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Who cares which vendor is CRM's top dog?

An analyst report forecasts some CRM market share movement. That may be significant to the vendors, but does it matter to anyone else?

When a recent report from Boston-based AMR Research Inc. predicted that Germany's SAP AG will overtake Siebel Systems Inc. as CRM's top revenue dog in the next year, the responses, quite predictably, were varied. -

"It reaffirms our direction in terms of evolving CRM at a business-process level," said John Grozier, SAP's vice president of product marketing. "Also, our customers and prospects benefit because that revenue translates into investment in the product. We'll be able to invest at a rate that will be greater than our competitors."

Siebel is quick to point out that other analysts have reached different market share conclusions and questions whether SAP is counting CRM revenue for software that's going unused.

As long as a company has a place in the market, [market share] basically means zippo.
Chris Selland, Aberdeen's vice president of sell-side research,

"The criteria by which people judge their vendors is the experience that the vendor has implementing the software and deployment sizes," said Jeff Scheel, vice president and general manager for Siebel's CRM products. "From a customer perspective, revenue is interesting. But it's less interesting as an evaluation criterion. They want to know 'where can I see [the software] running and how many customers have it up and running in a company like mine?'"

PeopleSoft Inc., in Pleasanton, Calif., doesn't see a whole lot of value in being No. 1 in CRM revenue either.

"Who made the most money or took the most money from customers isn't the most relevant piece of information," said Steve Roop, PeopleSoft's vice president of CRM product marketing. "We're in the top three and that's where you've got to be. The market is consolidating and reaching the maturity point."

At least one Siebel customer isn't ignoring the market share battle, however.

"It's something we're keeping a close eye on," said Todd Renaud, assistant vice president of management information systems for Security Service Federal Credit Union in San Antonio. "But I've been in the industry a long time. Revenues change, maybe because leadership changes. It doesn't necessarily say how the company is going to be doing in a few years."

Siebel's leadership has changed. In May, its founder and CEO Tom Siebel stepped down and Mike Lawrie, a former IBM sales chief, took his place.

While the AMR report predicts an increase in spending on CRM technology, it said that the market remains competitive. Chris Selland, vice president of sell-side research at Boston-based Aberdeen Group Inc., said that being No 1. or No. 2 in revenue has little interest to customers.

"As long as a company has a place in the market, [market share] basically means zippo," Selland said.

The numbers do reveal that SAP has been able to sell its CRM application into its back-office install base, an area where Siebel has traditionally fared well.

Both Siebel's Scheel and SAP's Grozier do agree on something. Not surprisingly, they both feel that organizations are now looking for a broad range of capabilities from fewer vendors.

"The competitive dynamic has obviously shifted from lots of niche players being purchased and knit together," Scheel said. "There was a time people were happy to buy 10 or 12 e-commerce, self-service and CRM apps and pay integration systems houses to weave it together."


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