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SaaS CRM software takes vertical approach

RightNow and Salesforce.com have both released vertical versions of CRM recently. On-demand is catching up with on-premise, but both have a long way to go.

Like traditional CRM vendors before them, Software as a Service (SaaS) companies are going vertical with their applications.

Last week, Bozeman, Mont.-based RightNow Technologies Inc. released a higher-education version of its CRM software, the first of what it says will be many vertical editions. That came on the heels of last month's release of San Francisco-based Salesforce.com's own Siebel released vertical editions for Siebel OnDemand for automotive, high tech, insurance and communications and media. Before vertical editions for telecommunications, commercial lending and advertising media in 2004. And San Mateo, Calif.-based NetSuite Inc., starting with what it knows best, For the University of Houston, a vendor's experience with similar customers in higher education is a major attraction.

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The university has been using RightNow's e-service system for about five years with its Ask Shasta program, an online self-help service named for the school mascot. The university was pleased with its performance -- the system helped deflect 90% of emails from current and prospective students within months of its deployment – but it's also looking to other vendors for a full CRM suite. RightNow's higher-education release holds some attraction, but a major PeopleSoft implementation is making the choice more difficult. The main campus is going live with PeopleSoft in July, and Oracle's plans for the product have convinced the university to wait on CRM, according to Jeff Fuller, executive associate director of admissions. According to Julia Kosatka, administrator of Ask Shasta, the university did very little customization of RightNow's e-service application.

"We consider our students our customers," she said. "Calling a student a contact or a customer, that's fine. That follows along with our organizational culture."

However, that's not always the case, according to David Vap, vice president of products for RightNow.

"With Higher Ed, they're looking for CRM applications, but they don't talk about it like that, they talk about recruiting and informing the student base," Vap said. "Our packaging helps connect those dots between sales, service and marketing and what they do on a daily basis."

RightNow will continue to build out on-demand verticals and plans to release versions for government, retail and telecommunications in the second quarter, he said. It's taken a while for RightNow to embark on the vertical path, and for good reason.

"The company has intentionally stayed horizontal since we began," Vap said. "Vertical takes a lot of resources to do right. You can get easily derailed by focusing on verticals too early."

That's a sentiment echoed by Denis Pombriant, managing principal with Stoughton, Mass.-based Beagle Research.

"Vertical functionality matters just as much as in the traditional, on-premise world," Pombriant said. "Somebody has to plant the seeds and build the first few applications. It takes a little priming of the pump and to go from concept to reality."

While the University of Houston has been running e-service for years and takes a CRM approach to its student body, it's still looking for CRM tailored for education.

"Wherever we go with a CRM product, it will be something where we don't have to reinvent the wheel," Kosatka said. "And we'll look at other institutions like us -- we don't want to be the guinea pigs."

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