"What we're seeing is the tornado of the "traditional" CRM space morphing into the tornado of the customer-facing, Web-enabled, e-commerce-based CRM tornado."
Man I agree! It does get confusing when one tornado so quickly follows another! For sure I agree that the CRM space (as in almost all apps now days) we are seeing the tornado of web etc.. changing our landscape as we speak (type! <g>). And for us in the CRM field - being just about the newest kid on the app block - this tornado is coming just after our last one just tossed us out onto Main Street! It gets dog-gone hard to tell where one starts and the other has left off! Pretty cool to have two tornados in a row though eh? <vbg>
My utter sense of it though is that "traditional" CRM - especially the customer service side of the equation (i.e. help and support desk, repair center and field service) HAVE moved into main street and Siebel is branching these apps out into the niches (e.g. government service through their partnership with AMS etc..) in search of additional revenue and the "variation phase" that Moore discusses on page 37 (TRFM)
In addition Siebel has gained total market acceptance and assimilation is moving ahead rapidly. For witness of that it is quite interesting to note the number of vendors who have signed up to partner with Siebel in the last 3 months and then compare that list to Remedy or Clarify. During this time Siebel increased the number of their partners from 352 to over 500 - in one quarter! Total domination by Siebel. The value chain is formed and entrenched and whoever was hedging their bets Q3 saw the light Q4 and jumped onto Siebel's ship!
Competition? The primary competitors, in the traditional CRM tornado market (not the new e-commerce one!), have all sold out, bailed out, or scrambled for a niche to hide in.
Siebel is clearly going after margin share now as well. Margins have increased from 10.7% in 98', to 15.4% in 99', to Q4's 16.8%. Hardly margin share in CREE's territory <g> but not bad and increasing.
Also, in true Main Street fashion Siebel is going after service revenue right now. According to Moore when companies move onto Main Street they begin to go after service revenue in a 'big way' (p. 44-46 TRFM). Now I find this a bit of a misnomer.. i.e. going after margin share = going after service revenue because service revenue margins are lower than software license revenue ... IMOH -companies (I only can speak to software) go after service revenue when they begin to get a handle on their license revenue. I.E. They are not running around like crazy just trying to sell everything, and everybody that swamps their radar screen. Using Moore's terminology.. "supply finally starts to catch up with demand" - again - true main street qualities. Companies go after license revenue at this juncture because they don't want to leave any lucrative vein of revenue untapped. And they finally have enough time and manpower to go after it now.. So I wouldn't quite call it "increasing margin share" as Moore does but more like.. 'Hey let's not leave any meaningful money on the table!'.
Anyway (!) Siebel is definitely going after the service revenue now. I've heard service revenue was up +150% Q4 (I have not checked this). In addition they are endeavoring to enhance this revenue area through purchases of several service companies (e.g. OnTarget).
It is confusing though. All of these tornados one after another! My take - to sum up - is this. The customer service side of CRM is on main street now. I don't know enough about the marketing/sales side of Siebel's CRM package to say that with as much confidence - although that IS where Siebel came from originally so one would think they would be stronger there than the CS side of things!
I, like you, believe that we are at the doorstep of another tornado - that being the internet and e-commerce. I am very excited about how Siebel is positioning their Gorilla CRM power into this new arena. And it appears they are branching out - our perhaps redefining (!) - what "forward facing" CRM is <g>
However (!) we define Siebel's 'traditional' CRM - be it tornado or newly acquired main street. It is clear that Siebel 'is it'. As Moore so eloquently states..
"Marketplace power is fundamentally a function of market share." "The power relationships that will govern the category for the entirety of its Main Street market phase are established during the tornado phase - PERMANENTLY"
With Siebel's market share now far, far beyond their two or three closest rivals - put together... well.. Long hail Gorilla Siebel! They didn't have the best CRM package - but they put it all together first - and beat everyone else's pants off through marketing and sales. What else would one expect from someone tutored by the "dark prince" himself and the Oracle 'borg' <vbg>! |
