SAP may be the market leader in CRM overall, according to Gartner, but the latest Magic Quadrant for sales force automation (SFA) puts Siebel in front.
The Stamford, Conn.-based research firm last week released its regular market report on technology for sales professionals, and Siebel, now a part of Redwood City, Calif.-based Oracle Corp., is the sole vendor in the leader position. Germany's SAP AG was called visionary, and San Francisco-based Salesforce.com was named the sole challenger.
Gartner has been issuing SFA reports in some form or another since 1995, as the market evolved from direct sales technology to opportunity management to SFA, according to Rob Desisto, analyst with Gartner and author of the report. With this latest research, it's clear that on-demand CRM vendors such as Salesforce.com, RightNow Technologies and NetSuite are gaining ground.
"Those vendors are on the rise, and some of the traditional players, like the Oracle E-Business Suite, are falling," Desisto said.
Siebel, which built its business as a premise-based application, released an on-demand version several years ago, and SAP launched its own on-demand application in February.
Yet it is largely Siebel's history in the market that made it the leader. Siebel's comprehensive footprint, experience across multiple industries, and integration with disparate systems brought it to the top, according to Desisto. Despite the fact that the company had difficulty with execution (which ultimately led to its being bought by Oracle), it still had the largest number of users. And many were willing to upgrade to the latest version, Siebel 7.8.
"Had we found a lot of people waiting to upgrade, that would have affected their position," Desisto said.
SAP's undeployed seats
SAP, on the other hand, has sold more CRM software, but much of it has not been deployed.
"They sold the stuff via the easiest route, the people in IT," Desisto said. "If you don't win the hearts and minds of the people in sales, that's just going to sit there."
In fact, many SAP customers that were running the ERP system on the back end were using Salesforce.com for SFA, one reason the company elected to launch its own hosted tool. SAP's new 2006s release is helping to win over the sales side by improving the user interface, which is more like SAP OnDemand, Desisto said. SAP has also adjusted its market approach to sell to sales operations and the vice president of sales within an organization, even to people who have already bought SAP software.
Changing of the guard
"It's a little bit of a changing of the guard with the influence of on-demand on the marketplace," Desisto said. "[On-demand has] brought control back to the VP of sales."
Because they house the application in the vendor's data center and the software is delivered over the Internet, on-demand CRM tools do not require the involvement of IT the way a premise-based deployment does, allowing divisions and smaller companies to deploy the technology faster. Desisto added that the subscription-based pricing model allows sales operations to pay for the tools out of operational budgets rather than via a cumbersome capital expenditure that requires more approval.
The on-demand model is here to stay, however. Once referred to as "CRM with training wheels," hosted applications have proven themselves through widespread adoption by sales teams, and they are not going to be ripped out and replaced with on-premise tools.
"What do you do -- tell salespeople who are using CRM for the first time that you're taking it away?" Desisto said. "We haven't seen it yet. What we're seeing now is more of a shift to how do we make [on-demand CRM] work alongside something we have in place."
Meanwhile, the application from PeopleSoft, which was also bought by Oracle, remains in Gartner's niche player quadrant, as does Oracle's own SFA tool. Oracle has promised to make Siebel the basis of its CRM product moving forward while bringing together the functionality of all its acquisitions under Fusion.
The Magic Quadrant takes into account a vendor's functionality, presence in the market, sales execution, customer experience, and market and product strategy. Onyx Software Corp., a longtime player in the market, was not included because of the uncertainty surrounding its takeover. Both M2M Holdings and CDC Software Corp. are attempting to buy the company. In addition, Infor's purchase of SSA Global Technologies Inc., which itself had acquired the SFA technology from Epiphany, was not included because – according to Gartner -- its direction in the market was unclear.