A couple of years ago, I showed how the various CRM products had moved through the Forrester and Gartner magic quadrants, showing which products were on the rise and which were being left behind. I did not do one in 2013 because I was waiting for Forrester to release their CRM report but it never eventuated (or I never saw it). Gartner continue to release the magic quadrant for sales force automation so I thought I would take the last three years and see how the main players are tracking. If you want a copy of the latest report, you can get it from here.
I soon noticed that if I included every CRM product reviewed by Gartner, the graphs got a bit messy when overlayed with each other so my rule is to only include CRM products which have been in the ‘Leaders’ quadrant (the top right) in at least one of the three years. This brings the competition down to a five-horse race:
- Microsoft Dynamics CRM
- Microsoft Dynamics CRM Online (Gartner reviews them as distinct products)
- Oracle (Siebel CRM)
- SAP (CRM)
Here it is by way of the GIMP editing tool. Part of the ‘rustic’ nature of the graph was Gartner choosing to switch format between 2012 and 2013, part of it is also the quality of the graphs I obtained through searching online and part of it is my limited graphical editing skills. Let us consider this a springboard from which to leap when I repeat this exercise next year.
The progression goes from 2012 (the red dot), through to 2013 (the yellow dot) through to 2014 (the green dot). The horizontal axis is ‘Completeness of Vision’ (the strategic view behind the offering) and the vertical axis is ‘Ability to Execute’ (roughly speaking its alignment to market demand, and how easy is it to get in place and work with it).
Microsoft Dynamics CRM
As with all players, Microsoft Dynamics CRM has moved closer to the centre of the quadrant. I interpret this to mean the difference between products is narrowing, rather than one product accelerating away from the pack. The product is still within the Leaders quadrant. Where Microsoft Dynamics CRM has lost ground is in the ‘Ability to Execute’. Part of this may be the normalization of the products and perhaps it is also the overhaul of the look and feel and the stretch into mobility/touch compatibility. Gartner also suggests Microsoft Dynamics CRM is still a product which wins over the IT department but not necessarily the VP of sales.
Microsoft Dynamics CRM Online
The one product which has improved its position over the three years. The cloud version of Microsoft Dynamics CRM is now part of the Leader’s quadrant, moving in from the Visionaries quadrant, improving chiefly in ‘Ability to Execute’. Looking at the Gartner report and comparing the comments made against the on-premise offering, it seems the differentiator here is the price of CRM Online. At $65pupm for the ‘Professional’ version, Gartner considers this pricing level to be aggressive.
Oracle (Siebel CRM)
The grand-daddy of CRM systems, Siebel has slid out of the Leaders quadrant and fallen into the Challengers quadrant, losing heavily in ‘Completeness of Vision’. Gartner speaks of one strategic weakness with Siebel which is the limited go-to-market strategy. With Oracle Sales Cloud being the primary focus for Oracle (Gartner’s words, not mine), while investments will be made to maintain existing client bases, Gartner suggests new customers will go to the simpler to implement Oracle Sales Cloud, leaving Siebel little room to move in obtaining new customers.
Still ahead of the pack but, like the others, closer to the centre than in previous years. In their case the slide is even across both axes suggesting it is normalization rather than an inherent weakness. In terms of Gartner’s commentary, the areas of caution for the product are
- Salesforce’s high price, relative to the market
- The object/data-oriented approach of Salesforce1 as opposed to a task-oriented approach i.e. data capture vs process enablement
- A lack of a European data centre limiting access to the European market
Like Siebel, SAP has slipped into the Challengers quadrant, losing equally on both axes. Also, like Siebel, Gartner calls out the complexity of implementing this on-premise solution. In terms of the cautions, the story reflects that of Siebel; with SAP’s Cloud for Sales offering, there is limited room to move in acquiring new customers for the on-premise offering. Like Dynamics CRM, Gartner also considers SAP to be a solution yet to win the heart of the VP of sales.
Salesforce is certainly still ahead of the pack but all products are closer to each other than in previous years. For the on-premise behemoths (Siebel and SAP CRM), there is a question of future viability beyond their existing client bases. This should act as a cautionary warning to Dynamics CRM. Microsoft need to carefully balance the promotion of their on-premise and online options to ensure both have growth and the online offering does not cannibalise its brother.
Another clear message is the focus in obtaining new customers needs to be the VP of sales and, I would argue, the VP of marketing. IT products are considered for their ability to directly help the generation of demand and sales these days, rather than simply their ability to be managed effectively. While salesforce has a strong history of targeting sales within the new prospective organisations, Gartner suggests this is an area of improvement for the other vendors.
Finally, the good news story is Dynamics CRM Online, battling the tide and improving its position over the three years. Gartner admit that the Dynamics CRM online and on-premise offerings are ‘relatively the same’, so I expect to see the their two dots approach each other as time goes by. With the additional of Social Listening and Dynamics Marketing, it will also be interesting to see if this influences the position of the two products compared to their competition.