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Is there a war between the top CRM platform vendors Salesforce, Microsoft, SAP and Oracle? Are the big four CRM...
vendors in a deathmatch throwdown to win over your CRM budget? Yes and no.
The aforementioned top CRM platforms have emerged as the dominant players in the CRM space. They have all developed sophisticated capabilities and ecosystems capable of meeting modern enterprise needs.
Each vendor has worked hard to open up their platforms via APIs or middleware for customers to mix and match their applications and services, with hopes and dreams of converting them into full-time customers across more products.
But that's easier said than done, as each of the big four has built its CRM business and related offerings on its core strengths, with corresponding tools and integration to take advantage of CRM data. Or, in other words, if your IT house is built on Oracle, you're likely to use Oracle CRM. The same goes for Microsoft and SAP. Salesforce, however, seems to be the beneficiary of mixed platform environments, cross-pollinating with many other back-end systems.
Salesforce built upon its initial core of sales force automation (SFA). Microsoft built upon its domination of the PC operating system and productivity tool set. SAP extended beyond its core strength in ERP. Oracle's database is its foundation -- managing the system of record.
The cloud is the new battleground for the CRM budget
According to Gartner, worldwide spending on CRM software totaled $26.3 billion in 2015, dominated by Salesforce ($5.17 billion), SAP ($2.68 billion), Oracle ($2.04 billion) and Microsoft ($1.14 billion). Most of this expansion came from cloud services, as more and more companies move away from supporting on-premises IT infrastructures.
Salesforce's strength has been in building a base at the department level, as well as a migration path for the enterprise. The other vendors have built on their base of enterprise-wide offerings and offered tools for improving the use of CRM data.
Salesforce has clearly adopted a wide and enthusiastic user base as a key part of its strategy. One metric of this success could be observed in user conference attendance. Over 171,000 people attended Salesforce's last Dreamforce conference.
The other vendors have a bigger attraction from management and development. About 60,000 attended the last Oracle OpenWorld conference, and 20,000 attended SAP's last annual Sapphire Now conference. Only 6,000 people attended Microsoft's last Envision conference dedicated to CRM. But, on the other hand, Microsoft has about 3.1 million Visual Studio developers.
Understand the dominant CRM use cases
When debating where to spend CRM budget, it is important to understand that CRM technologies support four key enterprise capabilities: SFA, customer service and support, digital commerce and marketing automation. Salesforce, SAP, Oracle and Microsoft are rapidly building a portfolio of CRM-related offerings to address these areas through internal development, acquisition and integration.
SFA applications improve the workflow supporting the sales process, including account, contact and opportunity management; forecasting; and reporting.
Customer service and support capabilities make it easier for customer representatives to engage with customers through multiple channels in a coherent way, which requires case management and problem resolution services. Digital commerce platforms leverage CRM data to unify the customer experience when buying products and services on the web, purchasing mobile apps, and shopping in stores.
CRM data can be used to improve digital marketing efforts via marketing data management platforms. But this kind of integration must be done via opt-in methods that respect the privacy of end customers. Integration with other CRM-related capabilities is not as straightforward as with sales, service and commerce.
Salesforce extends its sales strength
Salesforce has built a very successful CRM ecosystem on top of SFA with the Sales Cloud. It also offers several add-on products for configure price quote, lead management and digital commerce. Its new Lightning tool set also promises to reduce the burden of developing new enterprise apps with a GUI that makes it easier for sales executives to customize their own workflows.
The Salesforce Service Cloud has made the company a dominant player in the service market. However, it has lagged behind its competitors with complex services that require strong business process management (BPM) capabilities. Businesses are drawn to Salesforce's rich integration with analytics, marketing and the internet of things. However, its cloud-only model can create integration challenges with legacy systems used for interactive voice response, billing and procurement.
Salesforce's digital commerce strategy is to build on its acquisition of Demandware, which has become the Salesforce Commerce Cloud. It supports strong vertical markets and includes point-of-sale integration and tools for email marketing and product recommendation. Enterprises should be aware that Commerce Cloud is sold using a revenue share pricing model, which can make it challenging to compare against other SaaS pricing models.
The Salesforce Marketing Cloud has been enhanced with the acquisition of Krux, a leading data management platform vendor, as well as the development of its Einstein AI platform for analytics. This offering targets both B2B and B2C needs within the enterprise.
SAP extends its lead in ERP
SAP is targeting the cloud with a variety of flavors of its Hybris platform for different domains, including Hybris Sales Cloud for sales, Hybris Service Cloud for customer support, Hybris Commerce for digital commerce and Hybris Marketing for marketing. These build on the success of its ERP offering and strong support for BPM, which make it an attractive choice for process-intensive industries, including banking, telecommunications and medicine.
The recent acquisition of Abakus brought additional measurement and campaign management capabilities to SAP's marketing platform. This complements Hybris Commerce's capabilities for advertising management, content tracking and site personalization.
SAP has also launched a novel microservices-based architecture called SAP Hybris as a service. It's still in its early phases, but in the long run, it promises to make it easier for enterprises to build new capabilities with a lightweight footprint.
Oracle builds upon the system of record
Oracle has a long history of helping midsize to large industries maintain a robust system of record. It has been extending this dominance into the cloud as part of its Customer Experience Cloud suite. This includes Sales Cloud for B2B and B2C sales processes, Service Cloud for customer service, Commerce Cloud for digital commerce and Marketing Cloud for campaign management.
These tools build upon many from Oracle's recent acquisitions, including campaign management tools from Responsys and Eloqua, and offline data integration capabilities from Datalogix. Oracle also recently acquired NetSuite, which brought with it an entirely new CRM/ERP infrastructure targeted at small to midsize business needs.
Microsoft expands office productivity lead into CRM
Microsoft is building on its base as the dominant operating system and office productivity suite in the enterprise. This dominance has attracted a substantial base of enterprise developers. It has made it easy for enterprises to customize their CRM offerings using Java, .NET and HTML, and to integrate new CRM-related features with its existing productivity and business software, such as Outlook, Office and Exchange.
Microsoft's Dynamics CRM family of tools builds on this base with a rich set of modules for SFA, customer service, marketing and commerce. Other modules, like Dynamics AX and Dynamics NAV, support Distributed Order Management. Microsoft's recent acquisition of Parature added a variety of new customer service features to Dynamics CRM, including live chat, co-browsing and knowledge management.
Putting the pieces together
When considering where to spend CRM budget, a robust CRM strategy that addresses the core capabilities in sales, support, marketing and commerce will require the integration of a variety of services and internal applications.
Although these top CRM platforms may offer this full spectrum of CRM-related capabilities, many were built from acquisitions that have not necessarily been well-integrated into their core infrastructure. Integration is one of the most challenging components of building out a robust CRM strategy, and it's important for your enterprise architect to evaluate the success of others in the industry when deciding where to spend CRM budget.
Rather than focusing on a specific CRM system, enterprises should focus on which offerings are better able to meet their unique business requirements in the most cost-effective and productive manner. Adopting a complete set of tools from one lead vendor should be weighed against the advantages of integrating multiple capabilities.
Initial pricing should be taken as a starting point. Each vendor's core offerings include basic capabilities, but other costs will be involved for customization, special integrations and management. Enterprises also need to evaluate the cost for various add-on capabilities, such as mobile, offline access, knowledge bases and storage costs, when considering a platform's overall costs.
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