It's the year of the upgrade.
That's the conclusion drawn from Meta Group's annual Metaspectrum report. The report examines the CRM application suite market and evaluates the leading products and vendors.
Liz Roche, vice president of technology and research services at Meta, identified three reasons companies are now looking to upgrade their CRM systems:
- There has been an uptick in the economy and companies are more willing to make to the expenditure
- CRM vendors have made a major architectural shift and are cutting back on support for older versions
- Organizations that have waited to upgrade for a year or two now see such a difference in functionality they're ready to make the leap. Aging legacy applications will also motivate organizations to upgrade to the newly architected CRM systems, Roche said.
For the third year in a row, the report names San Mateo, Calif.'s Siebel Systems Inc. as the market leader. Pleasanton, Calif.'s PeopleSoft Inc. and Germany's SAP AG rank as challengers, Roche said.
In an example of the focus on upgrades, PeopleSoft recently announced its NOW Upgrade Incentive Program. The program offers a free technical upgrade, application management services for one quarter, free access to PeopleSoft's Passport educational content and $100,000 credit toward new software license purchases greater than $200,000.
In addition to upgrades, users and vendors will also focus on realigning CRM initiatives with businesses practices this year. Organizations haven't realized the full value they thought they were getting from their CRM systems, Roche said. The No. 1 reason for these CRM failures is that businesses have not taken the time to create a CRM strategy, including what customer-facing processes will look like. In short, there is no silver bullet. It's a refrain that's been increasingly repeated in recent years, but people now seem to be listening.
"We're starting to see the vendors themselves recognize they're going to become a scapegoat even when it's not the tech that's a problem," Roche said.
There is perhaps no better example than PeopleSoft's recently announced Customer Success Program.
This program provides free consultation services at the beginning of an implementation to help foster success. Siebel Systems has been running a similar program for its larger customers called the CRM Strategy Team.
The Metaspectrum also ranked CRM applications from Kana Inc., Amdocs, E.piphany Inc., Onyx Software Corp., Oracle Corp. and Pivotal Corp. Meta did not evaluate hosted vendors or vendors aimed at the small and medium business market. The vendors were measured on their vision/strategy, mind share, investment strategy, features and functions, and vertical coverage.
In previous reports, PeopleSoft had been identified as the only challenger to Siebel, but is now joined by SAP.
"Our thinking is that the historical tipping point for CRM has been around two strong players," Roche said. "Now, if the Oracle-PeopleSoft deal does go through, the CRM market will still be in a comfort zone with two."