Amberdeen Group:
SalesLogix Corporation
8800 North Gainey Center Drive
Suite 200
Scottsdale, AZ 85258
602-368-3700
Market Position
A leading supplier of integrated customer interaction software (CIS), SalesLogix addresses the unique needs of mid-sized organizations by delivering application software specifically designed for implementations ranging in size from 15 to several hundred individuals. SalesLogix has quickly become a major force in the CIS market through a combination of end-user focused technology, attractive price point, and an extensive infrastructure of resellers and systems integrators. And with the December 1997 acquisition of Opis Corporation - a supplier of advanced customer service/support applications - SalesLogix is now able to offer a CIS solution that covers the entire customer/prospect life cycle. Aberdeen believes SalesLogix will meet with continued success in 1998 for the following reasons:
Focus on an untapped market segment. A vacuum exists in terms of price and functionality between enterprise-class CIS solutions for the Fortune 1000 and point products for individuals and small businesses. Mid-size companies with revenues of $20 million to $500 million are looking for a robust CIS solution that does not require a commitment of
hundreds of thousands or millions of dollars. SalesLogix meets this need, opening up an exciting market potential.
Targeting the concerns of end-users. Most CIS initiatives follow a top-down model, with sales professionals and support personnel forced to use software that is primarily geared for senior management. Project failure is often inevitable as end-users reject software that does not meet their needs. SalesLogix addresses the concerns of the sales professional and support representative - not just in terms of application functionality, but also with its marketing messages and value proposition.
Distribution channels designed for fast market acceptance. SalesLogix makes extensive use of value-added reseller partners. To date, the company has trained and certified over 200 reseller partners. By leveraging this resource, the company can expand its market presence while ensuring that customers have access to the professional services essential for successful CIS deployments. Additionally, this channel provides an economical means to combine application software and systems integration services for mid-size user organizations. Indirect sales gives SalesLogix the resources it needs for continued rapid sales growth.
Attractive price point. At about $700 per seat for its sales force automation (SFA) software and $1,000 to $1,200 for its customer support application, SalesLogix is significantly less than high-end CIS products, making it attractive to cost conscious buyers.
Implementation strategy. Rather than wait six months before rolling a system out to end-users, SalesLogix believes in rapidly deploying an initial system quickly and then customizing it as users become more aware of its real capabilities and advantages. This strategy tends to shorten pay back time frames and increase end-user acceptance of SFA.
Additionally, SalesLogix has a management team with extensive experience and market credibility. These factors have resulted in over 400 SalesLogix customers in multiple industries, including computer and software technology, banking and financial services, telecommunications, manufacturing and transportation.
Integrated CIS for Mid-size Firms Must Come from a Single Supplier
Aberdeen has noted that the implementation of integrated CIS (integrating multiple applications such as sales force automation, customer support and field service management into a single cohesive system) has accelerated dramatically over the last 6-12 months. Users realized competitive advantage by sharing critical customer information and business processes across the enterprise so that every employee can service, support and sell to clients and prospects more effectively.
While integrated CIS reaches across all industries, Aberdeen research shows that the way these applications are purchased and implemented varies according to the size of the user organization. Most Fortune 1000 firms have extensive internal information systems (IS) resources and/or work closely with large systems integrators. These firms typically combine heterogeneous point products from multiple suppliers on a customized basis. However, this approach is typically not viable for most mid-sized firms. They do not have the resources to integrate multiple third-party products. These firms are more likely to purchase all core CIS applications from a single software vendor. Thus, the ability to provide a single suite of integrated CIS applications is vital to the long-term viability of software suppliers in this market segment. It is for this reason that Aberdeen is so encouraged by SalesLogix's recent acquisition of Opis.
The Sales Information System
The SalesLogix Sales Information System is a true client-server, multiuser solution that contains the critical functionality required of a robust SFA solution, including:
Lead, contact, account, and opportunity management;
Group calendar and scheduling;
Embedded word processing and Internet-based email;
Sales encyclopedia;
Sales forecasting and reporting;
Automated sales processes;
Scalability and remote data synchronization; and,
Rich and rapid customization facilities.
The ability to simultaneously track leads, contacts, accounts, and opportunities is beyond simple contact managers, as is the fact that SalesLogix's is intended for multiuser deployments. These benefits are not lost on current users of contact managers looking for a more powerful solution. Sales management will be interested in the ability to track and forecast sales performance across the entire organization.
SalesLogix provides remote database connectivity and field-level synchronization, enabling individuals in the field to quickly and easily share information with those at the home office. The company also has field-level security, giving sales people access to the information they need while ensuring the integrity of sensitive data.
A major advantage of SalesLogix is that it gives equal weight to the needs of sales management and sales professionals. Understanding the importance of ease-of-use, the company has architected its solution so that it behaves in a fashion that is natural to existing ACT! users, assuring adoption by those members of the sales force already familiar with the popular contact manager. In fact, SalesLogix's CEO, Pat Sullivan is the original inventor of ACT!. As a result, SalesLogix is able to draw upon a base of over 1.5 million loyal ACT! users.
SalesLogix allows existing ACT! and Goldmine users to import existing contact information into its solution - preserving the investment in time these individuals have made entering valuable customer data. Data migration can be accomplished in a few minutes using SalesLogix's import maps. Users can also build links to other legacy systems on an as-needed basis. Thus, end-users can begin using SalesLogix in the same fashion as their contact manager, progressively making use of its more advanced, true SFA capabilities as they become more familiar with the system.
The impact of these design choices from an end-user acceptance perspective is significant. Sales professionals who already use ACT! or Goldmine are assured their investments in personal repositories of sales information will be maintained. These individuals will quickly see the advantages of SalesLogix - making them internal champions for the new system. Because SalesLogix appeals to the sales professional as well as sales management and IS professionals, it is more likely to gain grassroots support in the sales force and be successfully adopted.
Pricing is an important market differentiator for SalesLogix. Contact managers are usually under $200 per seat, while high-end SFA applications often exceed $5,000 per seat. A SalesLogix Starter Pack is $9,995 and includes ten Client licenses, one Workgroup Server license, and an unlimited synchronization server license for managing and communicating with multiple remote users. Additional Client licenses are $695 and a Remote Office Server is $995. With volume discounts applied, the average cost per user is $500 - $600, significantly less than most other SFA solutions available today.
The SalesLogix Sales Information System runs on Windows 95 and Windows NT clients, as well as Windows NT server platforms. Databases currently supported include Interbase, Microsoft SQL Server and Oracle. Finally, SalesLogix has designed its solution to take advantage of Microsoft's BackOffice.
Opis Rounds Out the SalesLogix Portfolio
In early 1997, SalesLogix entered the sales automation market with the introduction of the SalesLogix Sales Information System. Recognizing the desire of its client base to purchase integrated sales and support applications from a single supplier, SalesLogix acquired Opis Corporation in December 1997. Opis is a prominent supplier of external customer service/support applications. The Opis product line nicely complements the existing SalesLogix product portfolio from an application, development tool and technology perspective. Like SalesLogix, Opis also focuses on meeting the requirements of mid-sized organizations.
Opis' flagship product, SupportExpress, is a complete customer support solution that enables organizations to quickly and effectively resolve problems and requests for external customers. In April 1998, SupportExpress will be renamed to SupportLogix. Like SalesLogix, it has been designed to be easy to install and maintain. SupportExpress/SupportLogix includes facilities for problem/request logging, tracking, escalation and resolution. It also provides RMA (return materials authorization) functionality as well as support contract and customer inventory management. Other features include:
Defect Management Module - This module facilitates product change management by tracking and managing product defects and feature
requests.
Web Link - This module provides access to SupportExpress from any standard browser.
Mail Link - Enables customers and support representatives to access SupportExpress via email.
Telephony Link - Telephony Link integrates SupportExpress with the telephone network for true computer-telephony integration functionality.
Remote Control Link - This lets support professionals view and operate remote PCs to solve problems and issues faster.
SupportExpress features a case-based retrieval tool for searching product knowledgebases as well as third-party knowledgebases.
Adding to the pure product synergy between SalesLogix and Opis is the fact that both product sets have been written using the same development toolset, Borland's Delphi. This has greatly facilitated SalesLogix's task of integrating the two product sets. A link between the two products is expected to be available by Q1, 1998, with complete integration by Q3, 1998. To facilitate this task, the Opis team is relocating to Scottsdale.
Organizational Structure
Headquartered in Scottsdale, Arizona, SalesLogix currently has 96 employees and has received $11 million in venture capital investment. Members of the management team include:
Pat Sullivan, President and CEO (formerly co-founder of Contact Software);
Douglas Nicholas, Vice President of Business Development (formerly founder and CEO of Opis);
Sunil Padiyar, Vice President, Engineering (formerly of Novell and Artisoft);
Kevin Carson, Vice President of Implementation (formerly of Sales Automation, Inc.);
Greg Head, Vice President of Marketing (formerly of Contact Software and Symantec);
Dan Nichter, Vice President of Sales (formerly of Contact Software and Saber Software);
Gary Acord, CFO (formerly of Artisoft and Partner with KPMG Peat Marwick);
Mike Goode, Vice President of Strategic Accounts (formerly of Maximizer Technologies and Contact Software).
Sales and Marketing Strategy
SalesLogix has aggressively built a network of sales automation value-added resellers (VARs) and consultants - collectively called SalesLogix Business Partners. The company believes that the best way to maximize market coverage while minimizing costs is to combine a dedicated internal telemarketing/telesales organization with indirect channels. This strategy is designed to reach hundreds or thousands of potential customers at an affordable price, rather than the handful that can be targeted with a direct sales force.
SalesLogix has an internal staff that responds to prospect inquiries and distributes qualified leads to Business Partners. SalesLogix's own field sales force is chartered with recruiting new Business Partners, supporting Business Partners - particularly with large deals, and participating in trade shows. All Business Partners go through training and certification. To date, over 200 firms have been certified.
Finally, the company provides free single-user licenses of its software to build market momentum. This program has met with encouraging initial success and Aberdeen believes it will make SalesLogix very popular with companies new to SFA.
Conclusions
Aberdeen is highly impressed with SalesLogix and believes the company is quickly becoming a major force in the CIS market. The acquisition of Opis enables SalesLogix to deliver a complete, integrated CIS solution to its clients. Most encouraging about the acquisition is the close alignment of both companies' software application products, baseline technologies, and target markets.
Aberdeen believes that the adoption of CIS by mid-size user organizations will accelerate dramatically in 1998, and that SalesLogix is well-positioned to capitalize on this trend. SalesLogix can deliver an integrated solution at the right price point to the mid-size market. The company's success in building an extensive distribution channel further increases its advantage over rivals. Finally, by designing applications that appeal to sales professionals and support individuals - not just senior management - SalesLogix has created a solution that is not only good on paper, but also succeeds when it is implemented. As a result, Aberdeen believes 1998 will be a year of rapid market acceptance and growth for SalesLogix.
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