The CRM Mash-Up

I'm Dan Farber, editor-in-chief at ZDNet and I'm here today to talk about CRM and in particular what I'm calling the CRM - Customer Relationship Management mash-up. And by mash-up, I don't mean some kind of Web trick. More like mashed potatoes in that, in the CRM industry, even in the application, so much consolidation of companies in IT spending, that there is a big sea change going on and it's mostly driven by one company: Oracle.

Oracle has been very busy lately buying JD Edwards and buying PeopleSoft and recently buying Siebel and what does it all mean? Well, it means that if you're a customer of any of those companies, you have to be questioning like, "Well, which CRM do I get from Oracle, which one is going to live, which one is going to die, I don't know." Which makes it easy for a competitor to Oracle, SAP, which is also a major company showing CRM and other applications to come in and you know, say, "Well, hey, if you don't know what Oracle's up to, we've just one product cycle and that's mostly serving the high-end large enterprises" and they pretty much have that market showing up with all the consolidation going on.

Now, there's one other player and I think we'll talk about moving more into the mid-market because Oracle is in there, and SAP is in there. Well, now Microsoft wants to play a big role here and they just introduced a new kind of upgrade of their CRM product and the new platform for business applications called dynamics. But, you know, they were quite a bit late to the game and, you know, really don't play much in the high-end. But the mid-market is much more wide open to find as maybe 500 or less computers, maybe a 1000 or less people.

But there's one more to mention to the mash-up and that is on demand. Now on demand means rather than on-premises, where you buy software license where you have to buy the hardware, you have to integrate it, and do all that hard work-- on demand means that you get it simply over a Web interface and someone else does all the dirty work. Now typically, it's been aimed more at the smaller-size businesses and that's where the company that's the leading light in the space, Salesforce.com started and now they're trying to move up the stack, move up into this space, get into the higher end and they're doing that with a very interesting proposition. One is, they're built from the ground up for the Web for on demand, whereas, these guys, you know, have a little bit of trouble. They have to buy a company, which is what Siebel did and which now Oracle did or they've got to figure out how to retrofit their own applications for on demand, which is not easy.

So, Salesforce is out there kind of pitching its wares and it has a platform where it takes care of all the hosting. It takes care of the data, all the security and now they're opening up their architecture, so that they can develop micro verticals which means that they have a generalized product. They're not in manufacturing for aerospace, but someone else could do that using their tools and then focusing on their engine. Now I call that the Microsoft model because it's a proprietary engine that developers built on and Microsoft always gets paid. Salesforce would always get paid, but in this case, a subscription rather than a software license.

So as you can see, ranging from small, from large, from the enterprise to the mid-size to the small, on demand and on-premises and consolidation going on, it's indeed a mash-up.