Analyst Season

This is an interesting time of year for me, mostly because there’s so much to watch. I call it “analyst season,” not so much because of anything I do, but because the big guys tend to publish a lot of new reports documenting their view of the pecking order. Like everyone else, I will be publishing some new research this month as well, though I won’t be ranking vendors this time.

In addition to the publication of new analyst reports, there is a rush of user group meetings and trade shows to attend between now and turkey day, as everyone tries to generate leads that will close before year end. Generally, there is a lot of good information — perhaps too much. The analysts tell us about how things are in their reports, and the vendors bring out new releases and announce plans for future deployments. If you don’t like what you see, just wait a minute and someone will have something new for you to consider.

Changing Landscape

This year is different in some ways, at least here in the CRM universe. We are in the middle of several trends that are worth noting and which could confound us. The economy is cooling, according to some of the numbers that have been released over the summer. The housing and finance sectors are not doing well and threaten to bring other parts of the economy down, but there’s always a sector or two that are out of phase, it seems. Might the cooling economy keep buyers at bay?

The other trend, which is closer to home, is the migration of customer relationship management from what is generally inferred to be its 1.0 status into its 2.0 incarnation. We have been talking about or alluding to this migration with increasing emphasis for a couple of years now, and lately it seems that more and more companies are hanging the moniker around their necks.

These companies are bringing to market increasingly interesting products, too. Frequently, we see new vendors with highly specialized solutions for business activities that may not be universal. For example, contract management and territory planning might be applications that only a few people in an organization need access to, and their availability as on-demand solutions make them potentially profitable where they would not have been a decade ago.

I think this is where we might see some difficulty as the analysts make their pronouncements. There is a logical tendency and need to view CRM as a homogeneous market, but that market has increasingly fragmented over the last year. I think we are at a point where it might be difficult to fit everyone under the same umbrella without a lot of footnotes.

Idea Expansion

There was a time when we divided the market into small, medium and large for the sizes of the companies that were making the purchases. In truth, that was never a hard and fast rule, and the size designation often simply referred to the size of the wallet each company had for making a CRM purchase. I distinctly recall looking at the Siebel customer base and seeing some rather small companies that had bought Siebel because they wanted what they perceived as the best solution, and cost was not a concern.

If I were to draw lines in today’s market, I might still go with the S, M, L designation but there would have to be caveats — and not for wallet size, either. The emergence of on-demand solutions over the last 10 years has made cost much less of a concern than it was in the heyday of client-server.

Some of the differences I see today have more to do with core vs. expanded CRM and suites vs. point solutions. As the CRM idea has expanded, so have the applications designed to support the need. Where there was once just SFA (salesforce automation) to help salespeople, today we have content management, sales intelligence, lead nurturing, analytics, and more; the list is getting large. More importantly, you can easily imagine different scenarios in which a company might need one kind of solution but not another — this but not that.

So, this gets me back to analyst season. If the analysts continue to try to put everyone on the same copyrighted framework, it might be a hard sell. They really need to make a distinction between CRM 1.0 and CRM 2.0. Otherwise, when it comes to evaluating a company’s strategy, vision and direction — as analysts like to do — they could find themselves playing with apples and non-apples. Could a company squarely in the CRM 1.0 camp still be evaluated as a leader or visionary? If so, what does that say about an analyst’s view of CRM 2.0 and its future?

Similarly, how does a point solution that scores well compare to a suite that scores well? We need guidance here. That’s what the reports should be all about, and that’s why I will be reading them with great interest.

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].

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