Oracle Beefs Up Its “Service Cloud”
Oracle announced it has entered into an agreement to purchase InQuira today. InQuira is a privately held company that supplies knowledge management technology to support web self-service and agent assisted self-service.
On the face of it, this seems to emulate solutions provided by RightNow and Salesforce.com and several other vendors in the customer service space. So while this is a good thing for Oracle and its customers, it is not revolutionary. It means that at least in this area of customer service Oracle has filled an opening.
The announcement did not disclose the purchase price or any other terms.
Thought Leader Interview Larry Ritter
Over on the Website we just posted a thought leader interview with Larry Ritter the SVP in charge of CRM products at Sage. Worth reading if you want a better idea of what makes Sage tick.
The New, New Bubble
The cover story in the current issue of FORTUNE deserves consideration. Normally I would include a link but the magazine appears to still be into selling ink on squashed tree. Steal a copy from your dentist’s office.
Mark Zuckerberg is on the cover bursting a bubblegum wad in one of those slomo pics they used to take at MIT (maybe they still do). At any rate the article is about the presumed tech bubble, the number of IPOs out in the Valley, the price of real estate in Palo Alto and exotic cars. Seems the Tesla dealer in PA is selling the all-electric coups like lemonade on a street corner in NYC last week. Tell me no one is aware of Peak Oil now!
What’s interesting to me is the relatively low VC input over the last several years compared to the $100 billion infused at the turn of the millennium. Last year, according to the article, about $23 billion entered the coffers of emerging companies, a far cry from 2000 but much better than the low point of 2008-09 when the numbers got into the teens and bottomed out at 1997 levels.
If you study this stuff you can’t do better than the data put out by the NVCA or National Venture Capital Association in its quarterly and annual reports. What’s interesting to me is that, minus the years of the recession that nearly unhinged the global financial system, VC investments had been trending in the $20 billion to $30 billion range.
Now that’s a nice range to be sure but the last few years have been in the low average range, so how is it having such a pronounced effect?
Glad you asked.
I’d say that a bunch of the effect comes from cloud computing. Not the cloud computing that exports your computer room to some country with permafrost that can cool its operation by opening a window. I mean the cloud computing that puts a truck load of technology in the hands of entrepreneurs for a song AND the cloud computing that enables them to sell or, excuse me, “monetize” their creations for pennies across the cloud. That cloud computing.
This is where I take a shameless plug and say that back in 2004 I suggested, in a white paper, The New Garage, that this would actually happen. The cost of starting up would go way down largely because companies wouldn’t need to buy all of the means of production. I figured they’d still spend heavily on sales and marketing but that was before those activities became so socialized. The result is a marketplace in which it costs very little comparatively to make new products and to get them to market.
All that’s well and good but it also brings into focus another not so wonderful idea, bubbles. Zuckerberg is on the cover with his wad of Bazooka as a sort of morality tale in the making. Are we headed for another tech bubble? I think so, if only because the wize guys in the article tell us, nah, not again.
Good luck with that.
Why the World Needs Social CRM
On Sunday, July 10, Time Magazine posted a book review of sorts by Rana Foroohar. “Driven off the Road by M.B.A.s” is really a riff on Bob Lutz’s new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business. Lutz should know something about his topic since he spent a forty-seven year career in the halls of power at Ford, BMW, Chrysler and GM.
Lutz’s argument is not new, and I should say here that I haven’t read the book. But I did read David Halberstam’s magisterial book in the 1980s, The Reckoning, which makes the same argument. In many ways, Lutz is Halberstam redux.
The argument of each book can be reduced to this: engineers build cars (or any other product) with the customer in mind. They don’t worry about price and cost and they persist in the belief that as Emerson said a long time ago, if you build a better mouse trap, the world will beat a path to your door. It’s pure Americana.
Lutz, Halberstam and loads of others aver that the MBA grads focus on the balance sheet with the customer as an afterthought. Lutz has his share of myopic management-by-balance-sheet examples, which you can find in the review and also in the book to make the point.
The review dutifully summarizes how we got into this position, citing the rise of World War Two Wiz Kids, led by Robert McNamara, who made that war more efficient — whatever that means — before moving on to Ford and the Defense Department under Kennedy and Johnson. In each successive endeavor the Wiz Kids were less successful as the penultimate posting at DOD and Vietnam amply demonstrate.
The article takes an interesting turn riffing again off a line Lutz puts forward in his book: “Shoemakers should be run by shoe guys, and software firms by software guys.” This is the whole rationale for CRM and the preceding paragraph in the article is worth quoting in full:
“It’s interesting to note that the one area of the U.S. economy that’s adding jobs and increasing productivity and wealth is also the one that is the most relentlessly product- and consumer-focused: Silicon Valley. The company off Highway 101 that best illustrates this point is, of course, Apple. The only time Apple ever lost the plot was when it put the M.B.A.s in charge. As long as college dropout Steve Jobs is in the driver’s seat, customers (and shareholders) are happy.
I might add that I know a lot of Harvard and other top school MBAs in the Valley too. So it’s not simply having the degree, there’s something about the culture as well. However, the point is that the list of dropout billionaires who became wildly successful by asking simple questions like “What does the customer want?” is long and still growing. Let me add Bill Gates and Mark Zuckerberg.
Back to the rationale for CRM. We who are deeply involved in CRM may occasionally take it for granted that the world thinks like us but if Lutz and his acolytes are to be taken seriously, we must be mistaken in our belief. Now and then when trying to distill CRM and especially social CRM — which I think have become one — I am perplexed because I think some of what we say and do should be common sense. We should have learned at home or in grade school about how to treat other people, how to empathize and understand their needs.
Social media changed much about CRM because in its earliest incarnations even CRM had a few nervous moments. Recall that when it was first introduced CRM was largely a tool for capturing data so that managers (many with MBA’s) could apply their balance sheet logic in an effort to deal with customers — or perhaps markets.
The social revolution started with customers not vendors and the empowered customer finally got the leverage needed to deal with the Wiz Kids on something like an equal footing. It may seem strange to those of us who are on the front lines of CRM that the rest of the world might not think like us, but we all have a lot of work left to do.
Lutz may be right in his assessment that software firms should be run by software guys, and by extension car guys should run car companies. But the real context, I think is cultural. Lutz and Halberstam have documented a culture shift in business and one that has a long trajectory. Social CRM is an attempt to rectify some parts of that shift but I doubt we’ll ever go back to the way things were. With modern technology and perhaps the enlightenment that comes from being proven wrong, perhaps we can fashion a new culture that is both financially responsible and customer centric.
Curation and the Next Shiny Object
We tend to think of social media as a property of CRM, and it is, but the story hardly stops there. Social media is changing the world beyond CRM too and that’s what makes it valuable. If being social was strictly about commerce it might not be worth writing about.
This week’s Economist has a cover story and special section on social media and its impact on the news business. The article’s contention is that technology has ironically taken us back to a time before there was much technology in the news business at all — the eighteenth century coffee house more or less. I think there are some parallels with CRM too.
The point for good and bad is that the coffeehouse era represents a time when citizens were the journalists and objectivity was an odd term. Everyone had a point of view and few were reticent about expressing theirs. According to the article objectivity was a necessary expedient that developed in the nineteenth century as a way for papers to appeal to larger audiences. By stringently trying not to offend anyone (through objectivity), a paper could assure itself of the largest audience possible and with that maximize revenues.
So, journalists did their best to provide balanced reporting and papers were rewarded with ad revenues and near monopolies in their markets. Now all that seems to be coming undone. The Internet has enabled anyone to be a citizen reporter and not just in print but in audio and video as well. More importantly, much of the lucrative ad revenue that papers had depended on has largely decamped for the Web. In other words, the newspaper business model fell apart which is typical of a disruptive innovation like the Internet.
None of this is new but one of the greatest sources of consternation in the social world is the vast quantity of information (data, really) that social media generates. For news people the challenges are sifting out the truth then aggregating information in ways that make sense. These are the same challenges faced by a modern front office team intent on developing value from all the miscellaneous data streams.
We take very different approaches to finding truth though. In the front office we’re more automated because in many cases the truth of any situation is a mathematical quantity and the ideas that get the most votes, or their rational equivalents, win. That’s not so true in the news biz. There truth is truth regardless of what any group might wish it to be.
Whether its news or customer facing business, we might use the same or similar tools to sift the load. One area where there is commonality is in the need for editors in news and curators in social media circles. In either case someone has to be ultimately responsible for making sense of the stream of information and presenting it. Ironically, editing is something that the Web and citizen journalists pushed to the side but lately it has seen elevated importance. I think curation is on the same upswing.
We’re not that far along in social media but curation is making a bid for importance and there are some tools on the market that begin to make the process approachable. Three tools mentioned in the article, Storify, Keepstream and Storyful aim to help curators to bring together information from the variety of streams, video and photo sources and blogs available today.
Rather than laboriously and manually checking the various social sites a reader can begin to expect someone will collate topical material and make it available. For instance, rather than rely on a customer to sort through hash tags and other markers on Twitter and other sites, a vendor-curator might take on the job of putting it all together into a coherent story using curation software.
I just went to the Sage Summit user meeting and curation technology could be very useful in such a situation. A logical use of Storify, Keepstream or Storyful might be to collect everything told through Twitter, Facebook, YouTube and other social sites, mix in some video of the keynotes and other things and present them through the company blog.
Curated information might not be as objective as a twentieth century newspaper but it doesn’t have to be. In this new coffeehouse era transparency is the new objectivity according to the Economist article. It’s natural that we all have biases and anyone should know that a company has a bias about presenting itself in its most favorable light. That said, your curated stream about your user group meeting, conference or sales meeting has to be understood for what it is. It won’t be the last word on the subject but it will stand as your company’s position on its truth.
This approach might have a big future in conventional marketing if users and community members are allowed to contribute content. Currently, a customer can have a say through blogs and social media but nothing save a search engine can bring it all together — and then there’s still the issue of volume.
Perhaps serendipitously CMO.com ran an interesting and for our purposes related story last week under the headline, “Dell CMO: Social Media No Longer ‘The Next Shiny Object’”.
Karen Quintos, CMO of Dell, speaking in New York City presented the results of a study by Forrester Research that it commissioned titled, “Listening and Engaging in the Digital Marketing Age.” According to the article, Quintos said, “That sweet spot in social media. . .is in the integration of social media into the aspects of product development, customer support, engagement–the integration of customer targeting with really great content, linked with really great analytics.”
None of this should surprise you but it raises the question of what’s next. Now that we have social media to surface data and analytics to turn it into information the next logical step is curation. Organizing the information to do useful work. To me it also marks an interface between eras of sorts. Social media had its hay day in a down economy when companies were desperate to develop customer intimacy. The recovery may be sputtering but organized curation suggests to me that we’re beginning to play offense again.
