(COMTEX): SHOPTALK: CRM Is Not Dead
Oct 15, 2002 (NewsFactor.com via COMTEX) -- Siebel's (Nasdaq: SEBL) halo is
losing its sheen for CRM buyers and that is both good and bad news, according to
Joe Davis, vice president and general manager of PeopleSoft (Nasdaq: PSFT) CRM.
On the plus side, he told CRMDaily, it means vendors like PeopleSoft can walk
into a deal and be competitive next to Siebel. "Before, people's attitude was,
'I can't get fired for picking Siebel, so give me a good reason why I should buy
you instead,'" he told CRMDaily.com. Because potential buyers no longer
automatically view Siebel as a safe choice, "it is a much more even horse race."
But the bad news is that because Siebel has been wearing the leadership mantle
for CRM, the marketplace views its current troubles as an indictment of the
industry as a whole. "You don't want to throw the baby out with the bathwater
and claim the market is having problems because [Siebel] is," Davis said.
Cautious Market
The CRM industry was viewed as suspect before Siebel's financial difficulties
ever become apparent, Davis readily acknowledges. "The market has some
weaknesses right now, and there has been a lot of press about whether CRM is a
bad thing or a failure. We say that is not the case at all -- the market is just
much more cautious than it was two or three years ago when people were making
ridiculous purchases without thinking them through."
The CRM market is still there. In fact, he adds, "it is more sound than it was
without all the hype two or three years ago."
Different Take
PeopleSoft is something of a latecomer, having entered the CRM space three years
ago. But in short order it has made rapid strides. CRMDaily spoke with Davis to
get his opinion on which direction the CRM market is going.
Besides the decline of Siebel's prominence, there are a number of other trends
at play among vendors and buyers that promise to reshape the industry.
CRMDaily: What is different about the CRM purchases that are being made today,
compared with a few years ago?
Davis: People are making decisions on smaller deals. Two or three years ago you
saw these large enterprise deals. But the people hadn't thought through
implications of a large CRM purchase. They would make these big enterprise
decisions and then try to do it piece by piece. Today, though, buyers are
saying, 'I want to hear your vision, and want to think about an overall story of
what I want to do with CRM, but I want to do it piecemeal. I want to put in a
call center , I want to get it up and running, nning, prove positive ROI and
prove to my CEO that CRM has positive value -- and then I will take the next
step.'
Buy Now, Strategize Later
I was at the Gartner CRM summit a couple of weeks ago, and during lunch I sat
next to a woman who happened to be the CIO of large Canadian insurance company.
She said she was attending the summit to figure out the company's CRM strategy.
So I asked her if they had made a vendor selection yet, and she said they bought
twenty million dollars in licenses from a vendor two years ago.
The idea that someone would buy [and] then after the fact try to figure out
their CRM strategy is, unfortunately, probably not that uncommon a story. There
is a lot of shelf ware out there. But we are not seeing that buying behavior any
more. Now companies determine their CRM strategy, then select a vendor, then do
a piecemeal approach to get a project up and running.
The ERP Effect
CRMDaily: Do you think the problems CRM has had in the last few years are merely
the result of companies rushing to adopt an emerging technology? Similar to what
happened with ERP in the 1990s?
Davis: Actually, CRM was different because it consists of so many pieces
combined together. Marketing automation, call center tech and SFA were all put
in the same bucket. A similar thing happened to ERP , but ERP is a much more
monolithic application, as opposed to a series of discrete applications that can
stand alone. The idea [that] you have to take all these pieces simultaneously
and implement them to get a 360 [degree] view of customer or to be a
customer-centric organization -- that was unique to CRM, and that was what was
driving a lot of the big projects.
Always Legacy Systems
People were saying 'I can't do a good job of handling my customer interactions
if I just put this one call center application in place, because it has to tie
into a customer data model. And if I am going to implement a customer data
model, that will affect how I do my marketing and how I do my sales force
automation -- so maybe we should do the whole thing at one time.
But that doesn't make sense. You really have to think through the entire
strategy, but recognize that big bang approaches so rarely work in enterprise
situations that there will always be legacy systems, and you will always have to
deal with some systems that are old.
CRMDaily: How do you see the market shaking out over the new few years?
Davis: We will continue to see further consolidation of the market. A lot of the
smaller guys will just go away or be acquired. Even now, we've been seeing less
and less of the smaller companies competing for deals. Really, it's only been
the four big companies lately: PeopleSoPeopleSoft, SAP (NYSE: SAP) , Siebel and
Oracle (Nasdaq: ORCL) .
Slippery Mid-Market
CRMDaily: What impact will Microsoft's (Nasdaq: MSFT) entrance have?
Davis: If Microsoft is serious about this market and goes after it as
aggressively as they appear they are going to, the mid-market has got to be
terrified -- and should be. Microsoft owns the desktop.
CRMDaily: Why the mid-market? Microsoft keeps insisting it is targeting the
small end.
Davis: Well, they say that -- but look at their price point. It is more of a
mid-market play. When they first started talking about [delivering a CRM
product], it sounded like they were talking about Outlook on steroids for
contact management. It sounded like they just wanted to take ACT! out of the
market. But their price point -- that is not an ACT! price point. That is an
Onyx (Nasdaq: ONXS) or Pivotal (Nasdaq: PVTL) price point. It will be
interesting to see where they will go and who they target. And, of course,
everyone has a different definition of what mid-market is, anyway.
Bridging the Gulf
CRMDaily: What is it like to work with Craig Conway?
Davis: Craig is an absolute visionary on this space. Three years ago, we were
not in the CRM business. We were selling enterprise applications, and Craig, at
that time, said this world will change -- and it not going to be buying
individual groups like SC or CRM. Eventually, the market will want to solve
business-process problems and those business processes will not recognize
boundaries between CRM and SC.
So, Craig made the bold decision to buy Vantive, which was a large acquisition
for PeopleSoft at that time. Then he made a huge bet and said we have to move to
pure Internet architecture.
A lot of people -- including myself when I was at Clarify -- we were talking
about how there is this canyon forming. [The] world was breaking under our feet
and on one side there was client server , and on the other was pure Internet
architecture. And we had to decide how to [navigate] this chasm.
By Erika Morphy
URL: siebel.com
peoplesoft.com
sap.com
oracle.com
microsoft.com
onyx.com
pivotal.com
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