INDUSTRY INSIDER

The On-Demand WizKids

Six to eight weeks. That’s about what it seems to take to get an on-demand solution up and running these days. This information comes from an analysis of nine on-demand vendors that we surveyed for our annual WizKids report which will be out this week.

What’s good about that time interval is that it is about half of a quarterly reporting period, which means that you can make a purchase decision and begin showing ROI (if you have a little luck) in the same quarter. That’s not always the case, though. Some very complex systems or big implementations will take longer, but in case after case that I have seen, six to eight weeks is about right.

On the Right Track

If you have read this column for a while you know that every year, as regular as Groundhog Day, we at Beagle Research publish a report that identifies some of the most interesting and impressive emerging software companies in the front office market. We call them “WizKids” and present an award to each of them, and what makes this report different is that this report focuses on case studies.

Every year in the fourth quarter, we invite emerging companies to brag about their success, we select the most interesting and then we talk to their customers to validate the claims. It’s hardly scientific, but it does provide a qualitative assessment of where the market leaders are taking us. Past winners include Eloqua, BlueRoads, and Rearden Commerce, among others. While it would not be fair to take any credit for their success, it is worth noting that most prior WizKids have gone on to do great things.

Since we take a random snapshot of the market we never know what we’ll get for submissions — it’s a real “Forrest Gump” moment. Here are some other things we discovered from the group.

  • Nearly all of them are on-demand plays. It’s hard to find companies that can afford to build out their solutions in the conventional way anymore and it’s also hard to find investors with that kind of patience these days.
  • About a third of the solutions profiled have something to do with providing integration services for other on-demand applications (Above All, Cast Iron Systems, Apex from Salesforce.com). I think this signals the coming mainstream embrace of federated applications. Best of breed should be with us for awhile as new solutions are integrated with legacy systems to provide end-to-end processing.
  • Several applications take the mash-up to new heights. Two of the companies profiled (Sapias and Echopass) integrate cellular, GPS and conventional — albeit on-demand — database applications to deliver surprising new solutions.
  • Also, many of these winners have solutions that don’t fit nicely into the CRM stovepipe map; instead, they extend the CRM definition to points well before and after where conventional wisdom says CRM starts and ends. Centive for compensation management and Pragmatech for sales knowledge management are cases in point.

Few of these companies are alone in their respective niches, and other fine companies offering different twists on the same basic idea may be out there, too. It’s not our intent to say that those other companies are not viable, this is simply our analysis of companies to pay attention to.

WizKids are also notable for what they are not bringing to market. For example, we have already discussed integration a lot but what we don’t see is any real movement to amalgamate multiple best of breed solutions into extended business process solutions. It’s one thing to say you can connect Point A with Point B, but the technology makes it possible to run the gamut to Z and beyond. It appears to me that, in future years, we will see more companies that string together more elements in more elaborate processes.

More Options

It seems there is no shortage of awards of this type, and other analysts with different approaches will come up with very different lists. This is certainly a different environment than the one we had just a few years ago. Back then, there were many different flavors of the same basic solution; instead of that, today we see lots of solutions that in some cases sound quirky but that deliver incredible value to their buyers.

There’s no doubt in my mind that one reason for so many new application types resides in part in the lower cost of entry that many innovators find in the on-demand space. Also, with the big application areas in CRM already taken, innovators have to search for new niches in the cracks between the larger systems. The result has been many point solutions that might make acquisition candidates.

Alternatively, we could see a new burst of creativity as these independent companies look to find new ways to both partner and maintain their independence. It think that’s possible, but time will tell.


Denis Pombriant runs 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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