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Gartner ranks customer service software

Gartner's Magic Quadrant for CRM Customer Service Contact Centers finds a fragmented marketplace.

Gartner Inc. recently released its Magic Quadrant for CRM Customer Service Contact Centers, but it doesn't offer any easy answers for those struggling to make a customer service technology decision.

The report names Redwood Shores, Calif.-based Oracle's Siebel Systems application as the sole vendor in the leader's quadrant, with Microsoft and San Francisco-based in the visionaries quadrant. The other vendors were all listed as niche players. Gartner places vendors in one of four quadrants -- challengers, leaders, niche players and visionaries -- based on a number of factors, including viability, functionality, market responsiveness, customer support, vision and customer experience.

However, the quadrants only tell a portion of the tale, and that's particularly true of customer service contact center technology as compared to some of the other markets Gartner covers.

"There's more of a fragmentation in the marketplace," said Michael Maoz, distinguished analyst with Gartner and author of the report. "The idea that there's a customer service and support suite, that hasn't panned out. It's too complex an issue the way a business achieves customer service excellence. We're not seeing any one vendor or any one vendor type able to create a full suite."

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Gartner does predict that Microsoft and will be the most influential vendors for customer service applications by 2009, due largely to their large customer base, which uses their applications primarily for salesforce automation (SFA) and hasn't yet expanded into service.

"You can't underestimate Microsoft; they have a global reach," Maoz said. "Microsoft and Dynamics CRM was an underachiever in 2005 and 2006. Now, at the end of 2006 and into 2007 we're seeing resellers looking at the CRM product and saying, 'We can do something with 3.0.' In local areas where you have a reseller they might sell any number of Dynamics products and bring their expertise with SharePoints servers or whatever else they're adding to Dynamics CRM 3.0."

Meanwhile, about 90% of's revenue came from companies using SFA, according to Maoz, which gives it plenty of room to grow within its existing base. It will also benefit as the Software as a Service (SaaS) model sees more adoption with customer service suites. Gartner predicts that by 2013, at least three-quarters of contact centers will use some sort of SaaS application. However, business-to-consumer companies that have high volume and sophisticated process and workflow requirements instead are less likely to use However, some are turning to Bozeman, Mont.'s RightNow Technologies which offers a SaaS option, Maoz said.

In addition to the CRM suite vendors, both on-premise and on-demand, Gartner evaluates myriad other technology vendors that serve the customer service field. These include desktop integration vendors like Jacada and eGlue, which identify data on other existing systems and build processes on top of it; desktop productivity vendors with knowledge management systems like eGain, Inquira and ATG; and business process modeling vendors like Pegasystems and Graham Technology. Then there are industry specialists like Amdocs in telecommunications and Lagan in local government.

"It's really a dog's breakfast," Maoz said. "You have to look carefully at the industry you're in, the complexity of calls and your own IT preferences before you can pull out a Magic Quadrant and say 'They're in the top right.'"

Whatever the system, customer service is a key factor driving CIO decision making in the next two years, according to the report. The fact that it's easier and cheaper to keep existing customers than to win new ones has long been a mantra of CRM. The message seems to be getting through now, however.

"It's taken a while. It takes maybe a Dell who's the king of the mountain failing through rumors of poor customer service," Maoz said. "It's going from lip service to action and that's what we're seeing his year. Now we can actually demonstrate that through share price, through churn, this is the difference between us selling more."

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