Salesforce Growth Waning, Microsoft Coming on Strong in SaaS

kokomomammothSoftware and s/w Development

Feb 17, 2014 (4 years and 4 months ago)

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Salesforce Growth Waning, Microsoft Coming on Strong in
Saa
S

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

REPORT

October 3, 2012

Companies
:
CRM, ELOQ, IBM, MSFT, MSTR, ORCL, SAP
, WDAY

1

Reverdy Johnson
,
rj@blueshiftideas.com
, 415.
677
.5801

Guido Gualandi, gg@blueshiftideas.com







Summary

of

Findings

 Nine of 17 sources said Salesforce.com Inc.
(CRM) will see its
growth slow in the coming year. Despite being top of its class,
Salesforce is susceptible to competitors’ improved offerings,
can become too expensive in terms of upgrades and add-ons,
and has poor customer service.
 Microsoft Corp.
(MSFT) is emerging as a threat to disrupt the
SaaS
industry. It offers easy integration with Outlook and
Office, use within the cloud or on-premise, and available
partnerships. One source said Microsoft’s
xRM CRM
solution
will revolutionize relationship management, while another
questioned why Microsoft has not promoted it more.
 Oracle Corp. (ORCL), SAP AG (SAP) and IBM Corp.
(IBM) have
made important strides and offer mastery of the whole chain,
providing current clients easier migration from legacy systems
to the cloud.
 Security questions continue to dog SaaS adoption; companies
like banks are hesitant to put critical functions in the cloud. As
a result, private clouds are gaining popularity because they
offer the cloud’s flexibility but the safety of having data on-
premise.
 SaaS growth also is being limited by the lack of quality service
and the complex functions needed to meet the demand of
business intelligence
(BI).
 Social CRM for Salesforce and Oracle, initially at least, is about
creating buzz, being seen as cutting-edge, and internalizing
the advances made by small app developers. Sales and profits
will take some time to catch up.





Demand

for

SaaS

Salesforce
.com

G
rowth

Microsoft

G
rowth

SaaS

T
ools

Users




Integrators




Industry

Specialists




Silo Summaries

1)
SAA
S

TOOLS USERS

Four of six sources said demand for the SaaS is growing.
One source chose Microsoft’s cloud CRM solution over
Salesforce and Oracle because of the integration
advantage with Office and Outlook, as well as its cost and
flexibility to allow for

partnerships and on
-
premise delivery.

Salesforce was too expensive with add-on applications and
upgrades and lacking in support.
A second
source stopped
using Salesforce for security reasons, choosing instead to
move to a private cloud
. The third source was disappointed
in Salesforce’s product and service. One source said
Salesforce is the entrenched leader and CRM of choice.
The remaining two sources, both representing European
financial institutions, are not interested in SaaS software
and prefer on-premise custom software
.


2)
INTEGRATORS

Four of six sources said demand for SaaS solutions is
increasing, especially in CRM and HR. Microsoft’s xRM
platform is having a transformational effect on relationship
management. The smaller players are left to create niche
specialties.
One source reported considerable industry
consolidation as larger firms place a greater emphasis on
SaaS solutions.

One source said Salesforce is bidding on
all projects but winning few, while another questioned
whether Salesforce can m
aintain its lead over fast
-
changing competitors like Oracle and SAP.
Yet another
source said SaaS is likely safer than on-premise solutions
and that fears of security problems are overblown. One said
SaaS in BI is slow to pick up. The final source said demand
for SaaS in Europe lags far behind the United States
because of the economy and cultural differences.

3)
INDUSTRY SPECIALISTS

These five sources said demand for SaaS is growing, and
identified Salesforce, Oracle, IBM, SAP and Microsoft as the
most dominant companies with little challenge from any
up-and-comers. One source said Microsoft offers the most
intriguing product and innovative technology but is not
winning more deals because of lackluster promotion.
Another source said Microsoft is ready for s
ignificant
growth in the next year because of its ease of integration
with Office and Outlook; he also predicts slowing growth for
Salesforce
. Two other sources said Salesforce was
struggling with demand and would have to innovate to stay
on top. Two believe Oracle and IBM present the best
options because they offer hardware, middleware and
software. Companies hesitant to use SaaS for BI functions
instead opt for on-premise or private cloud solutions.

Research Question:

Which is the best
SaaS

tool in today’s growing market for CRM?



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

2

Background

Blueshift Research has written five reports on big data. Sources for our March 1 report on SAP said the company’s HANA

(High-Performance Analytic Appliance) was performing well in pilots and threatening Oracle’s
Exadata
in the short run,
eliminating the need for Oracle databases and lessening the long-term importance of servers. Our
April 3 report
on big data
management and analysis tools found a fragmented market full of many options and varying data and storage needs at the
enterprise level. Sources praised HANA’s platform with its positive proofs of concept and said it had the ability to take share
from Oracle, especially among customers using both Oracle and SAP products. Our
May 8 report
found that adoption of SAP’s
HANA and Oracle’s
Exalytics in-memory machine
was slow and that the market was focused on hybrid database solutions.
Sources for our
June 21 report said Informatica Corp.’s
(INFA) growth prospects were in its new products, but these may not
be enough to drive the company forward. Its core
ETL
tool market has peaked, its social data tools are immature, questions
surround the effectiveness of its sales team, and open-source solutions are a threat. Our
July 28 report
found that demand
for BI remained strong and was expected to grow around 10%, better than other data analytics initiatives in light of difficult
macroeconomic conditions.
MicroStrategy Inc. (MSTR) and Qlik Technologies Inc.
(QLIK) were singled out as well-positioned
leaders in their respective spaces.


CURRENT

RESEARCH

In this next study, Blueshift assessed which company has the best SaaS tools, with a particular focus on the growing CRM
market. We employed our pattern mining approach to establish sources in four independent silos:
1) SaaS tools users (6)
2) Integrators (6)
3) Industry specialists (5)
4) Secondary sources (5)

We interviewed 17 primary sources, including seven repeat sources, and identified five of the most relevant secondary
sources focused on market leaders in CRM, concerns about Salesforce’s solutions, the need to use other vendors for specific
organizational needs, Salesforce’s bet on enterprise social networking, and an example of the benefits of Microsoft’s xRM
CRM tool.


Next

Steps

Blueshift

s

next

report

on

SaaS

will

focus

on

t
he

trend

toward

private

clouds

and

this

development’s

winners

and

losers.

We

will

assess

the

progress

of

Microsoft,

Oracle,

SAP

and

IBM

in

catching

up

to

and

taking

s
hare

from

Salesforce.

We

also

will

analyze

which

companies

are

using

a

social

CRM

solution.

Beyond

SaaS

and

the

cloud,

we

will

revisit

SAP

s

HANA

and

its

rate
of

adoption

compared

with

our

March

1

report
.



Silo
s

1)

SAAS

TOOLS

USERS

Four

of

six

sources

said

demand

for

SaaS

is

growing
,

but

they

differed

in

the

opinions

of

the

superior

SaaS

tool.

One source
chose Microsoft’s cloud CRM solution over Salesfo
rce and Oracle because of the integration advantage with Office and
Outlook, as well as its cost and flexibility to allow for partnerships and on
-
premise delivery. Salesforce was too expensive with
add
-
on applications and upgrades and lacking in support, w
hile Oracle’s sales pitch was ineffective. A second source stopped
using Salesforce for security reasons, choosing instead to move to a private cloud and custom CRM software for better
control of data. The third source was disappointed in Salesforce’s prod
uct and service. One source said Salesforce is the
entrenched leader and CRM of choice, especially among start
-
ups that grew into successful businesses and worked with
Salesforce along the way
.

The

remaining

two

sources,

both

representing
European

financia
l

institutions,

are

not

interested

in

SaaS

software

and

believe

on
-
premise

custom

software

offers

better

data

security
.



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

3


Sales

and

CRM

project

manager

at

a

major

global

manufacturer

Cost, easy integration into existing company systems, and the flexibility to move from total cloud to on-premise operation
prompted this manufacturer to choose Microsoft’s cloud CRM solution as its inaugural CRM system. Salesforce.com was
too expensive, and its customer support was lacking. Oracle was not selected partly because its sales representative was
too busy to prepare a professional pitch.
 “We’ve had Microsoft Dynamics CRM Online
for a little over a year now.
In 2010 our CRM team of executives and others in the company with a
vested interest in CRM went through a pretty rigorous evaluation
process. In the end, we narrowed the choice down to three cloud CRM
solutions: Microsoft, Salesforce.com and
Oracle On Demand
. After that,
we went through a process of demos and scored each vendor.”
 “Microsoft’s cloud CRM stood out because of its native integration with
our other systems, namely Outlook and Office. We’re a big Microsoft
house.”
 “Even though our enterprise resource planning [ERP] system is from
Oracle, we decided against the Oracle cloud CRM because of poor
customer support. And it was just an inferior product.”
 “Cost was another factor in our decision, and was one thing working
against Salesforce.com. Salesforce.com couldn’t provide us with a
cost-effective CRM solution. Everything we needed was either an add-
on or an upgrade, which meant more cost.”
 “An attractive point of the Microsoft systems is that it can either be
totally in the cloud, in a partner’s cloud or on-premise. We liked that
flexibility and are thinking now of moving from total cloud to working
with a partner because Microsoft often fails to communicate changes
and updates to their cloud system, which ends up causing problems for
us. With a partner-hosted cloud solution, the partner will alert us of all updates and back-end work.”
 “The cloud has its limitations and challenges. The cloud’s promise is that you don’t need staff to maintain it, but
that’s not always the case. We had a lot of consultants in to help set up our system, and some are still with us.”
 “Any business that isn’t looking at the social media side of CRM has their head in the sand, but as far as
incorporating social data into CRM, the CRM industry isn’t there yet. How do you make sense out of free-form
communication? There’s really no good method to bring social data into the system and make it usable.”


CIO

for

an

international

research

group
;

repeat

source

Cloud demand is growing, but clients are starting to use private clouds for quality and data control. CRM and HR are
better suited than BI to cloud applications. This company has stopped working with Salesforce for security reasons.
 “Cloud software is growing fast, and offerings are very attractive in terms of total cost of ownership. However, we
have some doubts about a couple of issues.”
 “First is the quality of service. SaaS vendors are growing fast, and as they get more clients and their data
centers get full, we are afraid their service quality might go down. Once we are locked in with their solution, if
there is downtime or data loss, we would not be happy. If we outsource all our CRM, we will also lose our
expertise and it would be difficult to bring that back in-house.”
 “Second, we are worried about our data. If you read our CRM data, you also would know our strategy, weak
points and so forth. A competitor with access to our data would be able to damage our business greatly.”
 “We were using Salesforce for a while and decided to stop using them, and we have a created a private cloud
with a CRM custom software that all our group and ecosystem can use. Salesforce is an excellent product, the
best CRM on the market, but for a large company like ours, it is better that we manage our software ourselves.”
 “All our ecosystem is on it, and we do not have to worry about somebody else’s quality of service or the
possibility that our data get stolen. Cloud service vendors guarantee that it is safe and security is huge; however,
we cannot be sure. What if they weaken their service because they want to save on costs?”
 “Our BI applications are still on-premise as analytical information has a lot of detail, and it needs to get it from
different silos, which is difficult to do in a cloud. We would not externalize BI applications as they are even more
confidential than CRM. Somebody running a BI report would know all about our company.”
 “HR is an area that can be outsourced, though I would not outsource payroll as that is the heart of the system.”
We’ve had Microsoft Dynamics
CRM Online for a little o
ver a
year now
.


Microsoft’s cloud
CRM stood out because of its
native integration with our
other systems, namely Outlook
and Office
. …
Salesforce.com
couldn’t provide us with a cost
-
effective CRM solution.


An
attractive point of the Microsoft
systems i
s that it can either be
totally in the cloud, in a
partner’s cloud or on
-
premise
.

Sales & CRM Project Manager
M
ajor
G
lobal
M
anufacturer



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

4

 “I am all for cloud services like what Google [Inc.
/GOOG] offers for consumers. That will continue to be
successful for all small applications and small companies. Large groups will continue to have either on-premise
software or private cloud.”
 “SaaS can be successful for large groups as a temporary mode in case of mergers and acquisitions; it would
give some time to decide on which platform to merge. It is what happened to us.”


CEO

of

a

software

company

based

in

Europe

This company has not seen much benefit from using Salesforce since its product and customer service are lacking.
Salesforce appears more interested in selling more licenses than providing solutions. The source is considering
MicroStrategy’s CRM solution.
 “When I started to run this company, Salesforce was already there, so I
decided to leave it and not to perturb the sales team. We have
Salesforce’s product for small companies, and we pay €25 a month
per user (instead of €60 for regular licenses) but have not had much in
return.”
 “I have no idea if it is a good tool. It is good for us to run the sales
team, but we have zero customization and zero service. When I try to
call our Salesforce reference, either they don’t respond or they were
only interested in selling more licenses. I was never able to get any
help.”
 “Maybe it is good for bigger companies that purchased the more
expensive product and thus can adapt it to their needs and have a better post-sales service.”
 “I would be interested in looking at MicroStrategy’s CRM product.”


Marketing

director

for

a

long

list

of

successful

technology

start
-
ups

Salesforce.com is entrenched as the CRM vendor of choice. For the past 12 years, it has been the clear economical
choice for technology start-ups with little capital to invest, and now those start-ups are major players in the tech industry.
The source also utilizes add-on applications such as Eloqua Inc. (ELOQ) and Jitterbit
.
 “I’ve used Salesforce.com in every technology company I’ve worked for. For most tech companies, it doesn’t
even occur to them to use anything else than a cloud solution. Salesforce is just easier, more flexible, and a no-
brainer for any start-up.”
 “About 10 years ago, Salesforce.com was the only cloud option, and it has grown just as the start-ups that
launched with it are now multibillion-dollar companies.”
 “Salesforce out of the box is an attractive enough product, but we use multiple add-on applications that we find
on Salesforce’s AppExchange
. To automate our marketing, such as targeted e-mails, we use a product called
Eloqua, and for data loading we have an app called Jitterbit.”
 “The fact that Salesforce requires integrated third-party applications to meet our needs isn’t a drawback to the
product; it’s a plus. We can add on the best of the newest tools without much hassle or cost.”
 “We should probably start looking into social CRM, but the reality is that in most tech companies, and ours,
social media is handled by the staff in the PR department and it’s the marketing and sales staff using
Salesforce. Right now social is siloed from sales but integrating these two is a culture change that will probably
happen down the road.”
 “We’ve had good support from Salesforce.com, and I hope we don’t outgrow it. Nobody wants to put in a new
CRM.”


CIO

with

a

large

European

banking

group
;

repeat

source

This group does not have any SaaS software, choosing instead an on-premise solution. Clients do not want SaaS and
require data to be on-premise.
 “We really have nothing SaaS. Most of our applications are on-premise with SAP; the rest are custom
applications developed by us.”
 “We are mostly concerned with data security and legislation. Our clients, all banks, need to have the data in
their datacenters. I think large banks will not use SaaS unless in a private cloud. We can offer cloud services to
our ecosystem, but it needs to be in our facilities.”
When I try to call our Salesforce
reference, either they don’t
respond or they were only
interested in selling more
li
censes
.

CEO, Software Company
Europe



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

5

 “Some smaller companies and banks might buy SaaS software as they cannot afford their own system, but all
the large groups will not do so.”
 “In our ecosystem, the space for SaaS is limited to very few noncritical areas.”


CIO

with

a

worldwide

bank
;

repeat

source

Concerns regarding security have prompted this source to refrain from purchasing any SaaS software. The bank believes
data would be less at risk if housed internally.
 “We have no SaaS software. We don’t use any cloud service.”
 “Our main applications are either SAP or Oracle or custom. There is no penetration and no possibility for cloud
vendors at the moment.”
 “We are very concerned about our data, our clients’ data and our strategies, so there is no hope of some of that
going on outside vendors.”
 “There could be some SaaS software in the company, of course, if a department is using some minor application
say for HR or some marketing campaign. I would not see that from our central office, but as far as I can see
there is no SaaS.”


2)

INTEGRATORS

Four

of

six

sources

said

demand

for

SaaS

solutions

is

increasing,

especially

in

CRM

and

HR
.

SAP,

Oracle,

Salesforce,

IBM

and

M
icrosoft

all

offer

quali
ty

solutions,

but

no

clear

winner

has

emerged

because

each

excels

in

different

arenas.

Microsoft’s
xRM platform is having a transformational
e
ffect on relationship management.
The

smaller

players

are

left

to

create

niche

specialties
.

One

source

reported

considerable

industry

consolidation

as

larger

firms

place

a

greater

emphasis

on

SaaS

solutions.

Many

companies

have

multiple

vendors

because

solutions

have

been

chosen

based

on

departments,

which

could

lead

to

more

consolidation.

SAP

and

Oracle

are

releasing

new

solutions

on

a

cloud

platform.

One

source

said

Salesforce

is

bidding

on

all

projects

but

winning

few
,

while

another

questioned

whether

Salesforce

can

maintain

its

lead

over

fast
-
chan
ging

competitors

like

Oracle

and

SAP
.

Yet ano
ther source

said

SaaS

is

likely

safer

than

on
-
premise

solutions

and

that

fears

of

security

problems

are

overblown

and

misunderstood.

One

said

SaaS

in

BI

is

slow

to

pick

up

because

the

industry

lacks

a

sufficient

tool

to

analyze

big

data

in

the

cloud.

Anoth
er

reported

overall

discontent

with
in

the

cloud

CRM

space

because

customers

want

the

cloud

CRM

to

integrate

with

on
-
premise

solutions.

The

final

source

said

demand

for

SaaS

in

Europe

lags

far

behind

the

United

States

because

of

the

economy

and

cultural

dif
ferences.



Partner

at

a

large

integrator,

expert

in

the

banking

sector

Demand has picked up for SaaS solutions in the last six months. The most requested solutions are from
SAS Institute
Inc.
, Oracle, IBM and Salesforce. Salesforce is bidding on all available projects but winning only a small percentage.
Companies’ different departments are choosing best-of-breed, which means having multiple vendors and creating an
opportunity for large vendors to consolidate all SaaS on their platforms. SAP does not have the advantage of turning its
installed base into SAP SaaS users because of its lack of banking clients. In the banking sector, on-premise software is
still preferred to SaaS, especially for large projects.
 “In the past months SaaS demand has accelerated.”
 “We have most SaaS projects on Oracle with Siebel, SAS, and Unica

from IBM. Salesforce is in on every bid but not winning much. SAS has
won some large projects as they have invested a lot both in technology
and marketing.”
 “In financial services, there is a lot of custom and legacy software. As
companies move to SaaS, it will be interesting to see what happens.
Large vendors such as SAP are at a disadvantage as they can’t
leverage their installed base. When a company needs a new module,
they do not have to plug it in a specific ERP, so they are free to buy
what they want.”
 “Despite a strong push from vendors, SaaS is still seen with caution in
the banking sector. There is a certain success of SaaS to solve specific
problems at a departmental level but for complete implementation of a
global CRM, for example, on-premise is preferred.”
In the past months SaaS
demand has accelerated
.


We
have most SaaS projects on
Oracle with Siebel, SAS, and
Unica from IBM. Salesforce is
in on every bid but not winning
much. SAS has won some large
projects as they
have invested
a lot both in technology and
marketing
.

Partner, Large Integrator
E
xpert in the
B
anking
S
ector



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

6

 “We have seen many cases where CRM software in the same company is from many different vendors. For
example, one company has the email marketing SaaS software from Siebel and marketing campaign from SAS.
In that way, we see a strong move for choosing the best-of-breed.”
 “Some marketing departments have started using SaaS email management or marketing campaigns products,
but there is no SaaS for large platforms.”
 “Some vendors have certain products as SaaS, and we had the case of a client who wanted on-premise so the
vendor had to modify its system to have it on-premise.”
 “Our large clients prefer to purchase their main solutions from large and widely known vendors such as Oracle,
SAP, IBM. However, they are quite open to choosing a smaller vendor for a noncritical software application.
Salesforce is very strong at the moment as they were the first and are the leader, but we have to see if they can
stay ahead.”
 “We see demand for SaaS and CRM everywhere, with reduced budgets in Southern Europe but great
opportunities in the Middle East and Northern and Eastern Europe. We have large projects in Russia and Great
Britain.”


Partner

at

a

large

integrator,

expert

in

human

capital

management

(HCM)

SaaS solutions are dominating the HCM market. Companies are implementing HCM only in a SaaS mode, and vendors
are investing heavily to move all their clients to SaaS. The top vendors are SAP, Oracle and IBM. Most clients are
consolidating on large vendor solutions while small software vendors have a marginal presence at the enterprise level.
 “SaaS is the future of ERP, vendors are investing heavily on SaaS so that all their tools are offered in a SaaS
mode. All new Oracle Fusion
releases are SaaS, and all new SAP tools are also SaaS. Even traditional
administrative tools such as payroll are now offered as a service. SAP has invested a lot in this program.”
 “The technology is safe. Nothing can stop SaaS besides some psychological problems in some sectors where
companies are afraid about sensitive data. But data is likely safer on a vendor server than in a company data
center.”
 “The market is divided between Oracle and SAP. IBM is third and, with
the acquisition of DemandTec in 2011 and Kenaxa
last August, clearly
wants to expand in the cloud based software space.”
 “There is a consolidation in process. Most of our large clients are
consolidating on large software vendors, so SAP, Oracle and IBM are
getting more business than the smaller vendors. This is thanks to the
large three vendors’ investments in the space. Companies trust those
vendors to fill the gap with smaller companies’ technology soon.”
 “When you implement a software on-premise, you need four or five
years to break even. It’s faster with cloud-based software. So both for
cost reasons and implementation time, all new business is for SaaS.
Implementations are fast, even if they need some tuning. Revenues are
moving from implementation fees to high level consulting and licenses
for the vendors. SaaS license cost is still high, with little hope to go
down since there are very few vendors to chose from.”
 “Analytics are hot at the moment. We can see that HCM analytic
components are in demand. SAP has good modules with
SuccessFactors
. Projects are booming, I can only see growth ahead with
the only limitation of deciding whether we do a piece on premise when
needed by the clients.”
 “Geographically, we see demand worldwide for HCM software, all of it based in a cloud. Clouds are based in
many different places in all continents, and data centers are now ready to host most demand.”


L
arge

integrator

p
artner

and

BI

expert
;

repeat

source

Demand for SaaS in the BI space is limited by technical problems. The market leader has yet to be named, but
MicroStrategy is ahead both in market perception and technology. SAP and IBM are trying to close the gap.
 “The SaaS mode is getting dominant in several areas, but in BI this is not the case. This is mostly due to the fact
that a reporting tool that needs to analyze data from multiple silos across the enterprise is not yet available in a
cloud mode. Demand is there and growing, but sales are rare.”
Most of our large clients are
consolidating on large software
vendors, so SAP, Oracle and
IBM are getting more business
than the smaller vendors.
This
is thanks to the large three
vendors’ investments in the
space. Companies trust those
vendors to fill the gap with
smaller companies’ technology
soon
.

Partner, Large Integrator
E
xpert in
H
uman
C
apital
M
anagement



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

7

 “All vendors have SaaS BI tools. Salesforce has analytic tools in their
solutions, but they are unable to report on all company data. Most
tools have nice applications to run on smartphones and tablets but
nothing as powerful as the top reporting tools on-premise.”
 “SAP has good reporting tools for SaaS, and IBM has Cognos
on
demand, which is good. But all those solutions are only used for small
tasks so far. When you try to cross data between different silos and
different environments, it does not work. You need complex data
management software, such as Informatica, and good BI software. You
could run this on a cloud in theory, but I have not seen this yet.”
 “MicroStrategy has been offering very interesting cloud-based tools for
BI applications analyzing big data on the Internet and other functions.
Those are technologically ahead and are working quite well, but they
are again departmental solutions. I have not seen a global installation
of a main BI software cloud-based.”


VP

at

an

established,

cloud
-
focused

CRM

data

integration

solution

provider

Product innovation is strong in the entire cloud CRM market, but the most salient question customers ask is if the latest,
coolest cloud CRM application will integrate with their on-premise system. Companies are moving toward the cloud but
have millions invested in their on-premise systems. Because the top spots in the CRM industry are secured by a few large
players—Salesforce.com, Oracle and Microsoft—many remaining cloud CRM vendors now are focused on creating
specialized applications that will fully integrate with products from these big players. Still, fully integrated cloud CRM
applications are not the norm, and vendors often promise more than they can deliver. Discontent toward cloud CRM
solutions has been created by this roadblock as well as by companies’ tendency to flock to the latest cloud CRM
application before they have fully established how to use the data.
 “The top three players in the cloud CRM market are Salesforce.com, Oracle and Microsoft, but it’s impossible to
put them in order because they shine in different areas.”
 “Salesforce.com is leading the cloud in brand recognition. They’re transforming CRM to full-force customer
engagement model by also incorporating social CRM and marketing aspects, and building out their platform way
beyond just sales.
 “Oracle’s strength is that’s its cloud CRM solution is very elastic. Customers can mix and match work systems
and put them together like Legos for a custom solution.”
 “Microsoft’s dominance is less about its cloud CRM and more about its
xRM platform, which represents the extension of CRM platforms far
beyond customer relationship management to almost any relationship
that a business needs to manage. This platform is very well developed
and powerful, and it’s transforming the whole arena for relationship
management.”
 “Very few companies are brave enough to rip out their legacy system
and start fresh with a cloud solution, so they integrate cloud CRM
applications with their legacy system. Often customers choose
applications from the same vendor as their legacy system but others
want the best-of-breed solution and find a way to integrate it with their
on-premise system.”
 “The cloud CRM applications most commonly integrated into the big,
on-premise CRM systems fall into four areas: finance, marketing
(including email automation, webinar features and social data tools), support, and sales (including
compensation management and coaching tools).”
 “‘Do you integrate with the CRM system I already have?’ is the hot-button question today for cloud CRM solution
providers. People are looking for fully integrative solutions. Many cloud CRM products don’t integrate, or they
have an API, which isn’t really integration. Going forward, only the cloud CRM systems that fully integrate with
the big players will grow.”
 “When I say that most cloud CRM applications don’t integrate, what I’m talking about is offering integration as a
product capability within their own UI. Almost all of the cloud CRM players out there have a stack of integrated
The SaaS mode is getting
dominant in s
everal areas, but
in BI this is not the case. This is
mostly due to the fact that a
reporting tool that needs to
analyze data from multiple silos
across the enterprise is not yet
available in a cloud mode.
Demand is there and growing,
but sales are rare
.

L
arge
I
ntegrator
P
artner
&

BI
E
xpert

Microsoft’s dominance is less
about its cloud CRM and more
about its xRM

platform
.


This
platform is very well developed
and powerful, and it’s
transforming the whole arena
for rela
tionship management
.

Vice President
CRM
D
ata
I
ntegration
S
olution
P
rovider



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

8

applications or an ecosystem of ISVs [independent software vendors] whose offerings integrate into their CRM
system. Salesforce, SAP, Oracle, Microsoft, [The] Sage [Group PLC
/LON:SGE], etc. all have marketplaces and
app stores where you can buy virtually anything to ‘plug and play’ into your CRM. And these vendors have
acquired complementary applications … and those are fully integrated into the Salesforce CRM platform.”
 “ISVs are obviously attracted to these cloud CRM vendors and provide integration to that cloud CRM to be
competitive. So I’ve got more that is ‘plug and play’ to my cloud CRM. Ideally, if I stick within that ecosystem, I
don’t have to worry about integration.”
 “There are two downsides: One, as a customer, if I want an integrated
cloud CRM, I would be limited to the offerings of the cloud CRM vendor
themselves or their ecosystem. That might not be attractive to me for a
number of reasons, and so now I have to figure out some way on my
own to integrate my cloud CRM to the applications I have or want to
use. The second downside is that level or complexity of the integration
offered. For instance, I might like and want a HCM system in my cloud
vendor’s ecosystem, only to discover that only a limited amount of
data is actually integrated with that cloud CRM. Again, I’m stuck having
to figure out a secondary integration to get the two systems connected
the way I need to for my business.”
 “If I have a huge investment in, say, Oracle Financials and I’ve bought
Salesforce, there is absolutely no integration between the two. I’m not going to rip out my investment in Oracle
and buy an ERP system, like FinancialForce
, that is integrated into Salesforce. It’s up to me to buy middleware,
custom code my own integration against Salesforce’s API, do manual data entry/export and import, or do
nothing.”
 “All of the major cloud CRM vendors—Salesforce, Oracle, Sage, Microsoft, SAP, etc.—have this problem.
Microsoft, Oracle and SAP may argue that they have products that provide integration, but they are separate
products and they have their own licensing, limitations and complexities. What cloud CRM vendors will ultimately
need to provide is an easy way for customers or partners to provide integration within the cloud CRM application
itself.”
 “We’re brought on before the cloud solution purchase to evaluate CRM product integration. Four or five years
ago we were brought in after a product that promised integration failed.”
 “Social CRM—the practice of including customer data from sources such as Twitter posts and Facebook Likes in
with other customer information—is both a driver and a roadblock to cloud CRM migration. Often companies fail
to think about social CRM operationally; they have no overall social strategy and end up saying to themselves,
‘So what do I do with all of this Twitter info?’”
 “We’re seeing people are buying components of cloud CRM because they already have an established on-
premise CRM. Some people are very devoted to their stack.”


European

integration

company

founder

and

subject

matter

expert

in

CRM

projects

since

1998

European multinational corporations have a vastly more cautious and tepid approach to cloud CRM than U.S. companies
partly because of the unstable euro economy and the difference in business culture. With the exception of European
technology companies and start-ups, which typically do not made huge investments in on-premise CRM, migration to the
cloud for CRM currently is not a business requirement. Cloud CRM innovations
making waves in the U.S., such as social CRM, are not even on Europe’s radar.
 “The number of enterprise multinationals in Europe using cloud CRM is
less than 15% because there’s still a lot of money invested in on-
premise systems.”
 “When European companies look at cloud CRM solutions they ask, ‘Do
I really have to have this now? Do I really need this to run my
business?’ Around 10 years ago, multinationals would have just
jumped in.”
 “The smaller cloud CRM companies are developing brilliant new
products. The bigger players in cloud CRM are following their lead or
acquiring them. The small companies are more agile and quicker to
What cloud CRM vendors will
ultimately need to provide is an
easy way for customers or
partners to provide integration
within the cloud CRM
application itself
.

Vice President
CRM

Data Integration Solution Provider

The number of enterprise
multinationals in Europe using
cloud CRM is less than 15%
because there’s still a lot of
money invested in on
-
premise
systems
.

Integration Company Founder &
CRM Expert
Europe



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

9

respond to changes in the industry. This has always been true. If it weren’t, Microsoft would have invented
Facebook.”
 “Social CRM isn’t happening in Europe. Maybe in about 15 years we’ll see it realized. The technology is light-
years ahead of the reality inside companies. Generally, there’s still a lack of understanding about the social
revolution and how to respond to it. Mindset is the problem. Companies aren’t changing their internal politics
and structure, and that impedes their progress.”
 “There are a few cloud CRM vendors at the top, and the rest of the field is fighting for a sliver of the market.”
 “Cloud CRM has been great for tech companies and start-ups, but multinationals are moving more slowly.”


Manager

of

channel

partnerships

at

a

major

software

and

hardware

company

Salesforce has the best product to date, but questions remain on how it can maintain its advantage over larger
companies that are quickly closing the gap through improved products.
 “I was having dinner with some clients and some people who work for a
SaaS company, and we were discussing SaaS offerings. Salesforce
clearly has the best technology at the moment—better than us or any
other software vendor.”
 “The question is whether they can continue to grow at this rate and
keep offering the same service quality. Can they manage their
success?”
 “SAP and Oracle are improving fast and getting closer to Salesforce.
I’m not sure what Salesforce can do to stay ahead.”


3)

INDUS
TRY

SPECIALISTS

These

five

sources

said

demand

for

SaaS

is

growing
,

and

identified

Salesforce,

Oracle,

IBM,

SAP

and

Microsoft

as

the

most

dominant

companies

with

little

challenge

from

any

up
-
and
-
comers.

One

source

said

Microsoft

offers

the

most

intriguing

product

and

innovative

technology

but

is

not

winning

more

deals

because

of lackluster promotion.
Another

source

said

Microsoft

is

ready

for

significant

growth

in

the

next

year

because

of

its

ease

of

integration

with

Office

and

Outlook;

he

also

predicts

slo
wing

growth

for

Salesfo
rce.

Two

other

sources

said

Salesforce

was

struggling

with

demand

and

would

have

to

innovate

to

stay

on

top.

Two

believe

Oracle

and

IBM

present

the

best

options

because

they

offer

hardware,

middleware

and

software.

Most

apps

in

the

c
loud

are

non
critical
,

which

is

why

the

focus

continues

to

be

on

HR

and

CRM

functions.

Companies

hesitant

to

use

SaaS

for

BI

functions

instead

opt

for

on
-
premise

or

private

cloud

solutions.



BI

specialist

at

a

consulting

group
;

repeat

source

Demand for SaaS is picking up. First, a migration on non–mission-critical applications to the cloud will occur, and then a
second group of applications such as ERP will move to the cloud when service quality increases. The remaining
applications such as BI will be SaaS as well when all software on the cloud will be able to interact properly.
 “Demand for cloud-based software is strong in several areas and growing. However, it will take time before it
moves from HCM and CRM to other areas. There is not a lot of activity in SaaS mode in BI, for example. Even
SAP declares only 2.7% of their sales as being cloud-based software. The reason is that companies don’t trust
data to be secure, the quality of the service is sometimes not enough for mission-critical applications, and last
but not least, software in the cloud usually does not integrate enough with software already used by the
company. The result is that most applications working in the cloud are noncritical.”
 “Of course, there are examples like Google or Amazon[.com Inc.
/AMZN] who run all in the cloud, but you don’t
have that many companies who would give Amazon or Google all their important data. HR, marketing, emails,
yes, but not core business data.”
 “One important issue about the cloud is data security, and it is the first problem to solve. In Europe, the
legislation is different from the U.S., and companies would rather [keep] their data in Europe or in private clouds
that respect their country policy. There are several examples of private clouds where software runs for a group of
companies or client of the company. … There are several European companies who don’t want their data to be
in the U.S. or Asia.”
 “The second issue is service quality. Several companies are afraid about downtime, software availability and so
forth. Before they put their mission-critical software in a cloud, they will need to trust the provider of the service.”
SAP and Oracle ar
e improving
fast and getting closer to
Salesforce. I’m not sure what
Salesforce can do to stay
ahead
.

Manager, Channel Partnerships
M
ajor
S
oftware
&

H
ardware
C
ompany



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

10

 “The last issue to be solved is interoperability and cooperation
between different software. Today it is still too complicated to have BI
tools interact and extract data from all different clouds. Therefore, BI
sales as SaaS don’t increase. This last step will happen, but it will take
years before companies have BI software in a cloud analyzing data in
the cloud entirely. The technology is not there yet.”
 “To offer high-quality SaaS, you need to have high-level technology
both on hardware/network, middleware, database and software. That
is why the leaders will be Oracle and IBM as they master the whole
chain.”
 “Others such as SAP who are very good will have to find partnerships
for the long term. They moved in the right direction with their
acquisitions of Sybase
for database and SuccessFactors for cloud-
based applications.”
 “All pure application players will have problems if they don’t change their business model. Salesforce and
MicroStrategy, who are leaders now, might be acquired or might lose market share if they don’t create an
ecosystem with hardware/datacenters specialists who can make sure they stay ahead of the group. Large
providers who master all and have giant installed bases will eat them up easily when their applications are
improved. We have seen companies moving to SAP CRM On Demand and not even thinking about Salesforce.
They got a much better deal; they paid very little for SAP CRM. SAP can give CRM for free to their clients and kill
Salesforce quickly.”


Software

consultant

at

a

service

group
;

repeat

source

Demand for SaaS is picking up, but not in all sectors and not at the same speed. CRM and HR are selling more, BI less.
Private clouds have generated considerable interest. The best positioned vendors are IBM and Oracle, thanks to their
knowledge of the whole chain. Oracle has a better software portfolio than IBM, but IBM has a better service organization.
 “SaaS offerings are mature and are getting a lot of traction in CRM and HCM. If we look at BI, however, sales are
lagging despite the fact there are strong products, such as Cognos on demand. Most clients would rather buy on
premise BI for the time being.”
 “Demand for private cloud is high. Clients use private clouds so they
can standardize, centralize their frameworks and harmonize all
reporting. They can use SaaS software but only for their own company
ecosystem. We see this kind of sale, but we can consider it as an on-
premise product. Vendors like on-premise more than the cloud as they
get all the cash ahead.”
 “Another trend in the field is selling software to integrators who then
can build services that include different vendor products and resell it to
end users.
IBM Application-Specific Licensing
(ASL) is an example of
this new way. Integrators can build applications including IBM software
and resell it to clients. Those are good initiatives as integrators and vendors converge on a service where you
can have software from different competitors work to the client’s advantage.”
 “The technical approach is back and winning. The leaders of tomorrow will have to master hardware plus
middleware plus database plus software to be able to offer a service. Oracle has all of that. IBM has almost all;
they need to have a bigger application product portfolio. Salesforce has the best technology on the market, but
they are having trouble coping with demand and they will struggle in the future.”


Software

consultant

at

a

service

group
;

repeat

source

Microsoft’s SaaS offering is the most intriguing, but the company is not effectively promoting it and not winning as many
new deals. Solutions from Oracle and IBM are confusing in terms of which database each would use for BI SaaS, which
also is hurting them in CRM and HR solutions. Salesforce needs a partner in order to become into more of a technology
player.
 “Microsoft has a good offer around SQL Server and Azure
. Data market is very innovative as you can extract
external data quite easily, but they are not pushing this product enough I find. They don’t focus on BI, but they
To offer high
-
quality SaaS, you
need to have high
-
level
technology both on
hardware/netw
ork,
middleware, database and
software. That is why the
leaders will be Oracle and IBM
as they master the whole chain
.

BI
S
pecialist
,

C
onsulting
G
roup

Salesforce has the best
technology on the market, but
they are having trouble coping
with demand and the
y will
struggle in the future
.

Software
C
onsultant
,

S
ervice
G
roup



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

11

seem to be using their good SaaS solution to sell Office, SharePoint, database. So they are not gaining that
many new deals where they could.”
 “I am skeptical about SaaS BI offers. Oracle, for example, has not made it clear if the database they would use
is Exalytics, Exadata or NoSQL. And what would IBM use: TM1, Netezza, Streams or BigInsights
? In the same
way, SAP and Oracle have a hard time succeeding in CRM and HR SaaS even if they master the whole chain.”
 “SAP with HANA is going the right way, forgetting about BW [business warehouse] and simplifying the restitution
toolset. Salesforce needs to partner, merge or buy some smart fit for them and position themselves as a
technology player plus analytical CRM, as Siebel had done with the offer that now is OBIEE
.”
 “I am a bit skeptical about BI SaaS except in managing/performance management tools such as EPM/CPM,
analytical HR, sales performance management, and web and social network analytics areas. Obviously, if the
source software is already SaaS, then you can plug in any SaaS tool. Agile BI—generic tools non-preconfigured
for specific verticals—is more bound to succeed now, especially if they can be put together by nontechnical
teams.”


Prominent

cloud

CR
M

c
onsultant,

CRM

industry

speaker

and

author

Many companies have migrated from their legacy CRM solutions to cloud CRM
solutions in the past three years because cloud CRM offerings from Salesforce,
Microsoft, Oracle, and SAP have matured, have proven to be economical and
have addressed customer concerns. Microsoft is expected to make a big leap in
the CRM market in the next year through the integration with Outlook and Office.
Salesforce, on the other hand, will see its growth slow. Also driving the highly
competitive cloud CRM market is the integration of social CRM with traditional
CRM. Other than Salesforce.com, which continues to dominate in terms of
innovation and mindshare, traditional CRM vendors have retained their share
through acquisitions, new product development, and interfaces to transition
existing customers from legacy to cloud CRM.
 “The top four companies in cloud customer relationship management—
Microsoft, Salesforce.com, SAP, Oracle—vastly outpace any
competitors. Although it is difficult to calculate true market share, you
could say these top four represent roughly 75% of the cloud CRM
market and the rest of the vendors are battling for the other 25%. Close to breaking into fifth place with the top
four major players, however, are SugarCRM
or Infor
.”
 “Salesforce.com is the cloud CRM company everyone responds to. It’s smaller than Oracle as far as revenue, but
they dominate the cloud because not only are they a proven innovator delivering new product features and
capabilities on a continuous basis, but also they promote an active user community.”
 “Microsoft is poised for explosive growth in the CRM market in the next year because of all of their other
advances, such as its tablet, its phone operating system, and the easy integration with other Microsoft products
including Outlook and Office. Its CRM will follow on the coattails of its other successes in product integration and
market dominance.”
 “Salesforce.com has always had a high growth trajectory, but that will
slow in the next year. Oracle and SAP, while still very strong, are on a
slightly lower trajectory as well.”
 “The cloud is now the standard for CRM. Most enterprises have or are
in the process of moving their CRM to the cloud because it’s proven,
it’s stable and it’s the logical economic choice.”
 “Companies had millions of dollars invested in their legacy CRM
systems so they stayed with those systems as long as possible. But the
time is now to move to the cloud.”
 “It’s not necessarily true that enterprises will always move to the cloud
CRM solution offered by its current legacy system CRM, but there is an
element of convenience and efficiency in doing so.”
 “All new players in the CRM market are cloud solutions. It’s inevitable that all CRM systems will move to the
cloud in part because of the rise of social CRM. All CRM today is really social CRM. Companies have long since
Microsoft is poised for
explosive growth in the CRM
market in the next year
because of all of their other
advances
, and the easy
integration with other Microsoft
products including Outlook and
Office
.

Prominent Cloud CRM Consultant,
CRM
I
ndustry
S
peaker
&

A
uthor

Salesforce.com has always had
a high growth trajectory, but
that will slow in the next year.
Oracle and SAP, while still very
strong, are on a slightly lower
trajectory as well
.

Prominent Cloud CRM Consultant,
CRM Industry Speaker & Author



SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

12

interacted with customers in the social media space, but now social CRM is about capturing that data, capturing
how customers feel about your products.”
 “The same dominant cloud CRM companies are leading the social CRM space as well, with the addition,
perhaps, of social CRM specialist Marketo [Inc.]
.”
 “Enterprise companies decide on a CRM solution in the same well-defined corporate vendor selection process
as any other company system. Often there’s an RFP. Some companies will go to influencers, consultants or
experts like Gartner [Inc.
/IT] and ask questions. Everyone wants the easy answer to the question, which is the
best cloud CRM for my business, but influencers must know your business, your needs, etc.”


Cloud

CRM

industry

consultant,

tho
ught

leader

and

author

Cloud CRM solutions are advancing rapidly, fueled by social CRM and the use of mobile devices for CRM. However,
competition is among only a few at the top; the rest compete for customers in niche areas. Salesforce.com retains its 10-
year dominance of the cloud CRM space, and the only competition is from large, on-premise CRM vendors such as
Microsoft and Oracle. These vendors are migrating their existing customers to the cloud, but the rate of penetration
varies by industry. No new players are expected to break into the top spots of the cloud CRM market.
 “Cloud is the new black, but it takes a long time to migrate people to a
new paradigm. Cloud CRM will take a while to reach 100% saturation.”
 “There isn’t a company that hasn’t dipped its toes in the cloud, but the
percent of cloud penetration among enterprises is difficult to pinpoint.”
 “The slowest cloud CRM adopters are industries that are regulated,
such as some aspects of financial services industry and the healthcare
industry. … The pharmaceutical industry was an early adopter of cloud
CRM in part because sales reps in the field use mobile devices to
present product information. Other early adopters of cloud CRM are the
technology and manufacturing industries.”
 “In the cloud CRM market, there are top players, and then a fair
amount of distance back is the rest of the field. CRM is a settled
market, and now it’s a slugfest among the big players for cloud CRM
supremacy.”
 “In first place in the cloud CRM market is Salesforce.com because it
has been around so long and has very large numbers as far as clients
and seats—somewhere around 120,000 company clients and one
million seats. No. 2 would be Microsoft’s CRM cloud solution. Microsoft
has a bigger footprint in the cloud CRM space than Oracle because of
longevity. SAP has had some fits and starts in cloud CRM and isn’t a
major player yet.”
 “Oracle’s cloud CRM called On Demand is pretty good and has around 35,000 customers, but Oracle is not
larger than Salesforce.com in terms of cloud dollars.”
 “There is a huge number of small players in cloud CRM, but most don’t have much marketing. Right now these
players are going after the niche areas in cloud CRM, such as social CRM and cloud marketing solutions.
Companies can use these niche products in combination with solutions from bigger players. A good niche cloud
CRM solution provider is often acquired and incorporated by the big players.”
 “Social CRM is partly driving cloud CRM, but there’s also the ubiquity of mobile devices. The iPad is a really
important platform for cloud CRM.”


Secondary

Sources

These

five

secondary

sources

focused

on

CRM

market

leaders,

with

Salesforce

in first place and

then
followed

by

SAP,

Oracle

and

Microsoft.

Our

review

of secondary sources
also

found

c
oncerns

abo
ut

the

limitations

of

Salesforce

s

solutions

and

the

need

to

use

other

vendors

for

specific

organizational

needs.

Also discussed were
Salesforce

s

bet

on

enterprise

social

networking

and

the

benefits

of

Microsoft

s

xRM

CRM

tool
.


There is a huge number of
small players in cloud CRM, but
most don’t have much
marketing. Right now these
players are going after the
niche areas in cloud CRM, such
as social CRM and cloud
marke
ting solutions
.


Social
CRM is partly driving cloud
CRM, but there’s also the
ubiquity of mobile devices. The
iPad is a really important
platform for cloud CRM
.

Cloud CRM
I
ndustry
C
onsultant




SaaS Tools

1

Ferry Building,

Suite 255
,

San Francisco, CA 94111
| www.blueshiftideas.com

13


Article

in

the

August

2012

CRM.com

edition

This article provided a comprehensive look at the leaders in various CRM markets. Salesforce claimed the top spot for
enterprise and midmarket, while SAP, Oracle and Microsoft consistently appear on the leaderboard.
 “The CRM market continues to prove its worth with some impressive growth. According to one analyst firm’s CEO
survey, CRM is the most important area of investment to improve business over the next five years. Fueling this
growth are investments in software-as-a-service, social, mobile, analytics, and even gamification applications.
Find out which vendors are ramping up these offerings and best responding to industry needs in this year’s
Market Leader awards.”
 “Enterprise Suite CRM: This year, CEOs rated CRM as the most important area of investment to improve their
business over the next five years, according to Gartner’s 2012 CEO Survey. Global CRM software revenue
totaled $12 billion in 2011, a 13.5 percent increase from 2010. Software-as-a-service (SaaS) deployments
continued their growth trend, accounting for 32 percent of the CRM software market in 2011.”
 Leaders: Microsoft earned a solid score of 4.0 in cost for its pricing strategy. … NetSuite’s scores were
consistent with category averages across the board. NetSuite is paying careful attention to cloud commerce. …
Oracle made our leaderboard again, with good reason. … SAP again makes its presence known in the enterprise
suite CRM category.”
 “Winner: Salesforce.com, our enterprise victor, showed off a prime score of 4.5 for company direction. The
company continued to wow judges this year, especially with its $50 million acquisition of SaaS solution Assistly
(now Desk.com) last fall.”
 “Midmarket Suite CRM: Last year’s blurring of the lines between midmarket and enterprise CRM offerings has
not cleared much. The likely trailblazers in the midmarket are those vendors that account for the surge in cloud,
social, and mobile computing.”
 “Leaders: Microsoft’s release of Dynamics CRM 2011 continued to shake out with a Q2 2012 update, which
included native support for mobile devices and planned upgrades in social customer care. … NetSuite took a
solid 3.9 for company direction, a slight dip from its 4.1 last year, but analysts seemed pleased with this
vendor’s overall performance. … Oracle scored strong in functionality, nabbing a 4.1, a drop from last year’s 4.4.
… SugarCRM held its competitive pricing edge, earning a score of 4.1 for cost.”
 “Winner: Salesforce.com continued its winning streak, pulling the rug out from under its competitors for
reputation for company direction with a score of 4.4.”
 “Small-Business Suite CRM: When it comes to small and midsized businesses (SMBs), cash is king. Affordability
and pricing often take precedence over intricacies in functionality, and this year’s small-business suite CRM
leaders are no exception.”
 “Leaders: Microsoft made it on to our leaderboard for the second year in a row, following a four-year lapse. …
NetSuite inched up from its position as One to Watch last year to place on our leaderboard. … Our winner in this
category for five years straight, Salesforce.com did not relinquish its crown without a fight. It continues to be
seen as a top innovator among industry experts. … SugarCRM carved out a niche again on the small-business
suite CRM leaderboard, with a score of 4.0 in the cost category.”
 “Winner: Zoho stepped up its game and stole top spot as our winner with a 4.5 for cost and a 4.0 for
functionality.”
 “Business Intelligence: As big data continues to grow, the business intelligence market does too. Start-ups and
established vendors are racing to help companies unlock insights about consumers by offering tools to mine
data, analyze it, and track it in real time. The market is dominated by companies buying their way in.”
 “Leaders: ‘Oracle gets big data,’ says John Ragsdale, vice president of technology research for the Technology
Services Industry Association, adding that the company is oriented toward helping customers leverage BI
through its core applications. … Last year’s One to Watch, Qliktech, has jumped to the leaderboard. … SAP once
again snagged a spot on the leaderboard with SAP Business Objects and its HANA in-memory database. … SAS

Institute’s offerings continue to secure its position on the leaderboard.”
 “Winner: The reigning champion for the fourth year in a row, IBM continues to be a ‘dominant player,’ thanks to
multiple strategic acquisitions in the BI space, according to Ragsdale.”
 “One to Watch: As a business intelligence provider, Teradata is a company to watch.”






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Sept.

6

Forbes

article

Salesforce is leading the way in SaaS, but product elements are missing, including the need for better revenue
generation reporting and analysis. Salesforce also falls short in the ability to provide a solution to bridge the various
disparate platforms a company may engage throughout the organization.
 “Who would have thought that, 12 years ago, when Marc Benioff started Salesforce.com the ‘end of software’
story would unfold the way it did? This past period, Salesforce.com reported another amazing quarter (+34%
growth YOY) and its stock is up 42% since the beginning of the year. With a $3B run rate, the company
continues to acquire capabilities and companies that further its Social, Mobile and Cloud mission.”
 “Salesforce.com’s Chatter, the Radian6 and BuddyMedia acquisitions are a great testament to the company’s
commitment to Chief Marketing Officers. There is no doubt, marketers need systems to better listen and engage
via social media.”
 “However, as I discussed in my recent keynote at the Predictive
Analytics World this year, marketing to sales visibility remains a
challenge for many. Too often, marketers can’t answer the most basic
lead-to-cash questions their business relies on. Ask your marketers if
they can tell you which leads generated the best opportunities for your
company and you’ll find that many struggle to express clear correlated
insight.”
 “You could argue that social media is hotter than lead-to-cash.
However, when building a world-class marketing organization, which
one should you build first? If the growth of SaaS player Marketo or
Eloqua’s recent IPO are any indication, companies are in deep need for
better revenue generation reporting and analysis.”
 “This concept is critical because the need for better reporting and
analytics doesn’t end with sales and marketing. It also extends to other
parts of the organization; what about marketing to sales, sales to
order, or order to customer support? What if your organization has
Zendesk for Support, Intuit Quickbooks for Finance, Google Adwords
for Advertising, Salesforce.com for Sales, and Microsoft SQL Server for
Product SKU Management? Today, the solution for cross-company data
analytics sits outside of Salesforce.com.”
 “Analytics is hot and Salesforce.com witnessed the demand when it
shipped its Analytics Edition last year. Salesforce.com out-of-the-box
reporting has matured very well over the years; today, the application provides dashboards that can be emailed
on a schedule and it features advanced capabilities like bucketing and cross-filtering.”
 “To complement Salesforce.com’s offering and get to the next level, companies focus on higher ticket items
such as ‘what-if’ analysis or better insight from lead creation to opportunity closing: for instance, they seek to
understand lead-to-opportunity aging, ROI analysis by stage, or ratios between lead flow, opportunity creation
and value. Finally, snapshot-based historical analysis is on top of the list for sales organization that want to
understand pipeline movement and increase predictability.”
 “To compete better, companies need to build these analytics in a way that adhere to Salesforce.com’s key
design principles: user-friendliness & fast time-to-market. There is, however a disconnect between
Salesforce.com’s modern approach to technology and most of the Business Intelligence vendors, who no matter
how agile they claim to be, require technical know-how to get going or significant capital investment for storage
or hardware.”
 “Who knows? Will Salesforce.com reinvent this category or will its partners sufficiently address the need
customers have for a cost-effective, easy-to-use data environment that is optimized for analytics across
Salesforce.com data and any other source?”


Sept.

19

San

Francisco

Chronicle

article

Salesforce opened its Dreamforce conference with a bang, introducing products that include a social media focus.
Competition is heating up as Oracle, SAP and Microsoft are making acquisitions to compete in the SaaS space.
You could argue that social
media is hotter than lead
-
to
-
cash.

However, when building a
world
-
class marketing
organization, which one should
you build first? If the growth of
SaaS player Marketo or
Eloqua’s recent IPO are any
indication, companies are in
deep need for better revenue
generation reporting and
analysis
.


Today, the solution
for cross
-
company data
analytics sits outside of
Salesforce.com
.

Forbes
A
rticle



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 “Salesforce.com marked the opening of its largest-ever Dreamforce conference Wednesday by releasing a new
version of its software for tablet computers and gathering its social-media marketing products into a single
group.”
 “Chief Executive Officer Marc Benioff outlined the new offerings for an overflow crowd at Moscone Center in San
Francisco. Salesforce says more than 90,000 people signed up to attend the three-day conference, which would
make it the largest technology related gathering of the year.”
 “Salesforce, which sells software over the Internet instead of as a packaged product, will offer its customer-
management tools via Salesforce Touch on Apple’s iPad and other tablets using HTML 5, a standard that
delivers richer graphics and features over the Web. Its new Marketing Cloud software offers social-media tools
for companies to collect and share information, Salesforce representatives said.”
 “Benioff also plans to outline features of a new human resources software called Work.com, and an online
storage product called Chatterbox.”
 “The announcements come as larger rivals Oracle and SAP move aggressively onto Salesforce’s turf using
acquisitions designed to take part of the market for business software delivered over the Internet—estimated to
be worth $49 billion, up 25 percent from last year.”
 “‘What (Benioff) needs to convince investors of is that he’s got enough
market opportunity to keep growing north of 30 percent’ a year in
sales, said Pat Walravens, an analyst at JMP Securities in San
Francisco. ‘He needs to enter new markets.’”
 “Benioff opened the conference in dramatic fashion, taking the stage
after a surprise appearance by rapper MC Hammer and his dance
troupe. His two-hour keynote speech amounted to a well-orchestrated
pep rally touting the power of cloud services to change the way
products are manufactured and delivered.”
 “In one presentation, Benioff showed how General Electric Co. is
outfitting jet engines and other equipment to broadcast status updates
that its engineers can monitor. GE’s CEO, Jeffrey Immelt, speaks at the
conference Thursday.”
 “Salesforce is working to annex new areas of online software for businesses. Benioff plans to show how the
Marketing Cloud software combines functions from acquisitions Radian6 Technologies and Buddy Media for
marketing on social-media sites such as Facebook and Twitter. Salesforce is also extending its Chatter business
social-networking software for customer service scenarios.”
 “Meanwhile, competition is intensifying in the cloud sector. Oracle, SAP and Microsoft have been buying
companies that offer business-management tools over the Web, an area Salesforce pioneered.”
 “In February, SAP bought online HR software maker SuccessFactors Inc. for $3.4 billion, and in July, Microsoft
bought Yammer Inc. for $1.2 billion to gain business social-networking software. Oracle said last week that it will
buy SelectMinds Inc., a maker of online recruiting software, for an undisclosed amount.”
 “Workday Inc., which filed last month for its initial public offering, recently landed a deal with Google to supply
human resources software for tens of thousands of employees.”
 “Last month, Salesforce forecast profit for the fiscal third quarter ending in October that missed analysts’
estimates as the company increased sales and marketing spending. Shares of Salesforce rose more than 1
percent Wednesday to close at $157.98. The stock is up 54 percent this year as of this week.”


Sept.

19

CNET

article

Salesforce is putting its growth strategy behind social networking in order to fend off rivals encroaching on its existing
turf.
 “Salesforce.com has focused its entire marketing message around social. An estimated 70 percent of
corporations are already embracing social in some fashion, with 47 percent annual growth expected in those
social networks, according to IDC.”
 “While Facebook is the dominant social network, with nearly a billion members, Salesforce.com is baking social
deeply into its platform with Chatter, a Facebook-like application designed for businesses. Benioff described
how GE could operate more efficiently by building social networks around projects. ‘It’s a revolution when your
aircraft engine is on a social network,’ he said.”
Meanwhile, competition is
intensifying in the cloud sector.
Oracle, SAP and Microsoft have
been buying companies that
offer business
-
management
tools ov
er the Web, an area
Salesforce pioneered
.

San Franci
sco Chronicle
A
rticle



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 “Several customers, including executives from Coca Cola, Virgin Airlines, Activision, General Electric, Burberry,
and Rossignol, were called upon to testify for Salesforce.com’s social platform.”
 “For Salesforce.com, failure comes when it stops growing. The company expects to generate $3 billion in
revenue for its fiscal year ending April 30, 2013. With Microsoft, SAP, Oracle, and others pursuing the same
social enterprise vision originated by Salesforce.com, getting to $5 billion won’t be as easy as the first $3
billion.”
 “The company is hiring sales executives to go after different markets, such as automotive and the financial
industry, in an effort ‘talk to customers in their own language’ and tell compelling stories that convey real value
for customers.”


May

3

InformationWeek

article

Microsoft’s xRM has allowed the Los Angeles Department of Public Health to develop custom health-related applications
that exceed the effectiveness of anything already built.
 “Most healthcare organizations, including public health departments, have a lot on their IT to-do lists. The Los
Angeles County Department of Public Health (LADPH) is no exception.”
 “The department two years ago began taking an innovative approach to developing specialized tools. It began
using Microsoft’s Dynamics CRM platform for custom application development, a strategy also known as
extended relationship management (xRM).”
 “Jim Green, CIO of LADPH is using Microsoft ‘s CRM xRM framework to create customized applications instead
of building custom .Net applications or purchasing expensive commercial systems, such as a pharmacy
inventory management app that likely would have been overkill.”
 “Tapping the capabilities of Microsoft Dynamics CRM xRM, it took only a few weeks for Green’s team to develop
a special vehicle inspection tracking app, he said. ‘The previous application was an amateur
database
application
. We created a more cohesive application for the department.’”
 “The CRM platform was also used to create tools for inventory management for prescription drugs.”
 “Among other applications the department developed using the CRM platform is a case management system for
the department’s public health nurses and investigators who often work in the field or at the department’s
community health centers.”
 “The applications LADPH built using the CRM xRM framework help automate the assignment of public health
nurses and investigators to cases, and then provide tools to help them manage the workflow of the cases. That
includes built-in reminders about actions and follow-ups that need to occur in a case.”
 “All in all, using the CRM xRM
framework for building specialized tools, ‘we can get working software into the
hands of the users more quickly so they can start realizing the benefits,’ Green said.”



Additional research by Carolyn Schwaar


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