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Siebel, SAP still top Forrester CRM rankings, but face competition

Once again, SAP and Siebel top the ranks of CRM vendors, but competitors are closing in quickly, meaning that buyers need to be even more careful with purchasing decisions.

The latest CRM software suite rankings from Forrester still show SAP and Oracle-Siebel leading the pack, but the distance is not that great.

In fact, as the CRM market has matured, some of the software products in the market have become very difficult to differentiate, said William Band, principal analyst with the Cambridge, Mass.-based research firm and an author of the report.

"That's the interesting thing about this market," Band said. "At one level, the solutions are very similar. You can say it doesn’t matter, but when you get down to specific use cases, there are differences. If you're a buyer, you still have to do your homework."

According to the report, Oracle's Siebel offering and SAP CRM still have the most complete applications with good usability, but CDC, Microsoft, Oracle's CRM On Demand application, RightNow and are all gaining ground thanks to relatively fast deployment times and ease of use. Meanwhile, the Oracle CRM product that is part of its E-Business Suite (EBS) and its PeopleSoft CRM are good options for customers already running those ERP applications.

Oracle's Siebel application and SAP CRM have traditionally been at the top of most analyst rankings, from the Gartner Magic Quadrant for Customer Service Software to AMR's Customer Management Market report to Forrester's last CRM rankings. Yet this is the first appearance in years by CDC, which acquired Pivotal CRM several years ago, amidst a number of midmarket CRM acquisitions, including Onyx being purchased by M2M (now Consona) and Epiphany's acquisition by SSA Global-Infor. That's partly due to a renewed commitment by CDC to marketing the product, Band said.

"They have a good, solid solution and it stacks up well," he said. "It has some differentiation in having a Microsoft solution with a better user interface than Microsoft’s. I'm just starting to get an inquiry or two about Pivotal, not a big upswing in demand. Consona and Epiphany totally fell off the radar screen."

Meanwhile, Oracle's other CRM products -- meaning those other than Siebel or Oracle CRM OnDemand -- still fared well in the rankings, despite the confusion around Oracle's CRM plans for its Fusion Applications. Fusion Applications, the future of the company's seven-year application acquisition spree, will combine the best features and functionalities from the myriad applications, according to Oracle. Siebel and Oracle CRM OnDemand are expected to be the basis for Oracle CRM moving forward, but Oracle's own homegrown CRM product in EBS still has its place.

"They've focused on their sweet spot, which is still service and field service -- the other guys don't spend much time there," Band said. "For manufacturing-centric Oracle EBS customers, it’s a strong solution. PeopleSoft is in the same boat. They're trying to differentiate. They're strong in the higher ed space. They're picking one strength."


Midmarket CRM rankings similar

Forrester also evaluated the CRM vendor marketplace for midsized organizations, which it defines as companies with less than $1 billion in revenue per year and/or 1,000 employees or fewer. The same companies are leaders, though Siebel and SAP come with higher price tags. Also, vendors like Maximizer, NetSuite, SageCRM, Sage SalesLogix and SugarCRM offer sound solutions best suited for the midmarket, according to the report.


CRM market trends

There is still a healthy market for CRM software. According to a Forrester survey of 455 large organizations, 56% had already implemented a CRM tool, and an additional 17% plan to adopt CRM software in the next 12 to 24 months.

In addition, whether it’s customer analytics, business intelligence, customer intelligence or business analytics, organizations are seeking greater insight from the data they've collected about their customers. Another Forrester survey found that 62% of business and IT professionals at 286 companies have implemented or are expanding their customer business intelligence solutions, according to the report. And customers are seeking those capabilities from all manner of sources -- standalone software vendors, CRM vendors, ERP powerhouses. In 2007, SAP acquired Business Objects and Oracle acquired Hyperion, seeking to provide some supply for the demand for analytics. The CRM vendors are increasingly seeking to add analytics capabilities to their core suites and have created some confusion in the process.

"We have people buying CRM and expecting the analytics to come with it," Band said. "In the case of Oracle or SAP, they bought business intelligence solutions, so customers are looking at the more robust, pure BI plays. Then you have clients using Cognos, SAS and trying to apply BI tools. There's this whole mish–mash, but people are very interested in getting more. It gets very murky when you drill down and the customer is asking for more sophisticated capabilities and the vendor has to offer BOBJ or Hyperion."

Integrating customer data remains a core issue for CRM users, though CRM is no longer seeing the ample marketing and attention it got when it was called customer data integration (CDI).

"I don't get people calling me asking about CDI as a topic, but I do a lot of consulting, and it's always at the core of the problem," Band said. "It's a really important topic, and people are struggling and ask us about it."

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