Is CRM becoming a two horse race?

Posted: February 4, 2009 in CRM
Tags: , ,

The two biggest dogs in the CRM fight are Salesforce and Oracle.  You could debate that but not with me.  Salesforce has had a good run lately with announcements about its platform technology, its community of developers and its new foray into social media and social networking.  Oracle has been plowing the same field but if you notice the companies’ approaches are very different.

Salesforce wants to be a platform company, which means that it is relinquishing some of the nitty-gritty application stuff to its partners.  For example, company CEO Marc Benioff announced a relationship with Facebook but once the integration made news, companies like Apirio have been carrying the ball making announcements about applications like recruiting which they did a couple of days ago.

On the other hand, Oracle has been sticking more closely to the applications.  Last week Senior Vice President Anthony Lye gave an announcement webinar in which he updated us on Oracle’s social networking applications.  Oracle’s auxiliary CRM applications are important because they are taking CRM a step further and adjusting it to selling in a world with slack demand.  Regardless of the economy, if you stay in a market long enough demand slackens.  So I think Oracle’s announcement caries double the usual significance.

The Oracle applications look very interesting for the conditions we find ourselves in right now.  There are tools for pricing, for organizing content, for loyalty management, deal management and much more.  This is not to say that Salesforce lacks these things.  In fact, if you go to the AppExchange you are likely to discover multiple companies with similar applications in each niche.

It is beginning to appear to me that Salesforce might be taking a hands off approach to application partners a bit too far.  It is one thing to give your partners plenty of space and to not compete with them.  It is another thing to expect the end customer to wade through a throng of useful applications and to pick the right one all the time. 

Oracle has fewer partners, too few if you ask me, but the relationships are tighter.  Which is better?  Would you believe that’s the wrong question?  All of these relationships take a point solution strategy too far, in my view.  Customer companies don’t care about your marketing automation or content management at face value.  They care a lot more about increasing sales though and keeping that idea front and center in a recession is just smart.

Salesforce partners have begun to band together to formulate integrated solution sets with some positive results.  One example is Eloqua and Kadient.  The two companies have identified an integrated marketing and sales process that involves Eloqua marketing solutions and Kadient playbooks working with Salesforce SFA.  The effect is to acknowledge the need for end-to-end marketing and sales solutions and then to provide one.

Oracle is doing similar stuff with partners as well as their Social CRM applications and on-demand widgets.  Oracle’s instincts are right but now it’s time to open up the partner program a bit wider.

I like Salesforce and I like Oracle.  I don’t have investments in either one but I think each company has some good products as well as smart and often nice people.  Both companies are putting a lot of work into social technologies, which I think is wise.  If I had to choose which company’s approach to the market I like better it would be a toss up.  Salesforce has certainly has the vision and a penchant for selling the vision.

Oracle, on the other hand, has a knack for sales and marketing.  They understand their customers’ selling pain and though they are not as nimble by a long shot, they are making strides in bringing their vision to market.

In any competition between two companies you see the pendulum swing and this piece should not be seen as anointing one winner over another.  Simply stated, there are two major players in the on-demand CRM market, each has strengths and an approach that attempts to maximize them. 

Over time, it is possible that the two companies will diverge.  Despite the apparent convergence we now see Salesforce will continue to accentuate the platform while Oracle focuses on its enterprise base.  That would make Salesforce more of a thorn in the side of Steve Balmer than Larry Ellison or Anthony Lye. 

The Salesforce partners are becoming more mature and capable with companies like Apirio, BlueWolf  and others establishing good niches in the enterprise.  The surprise conclusion might be that Oracle will find itself competing not with a single company like Salesforce but with a raft of smaller specialists.  All the more reason for Oracle to re-examine its partner program.

Comments
  1. jasonlk says:

    Denis on ” It is another thing to expect the end customer to wade through a throng of useful applications and to pick the right one all the time. ”

    I agree with you, but in practice, I think it’s not a huge issue b/c AppExchange gives customers strong tools to rank vendors by both (1) ratings and (2) installs/users.

    Thus, it’s pretty easy to find the top 1-2 players in each category.

    Some customers do want to be “told” the best vendor for a solution, but in our experience at EchoSign electronic signature, many also want a chance to look at at least two when buying any material amount of licenses.

  2. glenn9090 says:

    Thanks for mentioning us Denis, but what’s that aphorism about “I don’t care what you say about me… as long as you spell my name right?” It’s Appirio, not Apirio. Details of our Facebook-based referral management app for SFDC at http://appirio.com/products/rms.
    –GlennW, Appirio

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