Current Trends in the CRM Software Industry

by A Technology Digest, Adhanda Enterprises, LLC

With 56 percent of the CRM software market--some 3,000 customers--at its command, you’d think that Siebel Systems Inc. would have an easy time introducing its latest offering, the thin-client based Siebel 7 suite. But as Jennifer Maselli writes in the October 1 issue of Informationweek, that isn’t the case. In fact, the software giant is facing stiff competition from PeopleSoft, SAP, and Epiphany.

One of the reasons for this is clearly the softening economy, according to Informationweek. Reduced budgets are clearly having an impact on what business technology managers are willing to spend on CRM implementations. For example, AMR Research has reduced its 2001 growth projections for the CRM market from 40 percent to 28 percent. Morgan Stanley now estimates growth at 10 to 15 percent per year through 2005. Gartner forecasts that the software purchase process time will increase from 12 to 18 months.

Another reason, Informationweek notes, is that other vendors are offering solutions that integrate well with clients’ existing systems, rendering large new CRM investments unnecessary in some cases. The journal points to Vancouver, B.C.-based Creo-Scitex, a digital imaging company, which decided to go with SAP’s CRM 3.0 suite after evaluating Clarify and Siebel because the company already used SAP. The CRM suite allowed the company to maintain a single view of its customers.

And Siebel was not the first to introduce a thin-client architecture. PeopleSoft’s Web-based CRM suite, PeopleSoft 8, was launched in June. If Siebel 7 had been there first, MedSolutions would have bought it, says CEO Kirt Thorne. Instead, the Franklin, TN-based radiology management company opted for PeopleSoft. "The architecture was the most important thing for us," Thorne tells Informationweek.

Then there’s the increasingly important issue of analytics. Giga Information Group research director, John Ragsdale, tells the journal that the analytic capabilities in Siebel 7 have improved, but says that Siebel must enhance and embed them in all of its CRM apps. Otherwise, companies like Epiphany and Kana, which have emerged as complete CRM providers, will give the company a run for its money. St. Louis-based electrical products manufacturer Emerson recently selected Epiphany over Siebel because it found Epiphany’s analytics to be further developed.

Still, Siebel 7 does offer some significant improvements. For example, Ragsdale tells Informationweek, Siebel rewrote the user interface for the entire application suite and created a no-code client that will lower total-cost-of-ownership expenses, saving IT departments hundreds of hours in maintenance and implementation time. He adds that Siebel also used the same object-oriented design as its client-server suites, making its migrations easier than PeopleSoft’s.

Case in point: FleetBoston, a Siebel 7 beta tester, plans to use the suite to integrate document and content management, news, company reports, and customer information into its portal. FleetBoston Executive VP Dean Athanasia tells the journal "It provides tighter integration between Siebel and non-Siebel applications.