I would give the edge for raw sex-appeal to Salesforce.
But two weeks is just a snapshot. Oracle Open World is coming in October, and Dreamforce is in November. Expect some fireworks.