The latest move by Microsoft, announcing a new on-demand CRM offering- Live CRM- with much better pricing than Salesforce.com; is seen by many analysts as worrisome to SFDC's future growth and revenues. While there is concrete proof and signs that this is valid, I believe Salesforce.com should not be worried about Microsoft's move, perhaps they should be happy since the largest software company has validated the concept first created by Salesforce.com. Here is why:
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Microsoft is too late to the game
While Salesforce.com and other rivals such as Netsuite, Salesboom.com, RightNow, etc have been developing their solutions for 8 years, Microsoft has just recently started.
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Microsoft does not have an actual full product yet
Microsoft's move is hype. They have not actually released the product yet. They WILL release the BETA sometime in 2007!
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Microsoft promises to release the so called Live CRM in 2008!
The Full CRM Live product will only be available in July 2008 according to Microsoft.
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Microsoft's strategy with partners is unclear.
While they say the service will be sold through partners only, Steve Balmer got caught saying that it will also be offered directly to customers in the future which puts partners at risk.
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Microsoft is not the only Giant Software company to join the on-demand revolution
This latest move is seen as another big giant screaming loudly “Me Too!”. All the top enterprise solution providers such as Oracle and SAP have announced similar products.
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Microsoft is the smallest Enterprise Solution provider
The amount of business Microsoft's enterprise solutions departments generate is very little and thus Microsoft is not a major player in that sector anyways.
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Companies don't want to host their data with Microsoft.
I might be wrong on this one, but the last thing I want to do as a CEO of an IT company is trust my data to Microsoft.
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Microsoft's Move validates the on-demand concept even more.
Not that the SaaS- Software-as-a-Service model needs validating, but when Microsoft says it is a valid model, then all the better. This will mean a better stock price for SFDC and for any other rival wishing to go public or receive funding from Vcs.
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Pricing is not the only deciding factor when choosing CRM
While Microsoft's pricing is lower than Salesforce.com, as a good CRM consultant or professional services team member would tell you, pricing should be the last thing you base your CRM choice on.
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The Market is doubling yearly
The market grew by almost 104% in 2006, and expected to do the same in 2007, so there is a lot of business for everybody!
What Salesforce.com should be worried about is the threat smaller rivals poses. Many much smaller crm rivals have won major deals against Salesforce.com in the past months and years due to better customer service, pricing, vertical and industrial knowledge and solutions. Salesforce.com has been sharing the SaaS market by companies such as Netsuite, Salesboom.com, RightNow, Salesnet (acquired by RightNow), Entellium, and others.
One of those companies will create their own niche market within CRM and then will take the lead over Salesforce.com!
Customer Relationship Management- CRM solutions are used by most companies to manage customers, sales staff, and other critical processes. In recent years the on-demand CRM market has been growing rapidly; almost by 100% year-over-year, thanks to the cost benefits this model offers.
CRM 2.0 is a term that describes all the advances in CRM Software
that are a complete overhaul and a different CRM than the one we are used to!
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On-demand CRM is CRM 2.0
Since the old way of implementing CRM was in-house, a hosted CRM solution is partially CRM 2.0.
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Enterprise Mashups
Any hosted CRM solution that offers customization options such as custom objects, TABS, fields, reports, views, dashboards, workflows, formula fields and offers a web services API is a CRM 2.0 ready
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AJAX user interface
A CRM solution that offers an AJAX user interface is also CRM 2.0 ready
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Collaboration
A CRM system that offers a self-service web portal to employees, customers and partners and data is synchronized in real time to a web public knowledge base is CRM 2.0 ready.
Also, some companies such as Salesboom.com uses a Comet Ajax server-push model for real time messaging without depending on users to refresh for newer messages is definitely a CRM 2.0 ready system.
A Marketing department, often the most neglected when it comes to CRM solutions; will usually face critical issues when their company is deploying a CRM software solution. Here is a short list of issues and how to fix them.
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Believe in the Integrated One-System idea
Often more than not, different departments at a company use different unconnected systems to manage operations in what is known to be called data-silos. Integrated CRM solutions however connect these data silos by utilizing wall-to-wall one-system solutions, sometimes out-of-the-box.
You must educate your employees in Marketing, Sales and Customer support on the benefits an integrated system brings to them to get their buy-in
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Get your employees to buy-in CRM
The best integrated CRM solution for your business will be quickly rendered obsolete if your employees will not use it.
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Marketing First, not Last
Since for a CRM vendor, marketing licenses represent less than 10% of an average deployment, some solutions lake major marketing automation features. Make sure your marketing department's opinion about a CRM software solution represents more than 10% of the final decision.
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Integration, Integration, Integration
Your marketing department might resist giving up their usual marketing tools for an integrated system. If this is the case, the make sure that the CRM system you are implementing can be integrated to traditional and in-house systems, and possible have a web services API if it is an on-demand solution,
In many cases, management-support for CRM solutions is critical in a successful CRM deployment. Make sure managers understand the sophistication of data security , user, and profile management and how it can help them hide any data they wish hidden from the normal user or employee; this will give your marketing managers the peace of mind they need to accept and adopt CRM and wall-to-wall software solutions.
Finally when selecting such a solution from traditional vendors such as Oracle or SAP, or from software-as-a-service vendors such as Netsuite or Salesboom.com, make sure that you engage professional services to quickly customize, configure, deploy and adopt the solutions.
Each person or company in North America has a carbon dioxide footprint that can be estimated in which it indicates how much damage each person or company is doing to our environment.
The SaaS Movement lead by CRM software vendors such as Salesforce.com and Salesboom.com are eliminating tens if not hundreds of thousands of servers and hardware equipment required by traditional CRM solutions by offering CRM as a service in a multi-tenant shared environment.
Also the fact that these applications are online, cuts on printing of user manuals greatly. From my experience CRM demonstrations, presentations and training sessions in the SaaS industry are also performed online saving on emissions released by traveling.
Ideally, a CRM vendor that offers it's solutions as a hosted service, should choose a solar powered hosting provider and become 100% friendly to our beloved environment. But until that happens, choosing a hosted CRM solution over a traditional installed one is a great contribution to save our earth.
SaaS will Reduce the Trade Deficit with China
O.K, but this might sound bizarre. The software-as-a-Service movement could help reduce the USA trade deficit with China and here is how:
Well, if every business in America used software-as-a-service instead of the installed solutions, tremendous expenditures on hardware equipment would be eliminated. Most if not all of that hardware is imported from China for billions of dollars yearly.
If we could picture that the computer resides on the network, and our PC's at home or at work are low-cost no-processing machines with a low footprint on the environment, then Bingo! Not only will the trade deficit with China be significantly lowered since hardware will cost less and much of it will be eliminated; we will also help save our planet earth from all the eliminated emissions instead released into the atmosphere.
Besides; by innovating the software space we almost guarantee American companies first position in the SaaS market with hundreds of billions to be maid yearly.
The American Dollar is at an All-Time low compared to most world currencies, and while some jerk-type economist might persuade Americans it is bad to have a weak dollar, all American producers selling products and services internationally will generate more sales because their products and services out-of-the sudden (O.K-over 2 years) became 40% cheaper to Europeans and the rest of the world.
The USA largest Export sectors are by far technology and weapons which means plenty of opportunities for the Software-as-a-service model to generate substantial revenues and growth overseas with a weak dollar.
Just Imagine that most businesses of all sizes in the world use a hosted CRM software solution like NetSuite or Salesboom.com; millions of servers will no longer be bought from china, instead a portion of the cost would be paid to North American companies to host the service!
Not only will Software-as-a-Service help reduce the deficit with China, but it will also help curb the Chinese competition and threats to our economy.
March, 2007
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