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Home > CRM / Call Center News > CRM's new battleground: Niche vs. vertical |
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As the major CRM vendors roll out vertical versions of their applications, niche providers that have always focused on one particular market are making improvements to their software. Which begs the question, if there's already a successful software firm serving your industry, why look to a more horizontal provider? "It's like if you're going to the doctor, would you rather go to specialist or generalist?" said Chris Selland, vice president of sell side research with Boston-based Aberdeen Group.
Take Dendrite International Inc. in Morristown, N.J., which has been making software for the global pharmaceutical market for the past 18 years. Today it announced its new .NET-based framework to simplify integration with other software providers and partners. The integration is billed as a way to give companies a view of the customer from all sides of the pharmaceutical organization: sales and marketing; research and clinical; and finance, said David Escalante, Dendrite's vice president of North American marketing. With a simpler integration platform, Dendrite can capitalize on its pharmaceutical experience and let other providers satisfy other IT needs. Competition between niche vendors and vertical offerings from large providers can get confusing. For example, Dendrite typically faces off with Siebel Systems Inc.'s pharmaceutical-specific CRM software but has found that another CRM competitor, SAP AG, has the biggest market share in pharmaceuticals on the ERP side, Escalante said. That means that vertical providers like Dendrite find themselves doing what many in the software business are doing: cooperating with the competition. In a partnership announced last week, Dendrite said its professional services staff will begin working with mySAP CRM for pharmaceuticals. In some cases, a piecemeal approach to IT works well for Dendrite's new framework. "If a pharmaceutical company has made a commitment to SAP on the financials side and Siebel in the call center, it's likely they're going to take a best-of-breed approach, so our framework is going to be positioned and work with other software providers in our space," Escalante said. "We agree to compete, but that doesn't mean we won't interoperate." The call center is one area of CRM where things are run pretty similarly across industries. Markets usually differ in their sales processes, Selland said. Plenty of vendors are trying to fill that need. Oak Brook, Ill.'s Interface Software Inc. targets professional services firms, and StayinFront Inc., of Fairfield, N.J., tackles consumer goods and pharmaceuticals. ACCPAC International Inc., recently acquired by the parent company of Best Software Inc., is widely known for its presence in telecommunications but is branching out to other industries. While some analysts have predicted the large providers will squeeze out most of the niche vendors, Selland disagreed. "I don't think the Dendrites of the world are going anywhere; I think you'll see more of them," Selland said. In fact, Siebel, which doesn't have the broad portfolio of non-CRM applications that Oracle Corp. and SAP have, may have the most to lose in the fight with niche providers. However, the niche vendors are hampered in how big they can grow, both by the limits of their individual markets and competition from other players. Additionally, the investment community demands the impossible: that a niche software provider develop deep market expertise but also appeal to big markets, Selland said.
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