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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: ynot who wrote (6025)	6/12/2002 2:15:33 PM
From: JakeStraw	Respond to of 6974

Vendors Target Mid-Market as CRM Consolidation Looms Wed Jun 12, 1:31 PM ET Erika Morphy, www.CRMDaily.com story.news.yahoo.com Small and mid-size enterprises (SMEs) traditionally have been an engine of economic growth in the United States. However, until recently, the CRM industry has not targeted that market. Simply put, vendors of ERP, CRM, supply chain and other such applications have spent relatively few resources developing and marketing applications for the small and mid-size sector. Yet that is set to change now that it has become clear that the small and mid-size space will likely be the fastest growing segment in an overall stagnant CRM market. "We think the mid-market is under-penetrated," Gartner ( NYSE: IT) analyst Joe Outlaw told CRMDaily.com. "Right now, only 20 percent of these companies have implemented some sort of CRM system. When the economy picks up and mid-sized companies get their IT budgets back, we think CRM will be one of their priorities." Recognizing the opportunity, several CRM vendors are positioning themselves for shift. New Choices The result for SMEs will be an unprecedented range of CRM choices. Some companies are already offering strong applications for the SME space -- Epicor, Front-Range Solutions and SalesLogix to name just a few. Now, such mid-market companies as Onyx and Pivotal, are realigning their technology to suit the needs of smaller companies, and large ERP vendors, such as SAP ( NYSE: SAP), are moving downstream to serve the market. Even Microsoft ( Nasdaq: MSFT) has plans to roll out a CRM application for SMEs later this year. However, Outlaw is not certain all of the entrants will remain in the space at the end of the day. "Yes, there will be some consolidation -- at least 25 to 30 percent of existing competitors will merge or go by the wayside by 2003," he said. Shifting Tides The consolidation will not come because SAP, Siebel (Nasdaq: SEBL) and Microsoft are focusing their formidable resources on the SME market. According to Outlaw, it is a more fundamental issue: A lot of vendors do not understand the needs of small and mid-size businesses, which cannot be met simply by scaling down an enterprise CRM app. Thus, their efforts in the space may not yield results. Bottom-Line Impact Yet it does appear as though vendors are trying to grasp SME requirements. For example, many of these vendors are adopting Microsoft's .NET technology because most SMEs tend to be Microsoft-centric. Many mid-size vendors have proclaimed plans to develop around .NET servers and the .NET framework. "The general direction is to make the architecture and products more interoperable and less expensive to create and maintain," said Outlaw. He concludes that the most attractive feature of CRM offerings for small and mid-size companies will be lower costs.