The buzz in enterprise software and M&A circles these days is how easy venture capital is, relatively speaking, to come by today. VentureWire, Venture Capital Journal and the many blogs from venture capitalists underscore this point. The buzz is so strong that rumors are surfacing from within larger ERP companies of senior managers and directors considering making a run at their own companies.
After hearing rumors of several start-ups percolating, it was time to check out what's really going on in terms of funding specifically for CRM these days. While this analysis is not meant to be exhaustive, it is a good indication of where venture capitalists are steering CRM with their investments, and where M&A activity is transforming the marketplace. Trends emerging around applications quantify the pay-back of marketing efforts, specifically lead generation and escalation, social networking, and even digital avatars from France. I want to also be very clear that I am not on any of the c..
OK, so here we are a week later and what do we know for sure? Well, lots of things. First, Oracle (Nasdaq: ORCL) now has seven assorted CRM packages from its acquisitions and those of its acquired companies -- if you count Siebel. The issue with counting Siebel is that the deal is not done yet. Don't look for the shareholders to derail this one since many have been clamoring for greater returns on their investments for quite a while. And don't look to the SEC to stop this one either. Unlike Peoplesoft, Siebel wants to be acquired, so the whole process should go much faster.
Meanwhile there are several factors which, deal or not, stand in the way of Oracle becoming the most dominant force in the enterprise software industry. Among them are the competition, Oracle's increasingly decrepit business model, and time. By far, look to Oracle's business model to weigh down the company.
The Model
Oracle started life on the mini-computer. Its claim to fame was its ability t..
The service revolution in
CRM -- and, in fact, throughout customer-facing strategies -- is well underway in many companies. The reason the remainder of the industry doesn't see it yet is because many CRM vendors' responses to the revolution are so slow that they make lagging economic indicators look speedy.
It's time to abandon the entire "my features are better than your features" sales and value-proposition arguments on the part of vendors, and get true customer religion -- and that religion is all about strategies and results. No feature-laden application is going to catapult any CRM vendor into relevance in the eyes of a prospect or customer. It's all about showing how software makes strategies work better than they do in manual mode. Services that companies can turn into strategies, sales and profits are at the heart of the revolution in the CRM landscape today.
The Future of Customer-Facing Strategies
So, what does the new landscape look like? It's populated with ..
They are everywhere -- value propositions that claim much and deliver little. The fact that so many value propositions these days are of the "boil the ocean" variety makes some thoughtful people wonder if their view of the world is overly simplistic or if they are missing something. Sure, a listing of all the features of a new software application presented as differentiators is educational. Yet it is often irrelevant to how companies actually buy software.
Many value propositions are starting to look like the menus at Chinese restaurants. To quote the late, great Rodney Dangerfield in that sophomoric classic "Back to School": "Do you look at a menu and say, OK?" It's the same perception one experiences when looking at the many factors so many software companies list as differentiators. Listing features and creating the "Chinese Menu Value Proposition" may impress others in the industry but is often seen as irrelevant by potential customers.
The recent article, "Customer Value Pr..
We've been having a debate in the graduate-level International Marketing course I am teaching regarding whether or not you can buy your way into entirely new markets through high levels of R & D spending. The knee-jerk reaction is to say the bigger the spending in R & D, the higher the innovation, therefore, entirely new markets get created as a result. What follows is market dominance, and just look at 3M, IBM (NYSE: IBM) , Microsoft (Nasdaq: MSFT) and other global leaders, my students pointed out. Throw in the Apple (Nasdaq: AAPL) iPod and case closed.
Yet for every example of multi-million to billion-dollar plus investments in R & D, you can just as easily find the R & D spending of smaller firms that created an entirely new segment and essentially obsoleted the competition. Salesforce.com (NYSE: CRM) did this in CRM and Microsoft's announced re-organization this week is aimed at precisely this same dynamic: how to intelligently market and sell so entirely new markets get cr..
