CRM @ C
Finally, Paul Greenberg’s new edition of CRM at the Speed of Light hit the streets last week and with it my description of him as our Walt Whitman remains in tact. To promote the continuing franchise the fourth edition’s cover has the same design as the third edition but with a different color scheme. But that’s about the only similarity between editions; everything between the covers of edition four is new.
This time, Greenberg’s sub-title tells us he’s focusing on “Social CRM Strategies, Tools, and Technologies for Engaging Your Customers.” That’s a mouthful worthy of the more than 600 pages he dedicates to the task — and that doesn’t even count the chapters that are available only online.
Before we go on, let’s have a moment with the truth squad. Paul Greenberg is a friend and he graciously invited me to make a few very small contributions to the book, so my discussion here might look to some like self-promotion. If that’s how you think then you might want to go rearrange your sock drawer. If you read on just know that that there is a good deal of agreement between Paul and me as well as many of the analysts that follow the market. That’s not to say we all think so much alike that if you sent ninety-nine out of one hundred of us to a Maoist re-education camp it wouldn’t matter. It would.
CRM at the Speed of Light has always occupied an important niche in our world. It continues to be the source for authoritative definitions and explanations of what CRM is and where it is going. If you are within the CRM inner circle you might want to conclude that definitions and categorization are no longer needed. But if you talk to real people trying to make sense of the world through a CRM lens you quickly discover the great service this book provides.
The centrality of the customer and the importance of “relationship” over “management” — two criticisms from CRM’s past — are noted and form the motive force of this book. Greenberg’s gift to us is to take a four-dot-oh look at a two-dot-oh market and to help us see where it’s all going. Paul covers ideas like Social CRM and customer experience with equal ease. And while we might disagree on some of the specifics of how these things relate to the CRM market at large (see I can be independent) it all coheres.
One of the greatest assets of the book is Greenberg’s style, which is intelligent and conversational. In fact, conversational is a poor word choice because Paul’s natural chattiness comes through the page and into your mind so that at times you forget you are reading rather than listening to a smart and entertaining monologue.
CRM has become a big topic. It’s roughly a fourteen billion dollar market and the nuances in even what companies call it and how vendors address the market can be significant. Nonetheless, Paul does a good job of building categories and running down the differences until they make sense.
A good example is chapter nine on user communities. We think we know what communities are and in a folklorish way we do but Greenberg does a great job of teasing apart the differences as well as the pros and cons of managed and unmanaged communities, outcome-based social networks and a lot more. But even more importantly, he then dives in and advises us about managing communities and offers important do’s and don’t’s.
In trying to categorize this book I was left with the feeling that it most resembles a text from medical school that details the causes and cures of diseases one after another. Few people read those books straight through but use them as reference guides, for example, when a young doc might be trying to nail down a diagnosis. I expect that it will end up on the book shelves of many mid-level executives and even their bosses who want a good reference to enlighten them about the technologies that can help them run their businesses.
But CRM at the Speed of Light, fourth edition, is also a book that you’ll want to read every page of if you have an abiding interest in the subject.
On the road (again)
Colorado Springs is an interesting place. Despite the name there are no “springs” it’s an arid place in a valley surrounded by the southern Rocky Mountains and Pikes Peak National Park (for sticklers Pikes really should be Pike’s but the official U.S. naming convention eliminates the apostrophe). The springs were an invention of the railroads seeking to establish a destination for vacationers. Good idea, it’s a nice place.
You can ride horseback through the mountains and see abandoned mines and homesteads as well as some rugged natural beauty. Last time I was there we rode on some trails that were barely wide enough to accommodate our horses. On one side there was forest and on the other a steep drop off. RightNow convenes its annual user group meeting at the Broadmoor Hotel in Colorado Springs next week. By most accounts it’s been a good year for software, especially SaaS vendors so the meeting should be upbeat.
Other commitments will keep me from attending the RightNow Summit but I look forward to hearing about their announcements. In general there is an unmistakable move in most areas of CRM, contact centers included, to move more operations to an on-demand footing. Whether it’s called SaaS, managed or hosted, the call center is moving to simpler surroundings — at least for the client organization, and for good reasons.
Owning and operating a call center is a big and expensive undertaking for a company. With all phases of the operation in-house, a company has to be able to support multiple subject matter experts from hardware to applications. The company also has the task of managing an impressive (some would say bewildering) array of gear both telephonic and computer. The same company also has all of the headaches of recruiting, training and managing a sophisticated workforce.
So, when a vendor comes along offering to take even a portion of that big job over for a fixed price per seat, it draws a lot of attention. In the not too distant past, the number of vendors willing to make such an offer was limited and RightNow was at the top of the heap. The market is changing making it easier for vendors to get into the business and the fact that we are even talking about the difference between on-demand, managed and SaaS solutions is evidence of that change.
But it’s not just changing technology that is driving the market. The core customers, you and me, are smarter and more experienced and we are beginning to draw less from our vendors’ call centers. Since we’ve all experienced earlier generations of products we are more likely to solve simpler problems with new products ourselves. Moreover, our recently acquired sophistication with social media makes us more adventurous when it comes to seeking out service and advice from our peers.
It was no surprise to me that RightNow acquired social networking company HiveLive to bolster its efforts in social service offerings. I look forward to hearing what RightNow CEO Greg Gianforte has to say about his company’s direction in socialized service and support. Should be an interesting conference.
Also on the docket, the following week Sage Software hosts its user meeting in Atlanta followed by Microsoft holding an analyst briefing in Redmond. I wish I could make all of these events but they are simply too close together.
Sage is always surprising in part because the company’s business model — selling exclusively through the indirect channel — puts different demands on its products and services. That has frequently meant that the company has held back on major innovations until its partners were ready to get on board. But last year, the company announced a 2010 strategy to bring its multiple CRM products under an umbrella that will enable it to achieve greater economies of scale and better integration capabilities with its back office solutions.
Also, Sage recently announced a foray into another on-demand style solution to be delivered early next year. Their original SageCRM.com notwithstanding, this will be something new for SalesLogix, their high end product. This is CEO Sue Swenson’s second year at the helm and it was clear at the partner meeting in May that she’s putting her imprint on the company. She’s tasked senior executives with ambitious plans to update key products and improve partner-facing programs. It will be interesting to see what end user facing changes are in the offing.
Finally, Microsoft is a very important player in the front and back office applications markets today. Their analyst meeting in the same week as the Sage user meeting should generate a few headlines and I am eager to hear more about their direction though I will not be able to be there.
All this activity makes me optimistic about next year, and if all this isn’t enough, Intel, AMD and IBM have all reported better than expected financial results for the recently finished quarter. The semiconductor market has always been a reliable indicator of an upturn in the tech sector and I am hopeful that these results are the first signs of a general economic rebound. But recovery means more than simply reporting better financial results especially if the increase is from a depressed level caused by recession. It’s clearly a half full glass but that’s fine with me.
Fusion applications decide an argument, sort of
With Oracle’s announcement of Fusion applications, you can make a reasonable case that Salesforce.com has won an important ten-year old argument about the future of the software industry. Notwithstanding SAP, the only significant outlier left, Oracle is the last major software company to adopt on-demand computing as a centerpiece thus awarding legitimacy and critical mass once and for all to the idea.
Amen.
But the Oracle announcement says more about business models than technology paradigms and at the model level it is not clear that Salesforce has won. Salesforce CEO Marc Benioff’s vision of business applications delivered over the internet has won an important victory but the business model — subscription services — that makes this technology the center of the movement and exclusive delivery mechanism has not eliminated all competition. Not yet, at any rate.
The reasons are simple enough, market reticence generated by concerns — both real and imaginary — about security or the viability of the technology model still hamper full adoption of the business model. As a result, companies as diverse as Oracle, Microsoft and Sage have hedged their bets by offering technology that can be implemented in numerous ways including on-demand as well as by conventional deployments. As a result vendors have effectively thrown the business model decision over the wall to the customer.
With software capable of, shall we say, polymorphous deployment, the ultimate decision about how to deploy now becomes the exclusive province of the customer as the vendors have now turned into Solomon or, in a modern interpretation, Burger King. Customers are completely free to have it their way or ways. They can deploy business applications in a fully SaaS configuration or in hybrid ways that are to a lesser extent owned and operated by the IT department. As I have noted before, this is typical transition state behavior of vendors straddling two diverse paradigms.
It is no surprise that adoption of the business model lags adoption of the technology. It has always been true that conversion from traditional software licensing to SaaS is a big step and one that for many software companies could lead to financial ruin if not handled expertly. More to the point, there are customers who, for reasons of security, custom and preference believe that SaaS computing is not for them, at least not now.
So it is no surprise therefore that the most successful SaaS companies are those that, like Salesforce, grew organically from on-demand roots. Other successful SaaS companies like Oracle bought their way into SaaS computing, a time honored tradition when adopting new models.
Even before Oracle’s Fusion announcement at Open World this month, the company had been a player in SaaS based CRM with Oracle CRM On-Demand due to its earlier acquisition of Siebel Systems. But it remains to be seen if any software vendor can fully realize the benefits of SaaS — and now Cloud Computing without full emersion into the technology model.
One of the most powerful aspects of SaaS computing is not the idea of subscriptions or even Internet delivery but of a single version of the applications supporting all users. With a single version of the code, all users have the same foundation on which to configure, modify and build new applications. The single code set — also called multi-tenant architecture — makes it hugely unlikely that any two independent software makers would develop incompatible applications and therein lays the power of the business model.
This single idea makes it highly likely that applications built to the standards of the foundation — or platform as we like to call it — will be able to inter-operate. Take this standard away and you have the same Babel of competing standards and proprietary designs that have been the bain of the software industry. There is a cost associated with this lack of standardization and software customers have been paying it for decades — with rising resentment.
That cost is not measured strictly monetarily; there is opportunity cost involved too. When everyone played by the same conventional software rules the opportunity cost problem was equivalent to a farmer experiencing bad weather. But SaaS computing eliminates the weather variable giving a big advantage to companies under its umbrella. So it is ironic that the decision about adoption is still left to taste.
With most of the hybrid products, the same code can be deployed in a conventional multi-tenant way or as a standalone system behind a traditional firewall. The segregated system becomes a unique instance the moment a developer modifies the platform. Doing that makes the idea of standards a waste of time.
But for the time being — and I am still calling it a transition state — we can expect to see a lot of deployments in which the software is SaaS ready but the deployment is decidedly twentieth century. In the next five to ten years we will see examples of companies trying to back out of their proprietary SaaS-like systems to finally get on board with SaaS or Cloud Computing. It will all have been avoidable and it will be good business for software consultants.
As Kurt would say, “So it goes.”
Thanks, Mr. Voltaire
This is very interesting. Oracle introduced Oracle VM Template for Siebel CRM. You almost don’t need to know what a VM template is — OK, it’s a virtual machine architecture that enables customers to reduce the number of real servers they have. But that’s not the big news — the big news is that Oracle is positioning this innovation as a GREEN idea.
Yes, right in the press release they say, “By helping to reduce the number of servers needed through deployment in a virtualized environment, Oracle VM Templates for Siebel CRM effectively promote green computing and can dramatically cut costs on server purchases and maintenance, as well as energy use.
Kudos to Oracle, I say. They’ve taken on Green ideas as an important part of CRM and begun making products that reflect most people’s concerns about global warming. Fewer servers means less power to run them, air condition them and all the rest.
Of course, the greenest approach to server reduction is SaaS where a small number of very robust servers support millions of users a la Salesforce.com. But this is no time to make such comparisons and a great time to drag out one of my favorite quotes from Voltaire, “The perfect is the enemy of the good.” (This proves my liberal education was really worth it.)
Simply put, running past good and seeking perfection is akin to reaching a level of diminishing returns. It would be great if SaaS took over the world and it might but not today. Meanwhile, wouldn’t it be really cool if every major corporation at least got on board with a virtual machine architecture?
NetSuite summer announcement
The headline on the press release read: “NetSuite Offers Sage Partners Major Incentives to Begin Growing their Business on the NetSuite Cloud” and I figured, it must be summer. For the last few years, Sage has announced an offer like this. For the last couple of years it was a take away program for salesforce.com customers.
I like NetSuite, they offer a good package of ERP and CRM software delivered as a SaaS service. They’ve made a lot of smart moves in the last couple of years including their IPO (which was not just smart but brilliant) and an apparent decision to move up market from their original SMB focus.
Going after larger companies made sense because I think NetSuite found out that their then target market didn’t have all of the resources — human and financial — needed to implement such an all-encompassing suite of software. Though the product is good, any ERP implementation comes with a great deal of thought work that’s needed to rationalize business processes before automating them. I think some small companies just choke on the effort.
Now it looks like NetSuite is trying to go after the SMB space again, this time with a full court press on Sage’s partners. Just as I like NetSuite I like Sage too. As a company Sage certainly has product and partner issues, but any company does. What’s interesting to me about the NetSuite PR is the hyperbole it exudes.
Though the PR has several quotes from Sage partner take-aways the text is over the top. One paragraph starts with, “NetSuite expects this program will find a warm reception in a Sage channel partner community wracked with fear, uncertainty and doubt about the future of on-premise applications…”
Wracked with fear? Really?
I have to say I used to wonder about Sage too and about when they’d get their SaaS act together. They’ve been late to the party, but not AWOL, they have products, especially in the CRM world. Lately, though, I’ve concluded that Sage might know something about the space that I’ve been missing. It’s a rather conservative market from the perspective of new product adoption.
The obvious success of SaaS in CRM may be enough to move the ERP partners but maybe not. Undoubtedly some will move, the PR is proof of that. But building a successful partner program is something that takes a great deal of investment in time and money. And although NetSuite has been in the partner business for some time already, I think they’ll have to execute very well to make in-roads here. It’s a conservative market and it’s summer. In a recession.
As the Zen master says in an old joke, “We’ll see.”
