A Red-Letter Week for CRM

Last week was busy in a good way, and also in ways that we have not seen in a while — and at least some of that busy-ness showed promise for the economy and our industry. In no particular order, Cloud9 Analytics announced it closed its C round financing, SAP held its user meeting in Orlando, Sage held its partner meeting in Denver, and Microsoft sued Salesforce.

You might think that last bit didn’t fit with the rest of the list, and aside from the fact it happened last week, it doesn’t. But it struck me that the two companies are getting into each other’s faces over a market that has significant upside. Regardless of its merits, this suit suggests to me that Microsoft, at least, thinks important issues need to be decided before the market really heats up. The way suits move through courts, it’s unlikely we’ll see a result soon, but to be fought over like this — it makes you feel like the prettiest girl at the ball, doesn’t it?

VCs Wake Up

Perhaps the most interesting item in CRM, for me at least, is that Cloud9 raised US$8 million. Cloud9 is certainly worthy of investment, but the announcement says more about the state of the venture community that had been almost sleeping in the last year. According to the National Venture Capital Association (NVCA), 2009 was the worst year for venture funding since 1997, with less than $18 billion invested and just over $15 billion raised.

Last quarter, biotech led software in investment dollars, a trend that has been developing for some time. That high-tech is not leading the venture parade should be a concern, and the trend bears watching.I know what you are thinking: You can still do a lot with $18 billion, but it pales in comparison with the $100 billion invested in 2000 or the $20 billion to $30 billion more typically invested each year in the last decade.

The Cloud9 investment is a silver lining for the industry, but the rainbow is still not shining. Keep in mind that this represents a C round, which means the investors are looking to a liquidity event in the relatively near term. That’s completely different from the longer-range expectations held in a typical A round. Nonetheless, it’s good to see money being put to work and the optimism that it implies.

Who Doesn’t Love Collaboration?

Also on the optimism scale, Sage and SAP convened meetings with their users. Sage is continuing to evolve itself, and as Doug Meyer, chief customer officer, told me — and CEO Sue Swenson said in her keynote — the company is going all-out to make itself easy and fun to work with. Customer experience is a top priority, as is product evolution, and Sage showed it is serious about the on-demand market by launching a version of SalesLogix that will be delivered from the cloud. All indications are that the partner community is receiving the offering well, and general availability is scheduled for later this year.

Although I didn’t go to Orlando (because I was in Denver), from the emissions at Sapphire, it seems like the ERP world has discovered the importance of crowdsourcing and the wisdom of crowds and their eponymous books. The tweet-storm coming from Orlando can be summarized in CoCEO Bill McDermott’s keynote sound bite: “SAP embraces People, By Design.” Promising greater collaboration with its customers as well as the tools to enable SAP customers to more effectively engage in collaborative business processes with end customers, SAP unveiled new products and new attitudes. Since I was not there, it’s best to get the skinny from those who were, including Sameer Patel, Vinnie Mirchandini and Dennis Howlett, to name a few.

The collaboration thing has me more than intrigued. I can’t find a soul who cares to object to the idea, and that tells me that CRM and our focus on all things social over the last few years is having an impact that goes well beyond front office borders. You might call it the triumph of CRM. It became readily apparent last week, and, the economy not withstanding, that may be the biggest news coming out of one of the best weeks in CRM we have had in a while.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].

1 Comment

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