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Fresh face to appear in small and midsize space

Another player is joining what's quickly becoming a crowded sector for CRM.

For all the talk of market consolidation, some vendors still want in on the CRM action.

The latest company to enter the fray is Technology Integration Group Services Inc., in Bloomfield Hills, Mich. It says its NextSale software manages everything from small sales teams to global organizations with dispersed staff, but company executives compare the technology most closely with that of ACT and Salesforce.com. Not surprisingly, those two companies are leaders in the small business space, according to recent research from Gartner Inc. in Stamford, Conn.

The NextSale SFA software suite, offered in both a hosted and on-premise version, will be generally available in eight to 10 weeks, according to Darrin Hanna, the company's co-founder. Hanna said it will be priced lower than ACT and Salesforce.com, though he declined to offer specific prices.

For more information

Article: Battle for small market looms large

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Although many of NextSale's competitors have been in the market for several years and have established a presence, the company remains optimistic about its new offering.

"The real growth in the economy now is in medium and small-sized firms," said Roger Blackwell, co-developer of the software.

Much of the action in CRM of late has come in the small and medium business (SMB) space.

Since last summer, Intuit, an accounting software maker in Mountain View, Calif., has entered the SMB arena with its new QuickBooks Customer Manager; Sage Group, the U.K. parent company of Best Software Inc., bought ACCPAC International Inc., of Pleasanton, Calif., maker of ACT and SalesLogix; and Microsoft released the first upgrade to its CRM application.

Hanna said there is plenty of room in the SMB space for a new, hosted solution. It's a claim that analysts back. Cambridge, Mass.-based Forrester Research recently surveyed more than 1,000 technology decision makers at SMBs, and 26% said they were purchasing CRM software in the next year. Those businesses, however, tend to pay more attention to Microsoft, according to the report.

Midsized companies that haven't yet invested in CRM, and independent sales groups who want a simple tool are now buying packaged software, said Erin Kinikin, an analyst at Forrester Research, though not the author of the SMB report. Hosted offerings offer CRM quickly without a major IT commitment.

"The days of big, enterprise SFA purchases are over," she said. "NextSale and other hosted sales products appeal to companies with relatively simple sales processes and independent sales users -- regardless of the overall company size. Hosted sales is primarily a state of mind -- do it quick without IT -- rather than a company size or feature set."

Expect to see more entries into the hosted CRM market to address the demands of the SMBs, Kinikin said. She expects another enterprise vendor to follow the lead of enterprise software vendor Siebel Systems Inc. in San Mateo, Calif., and build its own hosted CRM application in the next year.

"Then we'll see a wave of consolidation," Kinikin said. "Ultimately, selling to the midmarket is all about building a sales channel and achieving economies of scale. Just as there are four or five midmarket licensed CRM products that matter today, down from 20 or more a few years ago, we'll go through the same weeding out process with hosted CRM. The survivors will be whichever companies can gain the most traction in the next 12 to 18 months, and keep their customer base happy long enough to renew."

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