CRM Evolution Notes
Aug 28, 2013 5:00 AM PT
One of the more interesting aspects of CRM Evolution, which was held in New York last week, is how many emerging companies attended and appear to be doing well. The big guys were there too -- either with booths or through attendance by senior people. You can get a false sense of the marketplace if you only attend Salesforce.com's Dreamforce, Microsoft Convergence, SAP Sapphire, or Oracle OpenWorld.
Though they are all excellent, at those shows a single vendor dominates and ecosystem partners give the impression that the market is all sewn up by the primary vendor. These big vendors are, indeed, doing many things right, but the market continues to reward smaller vendors who are doing good things in innovative ways.
Three such vendors -- SugarCRM, Five9, and Vertical Solutions -- caught my eye in New York, in part because they briefed me, but more importantly because they can demonstrate momentum.
Sugar managed to coincide a major new funding announcement with the event. On Wednesday, it let fly an announcement of a new round of funding worth US$40 million, led by Goldman Sachs. The size of the investment plus the identity of the investor were both notable in a market where multibillion dollar CRM companies seem to have their pick of customers.
Sugar has been surprising many people over the last four years, however. Since CEO Larry Augustin came in, the company has boasted 15 quarters of, usually, double-digit growth. Last year, Sugar signed up one of the most coveted customers and partners -- IBM -- for an implementation worth tens of thousands of seats. At the same time Sugar joined IBM's Global Alliance Partner Program.
As the company was announcing its funding in Cupertino and showing off in New York, it was in the process of going live with a tranche of new user seats at Big Blue -- it's spun up nearly 70,000 seats as of Q3 2013. Sugar has turned a corner, moving from selling fewer-than-100-seat deals to increasingly going after and winning larger deals with major corporations in North America, Europe and South America.
The company's success is at least in part explained by the platform's robust application development tools and API set, according to Augustin. Many companies are turning to CRM today to be the base application for building apps that run on multiple platforms and in one way or another face customers -- whether or not that means participating in sales, marketing and service. In this, Sugar has plenty of competition from Salesforce, Microsoft, Oracle and just about any other name your can mention -- but it also has momentum.
Five9 on Fire
Five9 is another example of a cloud company that has been in the market for more than a decade and is now catching fire. Five9, which touts more than 1,800 clients, has staffed up recently with some of the brightest minds in the business, according to Liz Osborn, vice president of product and solution marketing.
Led by CEO Mike Burkland, the company is now a small directory of people who have been successful in the telco as well as customer experience space.
They are now lending their expertise to this SaaS-based contact center provider to help deliver some cutting-edge functionality -- such as a new mobile supervisor app for the iPad that allows call center managers to monitor and manage staff from any location.
The company also has some strategic CRM integrations for Oracle RightNow as well as Salesforce, having just announced more than 150 joint clients. It will be interesting to see what this cloud contact center software provider does next.
Also in the call center, Vertical Solutions Vice Presidents Ronnie Wegmann and Kim Brault attended CRMe. Vertical Solutions has reached critical mass in several markets, most notably in healthcare.
With the new healthcare law taking effect in January 2014, many hospitals, practitioners and insurance companies are ramping up to provide the efficient customer or patient service that providers will need to implement new approaches.
VSI's solutions are positioned to support the convergence of device support and care services. In addition, patient-centered care models and readmission penalties will drive the need for healthcare services innovation. Customer experience technologies including CRM, cloud, social, workflow and mobility will be core requirements to drive new revenue models, effectively comply with healthcare regulatory changes, and minimize costs/risk.
VSI will be making several announcements later this year regarding innovative partnerships and market strategies, Ronnie Wegmann told me. Meanwhile, the company continues to add customers at a good clip.
Also worthy of mention is SAP. The company has been working hard over the last two years to bring to market an iPad sales application. I've seen it, and it is beautiful. It incorporates powerful visuals and an intuitive design along with powerful analytics.
I think SAP will go far with this and some other advances in its product line. My one critical observation, though, is that the sales tool seems more focused on selling to a large company's installed base than on developing new business. As a practical matter, though, this has become an important aspect of life in large corporations, so you can't fault SAP for taking that position. However, this is still evolving, so watch this space.
Lastly, there are a lot of CRM shows or parts of shows dedicated to CRM, and people can't attend all of them. Still, I wonder why this show in particular is not better attended. This year, I heard a combination of issues -- like August in general, and summer vacation, as well as back-to-school issues and show promotion.
If they held this show between Thanksgiving and year-end, the result would be similar. However, this industry deserves a more robust event, and while shows like Dreamforce are hugely successful, they are single-vendor oriented.
The same is true in a different way, of the proliferation of analyst shows. The role and usefulness of the independent show should not be underestimated, and I hope the magazine does a few things to build it up.