While widespread adoption of Web services is still years away, CRM vendors are starting to stand up and take notice of the technology that could fundamentally change their business.
"The biggest thing you're going to see is the days of the monolithic application are going to change in the Web services environment," said Scott Nelson, vice president and distinguished analyst with Stamford, Conn.-based Gartner Inc. "More and more, clients are interested in composite applications. It provides a truly customized and unique environment."
San Mateo, Calif.-based NetSuite was the latest vendor to jump into the Web services game with the release of its NetFlex application, a customization tool with an XML-based interface built on the Simple Object Access Protocol (SOAP) standard. SOAP essentially allows programs built on one operating system to communicate with another program running on a different operating system.
Additionally, BEA set its sights on the CRM world in November with the launch of the Solution Framework initiative, a program to helps its customers tie together customer service applications through Web services.
Thus far, Epiphany in San Mateo and Seattle-based Onyx Software Inc. have made the greatest commitment to Web services amongst the CRM vendors, with Epiphany committing to the J2EE standard and Onyx working with Microsoft's .NET, Nelson said. Germany's SAP AG, has been pushing its NetWeaver platform to develop SAP and other applications using Web services technologies.
"This is a major changeover analogous to moving from the mainframe-based system to client-server," Nelson said. "It requires rearchitecting and the redesigning of the core product."
Yet there is a bit of a "chicken and an egg" problem so far, Nelson said. Vendors are reluctant to build out Web services capabilities until they see demand for it and customers want to see it working somewhere successfully before they make a commitment.
Nonetheless, prepare for the arrival of Web services in CRM, Nelson said. Companies should develop some Web services expertise in house. Additionally, firms need to have a firm understanding of their internal processes and where they'll get the most return on strong technological functionality, "so when these tools are available they're ready," Nelson said. It should be another 24 months before CRM vendors begin to offer Web services tools.
While it's early to identify a consistent pattern of Web services usage within CRM, there has been some work done in integrating scattered data sources as well as combining operational systems into CRM, Nelson said.
Customers of Kana Software Inc. in Menlo Park, Calif., are beginning to look to interface their own applications with Kana systems, said H.A. Schade, vice president of products.
"It's pretty pervasive," Schade said. "A lot of customers are increasingly interested in it. We get a lot of questions on 'how do I access your Web services layer?'"