Introduction to SaaS and on-demand CRM
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SaaS and CRM on demand vendor guide
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|SaaS and CRM on demand vendor guide|
Software as a Service (SaaS) CRM started with smaller software companies that designed their on-demand products for small and medium-sized businesses (SMBs). That's changed as software giants Microsoft and Oracle Corp. move into the SaaS market. Use this SaaS and CRM on demand vendor guide to get an overview of the on-demand and Web-based CRM applications on the market today. Usability has been a major point of emphasis for CRM vendors in recent months.
The SaaS CRM market has become crowded in the past few years, with traditional CRM vendors throwing their hats into the on-demand ring. Competition has become more fierce, and upstart SaaS rivals Salesforce.com Inc., NetSuite Inc. and even Microsoft are giving long-time leaders Oracle and SAP AG competition in the CRM realm. Get the lowdown on the state of the SaaS CRM industry and the major players involved.
Microsoft moves into on-demand CRM
In early 2007, Microsoft previewed its first multi-tenant version of CRM, which allows users to benefit from economies of scale, with multiple customers running on the same instance of the CRM product. Previously, the software company had offered hosted versions of Dynamics CRM through its partners.
In summer 2007, Microsoft announced pricing for on-demand Dynamics Live CRM, offering pricing in multiple tiers, the most expensive of which beats Salesforce.com's cheapest rate of $65 per user per month.
Microsoft's Dynamics CRM 4.0 came out at the end of 2007 and Microsoft CRM Online was released in April 2008. Two versions, Professional and Professional Plus, were made available. According to one expert, the advantages of Microsoft CRM Online include:
Microsoft All-in-One Guide for more details on Microsoft's SaaS and on-demand strategy.
Read more in this special report on Microsoft Dynamics CRM 4.0.
Oracle and Siebel's on-demand CRM offerings
Oracle released the latest version of Siebel CRM On Demand in summer 2007. It was the 14th release of the multi-tenant SaaS application that Oracle acquired as part of its Siebel purchase.
As with Oracle's new premise-based application, Siebel 8.0, advances in Siebel CRM On Demand focus on usability. Adding Web 2.0 technology made user tasks simpler and navigation, mouse clicks and page refreshes fewer, according to Oracle. The new release also featured customization capabilities to allow businesses to tailor the application to their processes, embed best practices, streamline data entry and configure different layouts for different types of records.
Before the release, many wondered what Oracle's plans were for Siebel CRM On Demand. Oracle acquired Telephony@Work, a provider of IP-based software for hosted contact centers, in mid-2006. The acquisition extended its reach into on-demand CRM, following the Siebel purchase. Siebel had previously acquired Ineto in 2004, and launched Contact On Demand, its hosted customer service application. Telephony@Work was already the underlying telephony platform for Siebel's Contact On Demand application and -- over time and phased release cycles -- Oracle said it planned to capitalize on the platform across its Oracle, Siebel and PeopleSoft CRM applications.
Experience Oracle's Siebel OnDemand user and Siebel 8 interfaces firsthand in our software demonstration screencasts.
Find out more about
Oracle's release of the latest version of Siebel CRM On Demand
SAP arrives late to the SaaS party
SAP moved into SaaS CRM territory in early 2006, releasing first SAP Sales On-Demand and then adding marketing features with its Marketing On-Demand. In fall 2006, SAP released its customer service on-demand functionality to add to the CRM On-Demand suite.
SAP was likely responding to pressure from Salesforce.com when it decided to create SaaS CRM products. SAP's on-demand and on-premise applications share a code base. According to the news story, "SAP CRM On-Demand is aimed at the software vendor's largest customers." The product incorporated some vertical specifications, appealing especially to manufacturing-centric companies.
Pricing for SAP's on-demand CRM software appeared simple, but according to a SearchSAP.com news story, "integrating it with back-end systems and mapping data to the on-demand platform will result in additional costs to many firms."
SearchCRM.com SAP expert Srini Katta said he thinks SAP will eventually gain traction in the SaaS market. He told a reader shortly after the SaaS release that "[SAP] Service on demand is a light service application and has yet to prove that it has the deep benefits of an on-premise service application."
SAP also talked up plans to expand beyond CRM in the on-demand market, transforming its midmarket software into what could become an on-demand ERP offering.
Before launching its SaaS product, SAP acknowledged difficulties with companies using all their SAP CRM licenses.
SAP CRM version 2006s in this screencast
Find out about DuPont Chemical Co.'s early embrace of SAP's SaaS application.
Salesforce.com premieres SaaS model; moves beyond CRM
Salesforce.com was the pioneer in the SaaS market that forced big CRM vendors to rethink their approach. However, Salesforce.com has targeted primarily SMBs since its inception.
In mid-2005, Salesforce.com announced its largest deal, with 5,000 seats at Merrill Lynch.
Later in 2005, the company previewed Salesforce Sandbox, its hosted testing and training application that was available with the company's winter 2006 release.
This release allowed customers a replica of their existing deployments to conduct training on any of the hosted applications from AppExchange, Salesforce's online application directory. AppExchange's applications use Salesforce.com's proprietary programming language, Apex, as their on-demand platform.
In late 2006, Salesforce.com planned an online marketing and billing service for companies that develop on-demand applications that complement its core CRM product. At that time, Salesforce.com boasted a 27,000-member customer base and offered more than 400 applications on its AppExchange.
In spring 2007, Salesforce.com acquired one of these AppExchange partners as part of a move beyond CRM into the on-demand content management field. It planned to release a new application, called ContentExchange, to manage documents and other unstructured content. Salesforce borrowed from Web 2.0 to allow a community of users to organize content, rather than using traditional folders. The company also planned to move toward a full SaaS platform by adding Apex Content, used to build content-based on-demand applications.
NetSuite solely SaaS vendor, competitor of Salesforce.com
SaaS software vendor NetSuite has produced software solely in the on-demand market since its founding. It has also launched products that move beyond just CRM and ERP.
In 2005, with the release of NetFlex, NetSuite started offering customization capabilities to customers while also allowing them to host new applications within the system. This release came shortly after NetSuite's rival, Salesforce.com, announced its Multiforce tool, which serves as an on-demand platform for multiple applications.
NetSuite moved to version 11 of its software in 2006. It released the updated software in phases. Version 11 included a new SuiteScript tool to help companies customize their business processes between the CRM and ERP systems within the on-demand application.
Listen to a podcast with NetSuite CEO Zach Nelson on
CRM and ERP integration.
RightNow fights for market share
RightNow Technologies offers CRM on-demand via the SaaS model, and also offers an on-premise CRM option to customers. In spring 2006, RightNow bought Salesnet Inc. to strengthen its SFA software offering.
Later in 2006, RightNow announced the release of version 8 of its CRM application. The release followed a $25 million investment and two years of engineering. RightNow's product drew from its core strength in customer service to extend customer focus throughout an organization. According to a SearchCRM.com news story, version 8 featured a "Customer Experience Designer that lets users design business processes around the customer via a modular workflow engine and a drag-and-drop design tool."
RightNow went public in summer 2004.