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Competition Heats Amoung CRM Software Giants
By Jim Berkowitz
Expert Author
Article Date: 2009-03-16
Here are several excerpts from an interesting article by Bob Evans about the competition between the CRM software (and cloud computing) industry giants, (salesforce.com, Oracle, SAP and Microsoft), Global CIO: Salesforce CEO Marc Benioff Has Declared War - Are You Enlisting?. If this topic interests you, I urge you to read the entire source article for a much more comprehensive analysis:
It's one thing for Salesforce.com founder and CEO Marc Benioff to be willing to bet his company on its ability to survive a knife-fight with Oracle, SAP and Microsoft - after all, this business was built on feisty entrepreneurs whose innovative approaches won the hearts of customers and toppled slow-moving giants. But the much bigger issue in this drama isn't about Salesforce but rather about you: Are you willing to bet your current credibility and very likely your job on Salesforce's ability to deliver big-time applications, enduring and robust development platforms, and ongoing financial stability while Oracle and others look to stuff it permanently into a narrow niche that doesn't get much sunshine?
Benioff, quite appropriately, has been proudly and pointedly highlighting his company's huge customer wins against Oracle and SAP and Microsoft. And yet Oracle CEO Larry Ellison, with a much-longer and more-impressive track record than Benioff, says Oracle has begun winning consistently in head-to-head competition for deals in Salesforce's wheelhouse: CRM apps in the cloud. Question: Are Salesforce's wins indications of a fundamental shift in customer strategies, or a shorter-term indication of a niche play that is working very nicely?
Benioff, quite accurately, points to the lower cost of the cloud model versus the traditional on-premises software model. But Microsoft, Oracle, and SAP have begun transforming significant parts of their businesses to embrace the cloud approach and will surely narrow dramatically any price gap Benioff can now tout. Question: Can Salesforce and Benioff continue their impressive growth rates and gain breakaway momentum before those big, hungry competitors retool their offerings and begin very aggressive attempts to marginalize Salesforce?
Benioff, quite opportunistically, has been hammering the old model as expensive, inflexible, and outdated, and wouldn't his world be wonderful if his three big competitors were staying rooted in the past and limiting their customers to nothing but outdated models? But they are not: All three companies, albeit not at exactly breakneck speeds, are deconstructing their traditional models and moving into the cloud - Microsoft's cloud revenue should top $1 billion in less than two years. Question: Will CIOs decide that the undeniable but limited benefits offered by the Salesforce model outweigh so dramatically the value of global scale and product depth and vast financial resources offered by the other three that a switch should be made?
As if competing 24/7 against Oracle and Microsoft and SAP and being lead evangelist for a new approach to enterprise applications weren't enough of a challenge, the recession is pulling Salesforce's growth rates back down to earth. And the big concern for Salesforce is that its chance to achieve sufficient momentum to slug it out long-term with the big boys could be hampered by recession-driven spending reductions at best and customer attrition at worst.
But in the end, it's not about Salesforce or its numbers or its CEO; it's about you. Your company, your priorities, your budget, and the degree to which you believe that Salesforce can not only reduce some costs for you but also deliver every single bit of functionality and value that Oracle or Microsoft or SAP could, plus a lot extra to cover the transaction costs. It's about whether you believe Benioff's company is a force of nature that will endure, or an interesting phenomenon but not interesting enough to bet your career on. Good luck.
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About the Author:
Jim Berkowitz is a seasoned executive with more than 30 years of professional services and project management experience related to Customer Relationship Management (CRM) and Financial Management (Accounting & ERP) software solutions for small, mid-sized and Fortune 500 companies. As a Sales Force Automation and CRM Consultant, Jim has assisted more then 100 companies with the design and implementation of custom CRM solutions.
Mr. Berkowitz is the founder and President of CRM Mastery, Inc.; a company dedicated to serving small and mid-sized enterprises (SMEs) by offering affordable tools and guidance to help them plan for and succeed with their CRM initiatives.
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