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crm software systems Top 10 CRM Software Industry Predictions

By Edy Henao and Barbara Mayfield

  1. Gets Acquired By Oracle
    Yes, we predict Oracle is the acquirer, not Google. The search giant has already passed on and we expect CEO Marc Benioff to rendezvous with his former boss Larry Ellison. Since early 2008 it's been rumored that has offered itself to Oracle as an acquisition candidate and this next year may just be the year this happens. Benioff has single handedly grown the SaaS software company from start-up to more than 1 million SaaS subscribers - and we suspect he will view the upcoming year as the last year to go out with a big bang. Maintaining the helm going forward may not provide the retirement party atmosphere Benioff is looking for.

  2. Traditional CRM Software Achieves Negative Growth; CRM SaaS Solutions Grow 16%
    The current economic climate is clearly influencing technology trends and technology adoption. The faltering economy will not be kind the the on-premise and CRM software manufacturers. In the prior economic downturn following the dot com bust, the CRM software manufacturers were able to largely hold their ground and retain stagnant growth. It's a different crowd now (then market share leader Siebel is now a very different company) and the current players will not be so fortunate next year fbecause this time buyers have a proven and cost-effective alternative with SaaS CRM solutions. We expect SaaS CRM applications to be recession resistant, but not recession proof. We forecast hosted CRM systems growth to decline to about 16%. However, as the Economist recently forecasted, once out of the current recession, SaaS will gain large numbers of new followers simply because it offers superior economics. Also as justifiably commented by visionary or mouth piece Marc Benioff (depending upon your view), "The capital crunch will put a spotlight on the advantages of cloud computing: less risk, no capital expenditure, predictable operating expenses and fast results. I believe that will translate into greater adoption for both cloud computing applications and platforms."

  3. Microsoft's Cloud Computing Will Disappoint
    Despite Microsoft's attempt to join the cloud computing and SaaS bandwagon, Microsoft Azure will become little more than an improved platform for MS Exchange. The Microsoft PR machine will continue to promote Azure as the next SaaS platform (or Platform as a Service as self proclaimed by, however, the technology does not yet match the rhetoric and Azure will gain little adoption from ISVs and customers. Microsoft's two decade history of getting new products right by the fourth version will likely be beat with Azure and we expect it will become a strong Exchange platform by 2011, however, fail to be taken seriously as a cloud-based or SaaS infrastructure.

  4. Google Remains Enterprise Irrelevant
    This was a prior year prediction - that held true - and despite Google's intentions will continue to hold true next year. Google has attempted to use its company acquisitions such as Postini and continued evolution of Google Apps to build upon increased enterprise customer acquisitions. While Google's software portfolio is making advancements in terms of transparency, security and enterprise level development languages, the applications themselves are inherently limited in terms of feature sets, functional depth and software flexibility. We do expect a high number of small businesses to adopt Google applications as cost effective alternative to Microsoft Exchange, Microsoft Office and Lotus Notes. However, while Google may slowly but steadily penetrate the small business market, the enterprise market demands more than just 'free' before replacing for their traditional business critical applications.

  5. BI Gets SaaSy
    Business Intelligence (BI) programs will gain much needed traction among SaaS CRM solutions. Hosted CRM, HRM, ERP and supply chain applications are easily accepted as viable online transaction processing (OLTP) systems, however, few SaaS solutions have extended their on-demand business software solutions with real BI applications. BI is particularly strategic as it is directed to the knowledge workers and business line managers who perform the majority of the thinking and decision making throughout the enterprise. Empowering these people with tools which facilitate faster and more informed decisions delivers strategic payback to the company. We believe that in the next year SaaS business software programs will grow from just the over-hyped digital dashboards to include more powerful data marts, data warehousing and online analytical processing (OLAP). We suspect we will also witness a bifurcation in the BI offerings, with one set of programs embedded into traditional CRM business applications and another set of programs distributed as autonomous solutions capable of mash-up integration.

  6. SaaS ERP Becomes a Three Horse Race
    Notwithstanding the economic downturn and an overall declined growth rate, expect hosted ERP systems to gain the attention and media spotlight garnered by hosted CRM systems over the prior years. Also expect three vendors - NetSuite, SAP and Aplicor - to gain the majority of that attentionand market share. NetSuite continues to grow, however, also continues to struggle with excessive customer churn, partner churn and soon with those employee stock options deep under water, employee churn. Nonetheless, the company is a marketing powerhouse and will continue its growth. SAP will finally put a stake in the SaaS ERP ground with its Business ByDesign hosted ERP product. The German giant has incurred several self inflicted setbacks, including multiple software release delays, mixed market intentions and a bipolar approach in building its new SaaS business without eroding its core on premise revenue stream. Expect SAP to show progress, albeit in continued roller coaster fashion. Aplicor's hosted ERP system gets outstanding reviews from customers and very good marks from analysts. Expect Aplicor to continue to grow its almost sleuth like customer acquisition success and grow its market share as well.

  7. Corporate Barriers to Social Media Begin To Erode
    Enterprises and IT leaders concerned with information security compromises will begin to lower the corporate barriers associated with social media and Web 2.0 tools adoption. We believe that next year we will see a greater balance between IT sanctioned (and supported) social media tools along with the necessary insistence that security policies are equally applied to these new (often free, viral and open source) Gen Y productivity systems. Front office knowledge workers such as sales, support and marketing staff will figure out how to correctly use social networks in their day-to-day operations and for enterprise-approved business goals. Similarly, an increased volume of sales leads, staff recruits, market intelligence and business content will be sourced from traditional CRM business systems that link into Twitter, LinkedIn, Facebook and other social networks.

  8. ERP M&A Activity Accelerates
    Last year was a relatively mild merger and acquisition (M&A) year in the ERP industry and while a down economic climate might initially suggest an even slower next year, we predict that the deflated market valuations will bring acquisition candidates that were previously viewed as over-valued or just too expensive into the realm of acquisition. We also suspect a few of the smaller or middle-market software players may consolidate in an effort to achieve greater operating efficiencies and cost savings.

  9. Open Source CRM and ERP Fail to Gain Traction (Again)
    Last year was to be the year that open source CRM and ERP software applications evolved from an interesting proposition to a viable business option. It did not happen. The back office and ERP open source community failed to show growth, demonstrate customers successes and actually moved backswords in many aspects. The CRM software open source movement saw similar declines from the recognized players, with the possible exception of SugarCRM. SugarCRM enjoys good media coverage, a vibrant open source community (60,000 members strong) and proclaims growth and an IPO in 2009, however, the open source CRM company is rumored to be losing well over $1 million per month and living off its continual stream of venture capital infusions (now totaling approximately $50 million). Additionally, despite the company's aggressive efforts to acquire enterprise level customers, demonstrated successes and documented case studies are absent. Expect open source CRM and ERP projects to show slow but steady penetration in the small business market, however, continue to be passed over by the mid- and -enterprise markets.

  10. Twitter Gets Acquired
    The merging of CRM software and Twitter is not recognized by most, but we suspect it will become more recognized in the new year. The value of any technology innovation - and particularly social media innovations - is influenced in large part by emotion. Twitter has peaked those emotions with an outstanding community that shares the love with short but frequent posts. We believe that in the next year the owners of Twitter will choose to sell the company while the focus is on growth and good vibes and before the focus returns to preventing additional downtime outages, developing an acceptable plan to monetize the traffic or evolving into a traditional (and viable) business.
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