The Year in the Rear View

Ever notice how these year end reviews and a pundit’s previous forward-looking prognostications rarely synch up? Of course not! Analysts and pundits are great at predicting the future, but lousy at coming back a year later to review how they did. Well, I’m different. I don’t care if I was wrong last year as long as I was funny. Here are a few of my prognostications from 2004 and how they look today.

Oracle will try to buy China. Yes, I said it and I’m darn proud of it. They came up short, of course, but they gave it a good try by gobbling up Peoplesoft and coming to terms with Siebel. But now it appears that Oracle has a lot of redundant applications that it needs to knit together or at least continue to support through end of life. Might some of the Oracle shareholders get a little testy in 2006 about all this over buying? Hmmm.

Government regulation of spyware and other dangerous software makes Internet more safe, secure, and convenient for users. As they say in Brooklyn, forgetaboutit. There was a bill winding its way through congress that was so watered down, it was drawing camels everywhere it went. As I documented previously, there’s well over US$100 million in venture funding in some of the largest companies that make spyware. Don’t expect this administration to take any action against this “new industry.”

Customer loyalty (aka retention) replaces customer satisfaction as the primary driver in vendors’ mindsets. And ROI as an indicator of software implementation success will be de-emphasized as vendors focus on growth instead of cost avoidance.

Wow! I said that?! I might have been a little early but these are pretty good if I do say so. Unbeknown to me at the time, Peppers and Rogers had a book incubating which was published in May. The title, you might recall, is Return on Customer and it’s all about ROC replacing ROI as the indicator of success. It also makes a convincing case for installing loyalty and retention, instead of mere satisfaction, in the holy grail position in the board room. Who would have thunk it?

The voice of the customer gets louder. Of course if you want to drive loyalty and all the rest, you need to find better ways of asking customers what they want. This idea made cover stories in magazines like Forbes and BusinessWeek so I am counting this as another prediction fulfilled.

More established software vendors bite the bullet and begin to offer hosted solutions. Lots of stuff happening in this direction., RightNow, NetSuite, even Siebel and many others are laughing all the way to the bank. SAP intimated they were going to do something and Microsoft is still pooh poohing the idea so it must be timely. Hurry up or is going to eat your lunch.

Continued growth and diversification in hosted CRM. You only need to look as far as’s burgeoning partner ecosystem to know this is true. Add to that SFDC’s introduction of Appforce and ApplicationExchange and you have all the makings of a major disruptive innovation in enterprise software. Fasten your seatbelts in ’06.

Wireless technologies continue improving and take CRM off the desktop and to the customer. OK, not a homerun but lots of base hits being made here. Steady growth is good. Also watch for the rise of the IP all-in-one service for phone, Internet, call center services and much more from companies like Five9.

A better market for venture capital and more emerging companies. Nope, this dog didn’t hunt well at all. There was an article in the business section of the Boston Globe (my home town paper) the other day that said enterprises didn’t want to buy from startups right now and VC’s were putting more of their money into late stage companies for quicker and more assured returns. Fair enough. That’s the behavior you see at the end of a cycle or the very beginning of a new one. There just aren’t a lot of places where you can park a few million bucks right now, but that’s changing. All you need to do is look at SFDC’s partner ecosystem to see there’s a lot of innovation happening. The thing is, though, that as long as these guys can sell through ApplicationExchange the need for VC money to build a sales and marketing infrastructure is greatly reduced. There are some assumptions here that can’t be proven yet, but it is certainly possible that we are returning to a time when startups can be self funding.

There, that’s it for now. Let’s do this again in about a year. I’ll have some new prognostications for ’06 next time.

Denis Pombriant is a well known thought leader in CRM and the founder and managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s latest white paper, Adding Sales to the Call Center Agenda, summarizes his recent research in the call center industry. In 2003, CRM Magazine named Pombriant one of the most influential executives in the CRM industry. Pombriant is currently working on a book to be published next year. He can be reached at [email protected]

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