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Platform Logic

By Denis Pombriant
May 1, 2018 10:09 AM PT
software vendors should choose a platform and market to its ecosystem

For some time, it has been my impression that in the CRM market, all -- or at least most -- of the good ideas have been taken. It's been a long time since we've seen a new systemic approach to front-office business. It's even been a long time since we've seen a major innovation at the department level.

CRM itself was a systemic innovation in the last decade of the last century. Cloud-based CRM was the innovation of the new millennium, and marketing automation would count as a departmental innovation. It's also reasonable to look at analytics as a systemic innovation, because although it straddles departments, it has become a department itself.

This is not a bad thing -- just the opposite. As CRM has been built out, it has opened new market niches that have maximized the number of solutions. More importantly, it has made all of them affordable to just about any business. Cloud computing is the commoditization of IT. It has made information processing both simple for a lay person to use and so affordable that all those who want it can have it.

CRM is far from done as an approach to business and as an economic driver, but we must acknowledge we're at a turning point. Behind the scenes, the major vendors -- including Salesforce, Oracle and Microsoft -- have gone a long way toward consolidating the industry by platform, and from here that will be the dividing line.

Pick a Platform

So far this spring I've attended two conferences that illustrate my point: SuiteWorld and Financial Force's analyst day. Each company has financials and enterprise resource planning solutions that address the needs of small and medium -- and in some cases, larger -- businesses.

Each is deployed on a specific platform. NetSuite is on its own, which is moving aggressively toward the Oracle Cloud Infrastructure. Salesforce's solution encompasses development platform and infrastructure.

While it's quite possible that many customers will continue using hybrid solutions such as NetSuite for back-office operations and Salesforce in the front office, it's already easy to see that situation morphing.

Oracle for many years has used the logic of running a suite of related software over an integrated solution made up of best-of-breed apps. It has continued this logical progression with NetSuite, both on its own and as a member of the Oracle family.

Salesforce has adopted a derivative of this logic too. While Salesforce is, and likely always will be a front-office company, its powerful platform and AppExchange give partners the ability to build completely compatible applications that help customers achieve suite status. After all, that's the logic of having a platform in the first place.

A platform supplies a consistent set of programming tools, interfaces, objects, data structures and more -- standards -- so that apps built on it can interoperate. It's the same logic as building a hardware bus so that manufacturers can build to common standards. It's popular because it works.

So, the play as I see it for any software companies not named Oracle or Salesforce, or a small group of others, is to pick a platform, become intimately involved with it, and pursue the surrounding ecosystem as your market.

Some vendors have begun working with two or more platforms. That's fine if they have the resources, but I see that as a short-term gambit designed to identify which platform vendor is the best partner.

All of this is vitally important. As I mentioned last time, the meme making the rounds is that it's easier to start than to grow a company, especially in tech. I can see this, and deciding on a platform and an ecosystem to work in is one of those things that can help reduce overhead and enable a business to improve its focus on the things that really matter for growth -- like markets and customers.

My Two Bits

CRM has been a wild ride for two decades, and the ride continues. At this stage it's important not to get sucked in to the latest discussions of digital disruption, IoT, analytics or anything else that looks bright and shiny.

They're all important as secondary considerations, but I think the most important thing to concentrate on -- and in some ways the least glamorous -- is what vendor and which platform you want to work with over the next decade and beyond.

Markets converge. Fifteen years ago, few vendors had complete CRM suites, and now they all do. Today we're looking at far more complex and sophisticated front-office applications as vendors take on vertical market apps.

These apps combine back-office data, front-office processes, intelligence and machine learning, and highly specialized subsystems for everything from manufacturing to healthcare. In this new environment, who has time for platform incompatibilities?

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.


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