Competitive Landscape: Salesforce.com CRM Services, North America and Western Europe

Transcription

1 Competitive Landscape: Salesforce.com CRM Services, North America and Western Europe Published: 21 December 2012 Market Analysis and Statistics G Analyst(s): Patrick J. Sullivan, Khalda De Souza This document discusses the competitive forces at play in the salesforce.com CRM service market. Practice leaders and strategists within service providers should use this research to develop and refine strategies to increase revenue and market share from salesforce.com CRM services. Key Findings Salesforce.com consulting and implementation services represent one of the largest highgrowth markets available to application service providers. Salesforce.com has rapidly become the second-largest CRM software solution; salesforce.com implementations involving 10,000 or more users are becoming common, with $10 million projects also starting to be seen. Salesforce.com is marketed aggressively and sold directly to business buyers, and the market offers two opportunities to service providers: Salesforce.com consulting and implementation services for stand-alone implementations for rapid implementation Front-office business transformations that require business consulting, technology integration and change management, with participation of both business and IT We identify five categories of salesforce.com service providers based on their ability to address dimensions of business and technology complexity, and global reach. Recommendations CRM practice leaders and strategists should align tightly with salesforce.com core solutions (Sales Cloud, Service Cloud) and invest in salesforce.com-specific solutions to capture market share and revenue from one or both of the market opportunities. Also, they should develop competencies related to Apex and Force.com to provide integrated solutions and custom extensions to customers. Focus initially on business buyers that drive sales and customer service initiatives when pursuing new accounts, or limited scope of deployments. For existing accounts, or large

2 transformational efforts, focus on both business and IT buyers, emphasizing organizational change with technology solutions adapted to their needs. Table of Contents Analysis...2 Competitive Situation and Trends... 4 Salesforce.com Consulting and Implementation... 4 Front-Office Business Transformation Using Salesforce.com... 4 Market Players...5 Providers Profiled in This Report The Future of Competition Competitive Profiles...11 Accenture (Global Full-Service CRM Provider)...11 Appirio (Regional/Global Salesforce.com Integrator)...12 BearingPoint (Business Consultancy)...14 Bluewolf (SaaS CRM Specialist)...15 Capgemini (Global Full-Service CRM Provider)...16 Fujitsu (Regional/Global Salesforce.com Integrator)...17 Sakonent (SaaS CRM Specialist) Salesforce.com Services (Salesforce.com Technology Specialist) References and Methodology...21 Recommended Reading...21 List of Tables Table 1. Competitive Landscape Provider Categories and Examples...8 List of Figures Figure 1. Salesforce.com Service Provider Categories and Positioning... 7 Analysis Salesforce.com consulting and implementation services represent one of the largest high-growth markets available to application service providers. Salesforce.com has rapidly become the secondlargest global CRM software provider, having surpassed Oracle in revenue in It will surpass Page 2 of 23 Gartner, Inc. G

3 SAP to become the leading global CRM software provider in In North America, salesforce.com is already the leading CRM software solution. This high growth and demand for the software is also fueling high growth for consulting and implementation services related to salesforce.com. Analysis of a Magic Quadrant survey of CRM service recipients 2 indicated that salesforce.com projects were the second most common CRM projects (behind Oracle), and the percentage of CRM projects based on salesforce.com increased from 11% to 16% between 2010 and The survey also found that the median size of these engagements in Western Europe and North America was between $1 million and $2.5 million, which is similar in size to SAP engagements (see "CRM Applications Deployed by Consultancies in 2012 Show Which Skills Are Prevalent"). The IT services market for consulting and implementation services related to salesforce.com CRM solutions (sales, marketing and customer service) is estimated to be between $4.5 billion and $5.2 billion in 2012 and experiencing 30% growth, which is expected to continue into , 4 This analysis is also supported by an increasing number of large deals each year involving 10,000 or more users across multiple sites and countries that are becoming more common, as well as $10 million projects starting to be seen. Gartner has defined a CRM market landscape that includes salesforce.com CRM services (see "Competitive Landscape: CRM Service Providers, North America and Western Europe"). These are services linked to sales, marketing and/or customer services that support organizations in developing strategies for these functions and/or implementation of technology-based solutions. Germaine to most services associated with salesforce.com are the following market characteristics: CRM strategy and consulting services These services provide business consulting to support efforts that transform business processes used by the client and that relate to customer-centric policies, approaches, technologies and processes. These are typically driven by overall corporate strategic initiatives aligned to how CRM disciplines and technologies can be applied to specific vertical industries to gain competitive advantage. Multiple buying centers CRM services typically have multiple buying centers within both the business units and IT. In the past, CRM was thought of as a subset of ERP systems or application suites, and the IT organization was the primary buying center striving to support the business requirements. However, with the push toward customer experience as a differentiating business strategy, business managers are increasingly becoming buying centers. This is particularly true for CRM solution purchasing, with salesforce.com being marketed aggressively and sold directly to business buyers as a software as a service (SaaS) application that can be deployed quickly. CRM implementation and deployment services These provide technology consulting, deployment and integration services for CRM technology-based solutions. These services focus on deploying the CRM software, with less emphasis on business strategy. These represent more than 50% of the overall CRM service market and are the domain of consulting and system integrators that deploy CRM solutions, often as part of a business transformational effort to increase customer centricity. These services are typically sponsored jointly and coordinated with business and IT buyers. Gartner, Inc. G Page 3 of 23

4 Salesforce.com-specific technology skills Force.com and salesforce.com feature technologies and architecture that require specific skills. Apex is a unique object-oriented language that allows developers to execute flow and transaction control statements on the Force.com platform server, with calls to the Force.com API. Also, each salesforce.com solution set (Sales Cloud, Service Cloud, Marketing Cloud, Chatter) features unique technology nuances. This requires providers to invest in training because typical Java or developers from other CRM platforms (for example, Siebel, SAP) must be cross-trained. This limits the number of staff and providers for salesforce.com. Holistic CRM solutions With the shift to cloud infrastructure, business process management (BPM) and social CRM, as well as information and analytics, there is a need for holistic CRM services that is, services that integrate all aspects for a robust customer experience. This is particularly true when the business buyer (sales, marketing or customer service executive) is the primary driver of the solution as part of an initiative to shift how the enterprise interacts with customers. A subset of these services provides a holistic, highly focused, industry-specific CRM solution that addresses the needs of a set of processes (such as sales pipeline management or customer-led development) and also the needs of a specific vertical sector (such as pharmaceuticals or retail). This is particularly true with service cloud deployments that must integrate with many other applications, social/mobile interactions and contact center infrastructure. Additionally, several partners have built industry-specific solutions on top of salesforce.com (for example, Veeva for pharmaceutical sales, CSC for insurance claims processing and Shamrock CRM for nonprofit organizations). Competitive Situation and Trends The salesforce.com marketplace is undergoing a dramatic transition against which providers must be ready to respond and also dictate the marketing approach. The salesforce.com market is splitting into two marketplaces. Salesforce.com Consulting and Implementation Historically, most salesforce.com deployments have focused on sales (Sales Cloud) and customer service (Service Cloud) deployed as stand-alone solutions sold primarily to business buyers as an alternative to large-scale CRM deployments. There remains a sizable market for these stand-alone deployments, particularly in smaller businesses and organizations deploying CRM solutions for the first time. The service market for this is large and centered on technology integration and deployment requiring deep competencies in salesforce.com, Force.com, Apex, information integration, mobile technologies and, more recently, social technologies. These efforts are typically four- to 12-week efforts, with fees between $30,000 and $200,000. Front-Office Business Transformation Using Salesforce.com During the past few years, the market has changed, with business buyers still being the driving force, and many organizations looking to "transform" the business and bring in salesforce.com solutions as part of this transformational effort. These efforts require capabilities and a focus that has shifted the approach to these projects. These salesforce.com projects are very sizable in scope and scale in that they are business change initiatives spanning multiple business units and also Page 4 of 23 Gartner, Inc. G

5 must integrate with existing and other new applications. These deployments typically incorporate multiple technologies, including mobile, social, e-commerce, customer analytics and digital design. These implementations are business transformational efforts leveraging technology and require both the business and IT organization to collaborate and jointly develop solutions. This represents the second salesforce.com market opportunity that is larger than the technology deployment effort outlined above and is also growing much more rapidly. These projects are considerably larger and longer, with fees often exceeding $1 million. Successful providers require both business consulting competencies and deep salesforce.com and technology integration competencies. With 30% growth across these solutions, this market offers application service providers a large and unique opportunity to expand revenue. To accomplish this, they must be tightly aligned with salesforce.com solutions (Sales Cloud, Service Cloud and/or Marketing Cloud) and have deep competencies related to Force.com and Apex, as well as have the ability to engage with both business buyers and IT buyers. Market Players Currently, there are hundreds of application service providers that have salesforce.com practices. These providers come from a wide range of backgrounds, have different focus areas and also approach solutions from different perspectives. This research develops a framework to organize major categories of salesforce.com service providers to provide a perspective on how to understand the market. Application service providers can use this to refine their salesforce.com practice strategies to align with their overall market strategies and unique points of differentiation to accelerate market share in this high-growth market. Salesforce.com implementations can be very simple and straight forward if they are stand-alone, single-function deployments. In most cases, however, these implementations have become more complex over time. The complexity is not in the configuration of the salesforce.com software itself; rather, it is related to three other dimensions tied to how the implementation is designed to achieve broader business and technology changes. These three dimensions are: Business complexity This is the extent to which the implementation is tied to business change, transformation and breadth of impact on business operations. Front-office transformations are business changes first, with change management the critical factor. It must be remembered that, in general, SaaS and salesforce.com bring a predefined set of functions, processes and implied workflows to which the business must adapt. The number of business units and users, and workflow redesign all contribute to complexity. Technical complexity Salesforce.com is rarely implemented as a stand-alone application; rather, it is integrated with other on-premises applications and other SaaS applications. Data needed for CRM applications comes from many sources and formats, and the information architectures, extraction, cleansing, migration and interfaces are just as critical and complex as other applications. Also, as part of larger implementations, mobility, analytics, BPM and e- commerce technologies are often included as part of the solution, requiring a broad range of technical skills and competencies. Gartner, Inc. G Page 5 of 23

6 Geographic complexity Many large CRM implementations cut across multiple regions. Each region and country must be supported from a change management, regulatory and information integration perspective. Multiregional implementations may require multiregional service capabilities. These three complexity factors provide a good framework to define the competitive landscape. Salesforce.com service providers can be viewed relative to their capabilities and scale along these three dimensions of complexity (business, technical and geographic scope). Organizations need to evaluate the complexity along these three dimensions to manage the risk (as well as costs), and to identify providers that best fit the complexity of their implementation. Given the market dynamics related to the two types of salesforce.com opportunities, these complexity factors also help identify the providers that are strong in each of the two sectors. Providers that are strong on technology complexity and on salesforce.com technology integration and implementation are well-suited for the salesforce.com consulting and implementation market opportunities. Providers that can address both business and technology complexity are wellpositioned to take advantage of the front-office transformational market opportunities. We have defined five categories of salesforce.com service providers based on the business and technical complexity factors. These categories are shown in Figure 1 as they are arrayed along the various dimensions. Page 6 of 23 Gartner, Inc. G

7 Figure 1. Salesforce.com Service Provider Categories and Positioning High Business Consultancies Business Complexity SaaS CRM Specialists Global Full-Service CRM Providers Regional/Global Salesforce.com Integrators Low Salesforce.com Technology Specialist Low Source: Gartner (December 2012) Technology Complexity High Table 1 illustrates Gartner's categorization of salesforce.com service providers. A "4" indicates the capabilities of most providers in these categories. A "2" indicates that providers may have limited capabilities in these areas, or that only some providers have capabilities in these areas. Not all providers in each category are exactly the same. Organizations should check specifics before contracting with a provider. Sample providers are included as being illustrative of the category. The examples are not intended to be exclusive or indicative of service quality. Many other providers are within each category and are comparable to those on the list and, indeed, may be excellent fits for any client. Gartner, Inc. G Page 7 of 23

8 Table 1. Competitive Landscape Provider Categories and Examples Category Business Consulting Skills Technical Implementation Skills Large-Enterprise Clients SMB Clients Multiregion Deals Comments Example Providers Salesforce.com Technology Specialists Direct services to drive adoption and deployment of salesforce.com solutions. Predominant focus is on complex architecture design and implementations supporting customers and partners. Salesforce.com Services Business Consultancies Focus on business transformation with solid salesforce.com competencies but limited in broad-scale, technical transformations. BearingPoint, Ernst & Young, KPMG, PwC, West Monroe Partners Global Full-Service CRM Providers Proven expertise in complex, global business solutions and application life cycle services, with focused practice on CRM and salesforce.com Accenture, Capgemini, CGI, CSC, Deloitte, Hitachi Consulting, IBM GBS, NTT Data Regional/Global Salesforce.com Integrators Technology integration focus, with significant salesforce.com-focused practice. Experience in some global deals and striving to strengthen global presence and application life cycle services. ABSi, Acumen Consulting, Appirio, Astadia, Ciber, Cloud- Sense, Cloud Sherpas, Cloud- Trigger, CoreMatrix Systems, Cognizant, Fujitsu, H&W Consulting, HP Services, igate, Infosys, Mahindra Satyam, Nefos, Sererra, TCS, Westbrook International, Wipro SaaS CRM Specialists Boutique firms that focus on complex CRM transformations and CRM strategies and also have a salesforce.com practice. Presence in one or two countries. Bluewolf, Idealist Consulting, Innoveer, ProQuest Consulting, Sakonent Page 8 of 23 Gartner, Inc. G

9 SMB = small or midsize business TCS = Tata Consultancy Services Source: Gartner (December 2012) Gartner, Inc. G Page 9 of 23

10 Providers Profiled in This Report Gartner has selected eight salesforce.com CRM service providers to profile in this report. These eight are representative examples of different categories of salesforce.com partners. Some are active in both North America and Europe others are more active in one rather than the other or present in only one of these markets. Our goal is to illustrate the variety of providers in the market and the different ways the different partner types differentiate. They were selected for inclusion for the following reasons: Each has strategic focus and commitment to developing their salesforce.com CRM service business. Each illustrates attributes of providers within their category. Based on Gartner conversations with end-user organizations, these providers have significant visibility as salesforce.com enterprise application service partners. In each of the profiles, Gartner also provides a broad range of revenue to characterize the size of the salesforce.com service practice. The following practice size characterizations are used as part of the provider profiles: Very large: More than $150 million Large: More than $50 million but less than $150 million Midsize: More than $25 million but less than $50 million Small: More than $10 million but less than $25 million In this report, we profile: Accenture Appirio BearingPoint Bluewolf Capgemini Fujitsu Sakonent Salesforce.com Services The Future of Competition Service providers must either grow their own CRM practice to incorporate cloud computing, social CRM, digital media and mobility, or form partnerships with specialist vendors. Service providers still focusing on traditional on-premises CRM implementations will gradually lose in the competition in the next one to two years. We expect: Page 10 of 23 Gartner, Inc. G

11 SaaS and hosted CRM solutions will become mainstream in sales applications, e-commerce, online marketing and customer service. Customer service and contact center applications will continue to move to the cloud in the next few years. Salesforce.com, Microsoft Dynamics CRM and Oracle Fusion CRM are anticipated to be the leading platforms for new CRM deployments. Growth in the digital consumer base, which includes the shift to online marketing, social media and unified communications technologies, as well as adoption of packaged CRM applications by SMB organizations, will force service providers to focus their CRM practice by going after specific customer segments. Emphasis will increase on "systems of differentiation" (see "Applying Gartner's Pace Layer Model to Business Analytics") based on information, analytics and integration into workflows for operational improvement. This will also encompass master data management and BPM technologies and services to extend the value of customer information to sales and marketing initiatives. CRM solutions will become more vertically driven, particularly for industries that have a large customer base with business-to-consumer models, such as telecommunications, travel, banking, insurance, consumer products, automotive and retail. Customers will demand more local references, especially when SaaS CRM solutions become more mature and as more implementations are completed at the local and regional level. CRM mobile-enabled solutions will become a must-have capability for service providers because customers are demanding to access, analyze and act on information anytime, anywhere. Competitive Profiles Accenture (Global Full-Service CRM Provider) Market Overview and Revenue Accenture is the second-largest global provider of application services. 5 Accenture's salesforce.com practice is the largest in the market, with a head count exceeding 1,500 globally, and with 30% in North America, 30% in Europe and 40% in the rest of the world. The company's salesforce.com practice has doubled in revenue in each of the last three years. Accenture is a salesforce.com Platinum partner (see Note 1) and characterized as a very large salesforce.com service provider (estimated revenue of more than $150 million). General Product/Service Marketing Strategy Accenture targets large enterprises that are looking for robust and complex solutions using salesforce.com. Accenture views CRM, in general, and salesforce.com, specifically, as technology that can be used to transform business operations and functions. Gartner, Inc. G Page 11 of 23

12 Accenture is vertical market focused, with vertical practices leading the solutions and relationships with clients. Verticals of specific focus for CRM solutions include telecom, high technology, life sciences, insurance, banking and consumer goods. Using this vertical orientation, Accenture can shape salesforce.com solutions, leveraging industry best practices to address business issues and enable business process transformation. Accenture leverages relationships with both business and IT buyers to manage perceived risk of business transformation using cloud technology. Accenture realizes that the reality for its clients is that hybrid cloud and SaaS solutions, such as salesforce.com, require significant adaptation and integration. Technology independence enables Accenture to deliver complex transformational solutions. Accenture positions itself as a provider of complex salesforce.com solutions, bringing a combination of business, change management and technology expertise around CRM and salesforce.com to reduce risk to business CRM initiatives. How Accenture Competes Accenture's differentiators are its strength in business transformation and investment in digital design capabilities. Accenture invests in its strategic accounts that seek to drive broader business outcomes, and this is where Accenture derives a large portion of its revenue. The relationship with existing accounts creates the opportunity to upsell and cross-sell, and it assures an ongoing presence with both business and IT buyers. Accenture approaches new accounts with a business buyer and business transformation perspective. This requires a vertical market approach and sits well with salesforce.com's market strategy of selling directly to business buyers. Accenture is also well-positioned to support global and multiregional clients due to its scale and global breadth. Accenture has established two social media innovation centers, in the U.K. and in the Silicon Valley in the U.S. These build next-generation, industry-specific solutions through joining social technologies (including salesforce.com's Chatter) with mobile and analytics, while leveraging Accenture Interactive (which provides marketing services to chief marketing officers). Accenture has invested in an agile global delivery process, including both on-site and offshore teams. The on-site team maps salesforce.com functionality to business processes, identifying gaps and issues; integration points; and configuration, data, social/mobile and analytic requirements. This on-site team is supported by the offshore resources that have skills specific to the client's industry and to salesforce.com. Appirio (Regional/Global Salesforce.com Integrator) Market Overview and Revenue Appirio provides professional services for all stages of SaaS application services and specializes in salesforce.com deployments. Appirio's head count includes more than 300 salesforce.com consultants globally: 190 in North America, 25 in Europe, 30 in Japan and 100 in India. Appirio recently expanded into Europe through the 2011 acquisition of Saaspoint and will increase investment in Europe and Japan. New business is generated primarily through direct sales as well Page 12 of 23 Gartner, Inc. G

13 as referrals from salesforce.com. Approximately 60% of total revenue is generated through followon business to existing accounts. Appirio also provides services specific to Workday and Google SaaS offerings. Appirio was born in the cloud era, runs internally on the same cloud platforms it sells and focuses on emerging technologies to change the way people work. Appirio's sales model is to be a highly visible part of the salesforce.com ecosystem and to generate leads from that ecosystem. Appirio is a salesforce.com Platinum partner and characterized as a large salesforce.com service provider (estimated revenue between $50 million and $150 million). General Product/Service Marketing Strategy Appirio targets midsize to large organizations, typically, with 1,000 to 10,000 employees. Targeted verticals include high technology, financial services, education, media and services, as well as the public sector in Europe. Appirio offers cloud professional services, including strategy, migration, deployment and management. Appirio differentiates with its "industrialization" of SaaS implementations. It has developed processes, methodologies, techniques and software to supplement salesforce.com. This is referred to as its Cloud Enablement Suite that includes: Cloud assets Software to help speed implementation and integration of salesforce.com into enterprises and other common applications. The company's Cloud Asset Library has a wide range of tools, code, templates and best practices. It includes solutions that, among other things, bring together multiple SaaS applications, such as salesforce.com, Gmail and Chatter, that are frequently used together and allow them to exchange information within the context of a field sales operational model. Cloud Management Center The project methodology application suite includes project templates by domain and vertical, project management steps and milestones, and best practice repositories, and it is geared toward agile delivery. Agile development processes Appirio has invested heavily in an industrialized agile project delivery process. The process incorporates on-site, nearshore, offshore and even crowdsourced resources, but it can also be driven from a business user interaction perspective. How Appirio Competes Appirio strives to provide high-quality, scalable salesforce.com services, using the Cloud Enablement Suite. The predefined software, templates, processes and methodologies, along with the tight relationship with salesforce.com, bring deep implementation, integration, migration and deployment. The agile methodology also focuses on collaboration between business management and IT to assure adherence to business needs and transformation requirements. Gartner, Inc. G Page 13 of 23

14 Appirio's primary go-to-market model is to be a key participant in the salesforce.com ecosystem and recognized as a partner of choice. Its sales organization goes to market by region and vertical industry but focuses on efficient software implementation. Appirio has developed an "industrialized" agile project delivery process that incorporates on-site, nearshore and offshore resources, and it is further supplemented by a crowdsourced community established by what Appirio calls CloudSpokes. CloudSpokes comprises more than 50,000 individuals globally with deep technical skills that can be used to design complex solutions, creating value for clients. Appirio has also developed Cloud Intelligence, using individual project metrics and cross-customer complexity metrics from Appirio's customers and community to enable better decisions. BearingPoint (Business Consultancy) Market Overview and Revenue BearingPoint is a business consulting firm based in Europe and operating in other regions through strategic partners (West Monroe Partners in North America and ABeam Consulting in Asia/Pacific). Salesforce.com is a major part of BearingPoint's Customer Management offerings, sitting within the CRM packaged solution group. BearingPoint has more than 70 consultants in Europe trained or experienced in SaaS, and specifically salesforce.com. Its U.S. partner, West Monroe Partners, has more than a dozen consultants certified in salesforce.com. BearingPoint is characterized as a small salesforce.com service provider (estimated revenue between $10 million and $25 million). General Product/Service Marketing Strategy BearingPoint has a Center of Excellence dedicated to SaaS solutions, which includes salesforce.com, with consultants trained in specific methodologies and skills to accelerate project outcomes. BearingPoint is often involved in all project phases, including prepackage selection, by leveraging its business transformation strength and relationship with business owners. How BearingPoint Competes BearingPoint aligns with business managers to position itself as a trusted business consulting partner. It has a business consulting heritage and also has credibility with technical implementation capabilities, allowing it to act as a C-level influencer within key accounts. BearingPoint targets strategy transformation projects. It focuses on providing quantifiable results through clear key performance indicators (KPIs) throughout the engagement. BearingPoint has business expertise and change management capabilities essential to CRM project success. It uses agile and collaborative methodology, with heavy involvement from business stakeholders in the transformational efforts and salesforce.com implementations. Gartner sees BearingPoint as a thought leader in the digital marketing space within CRM (see "Magic Quadrant for CRM Service Providers, Worldwide"), helping customers benefit from the Page 14 of 23 Gartner, Inc. G

15 technology to connect to customers and partners on the social network. BearingPoint is building on the Force.com platform that integrates with salesforce.com to create additional offerings for clients, including an IT Services Costing Tool that allows CIOs to optimize their budget. BearingPoint has formed strategic partnerships for global account coverage with West Monroe Partners for North America and ABeam for Asia/Pacific and Japan. These are strategic partnerships at the executive level and include joint investments (such as in joint methodologies) to provide seamless support to joint accounts. The company also partners with TCS for offshore delivery capability, bringing cost savings in deals to customers. Bluewolf (SaaS CRM Specialist) Market Overview and Revenue Bluewolf is a privately held U.S.-based consulting firm focused on CRM consulting and strategy, and salesforce.com solutions. Bluewolf has 600 salesforce.com consultants, referred to as "pack members." Bluewolf revenue is expected to increase 35% in Although 85% of current revenue and head count is in North America, Bluewolf is actively building its presence in Europe (currently 10%) and Asia/Pacific (5%) and can now support multiregional accounts. This growth is all organic (no significant acquisitions) to maintain the strong Bluewolf culture. Bluewolf is a salesforce.com Platinum partner, with 230 CRM certifications, and characterized as a large salesforce.com service provider (estimated revenue between $50 million and $150 million). General Product/Service Marketing Strategy Bluewolf targets midsize to large organizations, with CRM strategy and implementation services. Targeted verticals include financial services, media/telecom, manufacturing, high technology, pharmaceuticals, energy and retail. Bluewolf focuses on internal CRM operational optimization and results. This is more of an internal view than an external view that would focus on improving the overall customer experience. Bluewolf offers full life cycle solutions, beginning with Blueprint: consulting to identify issues and create solutions particularly focused on sales, lead generation and customer service, and less focused on marketing. This leads to Delivery: a salesforce.com solution with a heavy focus on business process transformation, as well as use of social, mobile and digital design as part of the solution. Bluewolf also offers application management services for salesforce.com. Bluewolf Beyond is an ongoing "managed CRM" service, with a unique focus on ongoing iteration, updates and management of salesforce.com applications. Beyond currently represents about 30% of Bluewolf revenue. How Bluewolf Competes Bluewolf goes to market as a CRM strategy and operational efficiency expert. The full life cycle approach usually starts with strategy and then implementation to improve how the enterprise Gartner, Inc. G Page 15 of 23

16 interacts with, and holistically addresses, customer interactions. Bluewolf Beyond for salesforce.com is a unique and differentiating service. Bluewolf views it as a "proactive innovation" since the salesforce.com implementation is constantly being extended, improved and grown from its initial base case. Bluewolf offers ExecutiveView, a real-time dashboard of KPIs and metrics based on operational execution. Through GoingSocial, the Bluewolf culture leads by example, with pack members (consultants) using social media for internal communication as well for communication with clients. This builds social competencies and skills not only within the pack, but also within the client organization. Bluewolf's standard practice is for consultants to become "embedded" with sales or service reps to understand the client's unique processes, as well as the organization's metrics and information needs. This creates a bottom-up view of the client's sales and service operations, and needs. This personal relationship also builds a strong partnership between the client and Bluewolf. At the Delivery stage, Bluewolf's mentality is to rapidly deploy a base solution that will then iterate, evolve and improve over time through Bluewolf Beyond. Bluewolf has a very strong and distinctive culture that permeates the organization. It is very appealing to accounts looking for creativity and energy. The strong culture also requires organic growth to maintain its flavor, which also limits Bluewolf's ability to grow. Capgemini (Global Full-Service CRM Provider) Market Overview and Revenue Capgemini is a large global consulting, technology and outsourcing firm, with a rapidly growing salesforce.com practice. In 2011, Capgemini had 200 salesforce.com consultants, with nearly 100 certified. Capgemini is on target to end 2012 with more than 500 salesforce.com consultants, with more than 350 certified. Although the company as a whole is predominantly in Western Europe (70% of total revenue), with a more rapidly growing presence in North America, more than half of its salesforce.com revenue in 2011 came from North America. Capgemini expects this practice to grow rapidly at more than 40%, especially in Europe, with the net result of the geographic split anticipated to shift to 40% in North America, more than 25% in U.K. and more than 15% in France. Capgemini is a salesforce.com Platinum partner and characterized as a large salesforce.com service provider (estimated revenue between $50 million and $150 million). General Product/Service Marketing Strategy Capgemini targets large enterprises in select verticals, with a technology approach to business transformation that is specific to the targeted vertical. Current targeted verticals for salesforce.com are retail, insurance and telecom. The focus is on business process optimization to achieve heightened customer experiences. Capgemini has developed prepackaged, full-scale vertical industry salesforce.com solutions for two of its targeted industries (retail and insurance) and is Page 16 of 23 Gartner, Inc. G

17 scoping for a third (telecom). Capgemini is investing in solutions for manufacturing (automotive and discrete) and life sciences. While Capgemini offers a complete life cycle of service offerings from consulting, to deployment, and on to manage/run, it finds that customers tend to want one set of life cycle services. As a result, Capgemini salesforce.com developers have created a library of common services, such as Siebel to salesforce.com Migration Accelerators, and Sales & Social Analytics Strategy, which are managed as reusable assets by Capgemini's central Center of Excellence. Capgemini created a "fast-growth initiative" specifically for salesforce.com to grow at a pace faster than the market with ambitious goals of tripling service revenue and growing influenced license revenue by four times in two years. Capgemini is actively expanding the geographic spread of its salesforce.com practice, with an expected uptake in Australia and Germany in The Capgemini sales model is to be a highly visible part of the salesforce.com ecosystem to generate leads from that ecosystem and, at times, directly from salesforce.com, as well as through a small direct-sales team. How Capgemini Competes Capgemini leverages its industry focus and joint go-to-market strategic partnership with salesforce.com to fuel its fast-growth initiative. Capgemini has settled on a simple value proposition: "Happy Customers Only." This phrase targets highly competitive consumer industries, such as retail, insurance and telecom. The focus is on using salesforce.com to build a better customer experience, resulting in happy customers for its clients. Capgemini has developed Customer Connect solutions, which are tailored specifically for targeted verticals that feature CRM, analytics, digital design, mobility and cloud-based infrastructure services. Capgemini has also developed a library of common services, including tools, accelerators and packages, to integrate social media, such as saleforce.com's Chatter, into solutions. Capgemini is dedicated to maintaining a large number of certified salesforce.com professionals. It uses a Rightshore delivery model, with most efforts on-site. Capgemini's salesforce.com group can build on the company's already strong presence in Western Europe as it attempts to expand its salesforce.com customer base into European countries with less readiness to adopt public cloud solutions. Fujitsu (Regional/Global Salesforce.com Integrator) Market Overview and Revenue Globally, Fujitsu is the third-largest provider of IT services and also consulting and implementation services, with total worldwide service revenue of $26 billion. 5 Fujitsu's salesforce.com practice is a small part of its overall portfolio but is growing 25% annually. Headquartered in Japan, the practice began with the 2007 acquisition of Okere. It expanded its salesforce.com offerings in 2008 when Gartner, Inc. G Page 17 of 23

18 Glovia, a Fujitsu company that provides ERP software, became a salesforce.com partner. The Fujitsu salesforce.com practice consists of 270 consultants globally, with 165 in the Americas, 60 in Japan, 25 in Europe and 20 in Asia/Pacific, excluding Japan. More than 90% of Fujitsu salesforce.com consultants have a certification. Fujitsu is a salesforce.com Platinum partner and characterized as a midsize salesforce.com service provider (estimated revenue between $25 million and $50 million). General Product/Service Marketing Strategy Fujitsu targets large existing accounts with salesforce.com CRM solutions, building on existing relationships and delivery successes. Fujitsu also targets Glovia's existing midmarket accounts looking to implement salesforce.com integrated with Glovia. New accounts come predominantly through the joint relationship with salesforce.com. Targeted verticals include retail, insurance, banking, nonprofit, higher education and public sector. Fujitsu's salesforce.com practice offerings include assessment and planning, customized and rightsize implementations, integrated solutions, and industry-specific solutions. Integrated solutions focus on seamless, end-to-end business process solutions, regardless of back-office platforms. Customized implementations can involve significant Force.com development. Fujitsu tackles projects of all sizes, from straightforward installations to large, complex, integrated solutions, and it can serve global companies. How Fujitsu Competes Fujitsu is a technology integrator that implements salesforce.com and Force.com applications as part of technology solutions. Fujitsu uses its large global sales organization to sell Fujitsu's salesforce.com professional services. The focus of this sales organization is Fujitsu technology and services, with salesforce.com being a small, but growing, part of the service portfolio. Additionally, some regions, such as the U.S., have dedicated salesforce.com reps. Delivery and sales are paired and very tightly aligned in all regions for customer success, from presales, to sales, to delivery, to customer satisfaction. Fujitsu has developed proprietary salesforce.com-based solutions and extensions, including its retail Social Clienteling solution to support social interactions and a more intimate customer experience, and its insurance claims solution, which is a property and casualty insurance solution to collect initial claim information from mobile devices through claim resolution. Fujitsu has also established partnering reseller agreements to augment its professional services with Canon, for its Forms and Print Services solution, and with Terrasky, for its SkyVisualEditor tool that enables users to develop forms and UIs to accelerate deployment of salesforce.com. Fujitsu offers the only Order Management/ERP on the AppExchange, as well as offering a more complete CRM/ERP solution for order management in the cloud. Salesforce.com has engaged Fujitsu to provide support desk services to salesforce.com direct customers, opening opportunities for future engagements should those customers seek additional services. Page 18 of 23 Gartner, Inc. G

19 Sakonent (SaaS CRM Specialist) Market Overview and Revenue Sakonent is a boutique CRM consultancy established in 2009, focused exclusively on CRM, which includes sales automation, marketing and call centers. Currently, Sakonent's business focuses mostly on salesforce.com. In 2011, Sakonent operated exclusively in the U.S., but by the end of 2012, it expects about 5% of its customers to come from Europe. Sakonent's salesforce.com head count includes 21 in North America and 101 in Asia (largely Pakistan, where there are low levels of voluntary turnover and where the company has recruited from universities). Additionally, Sakonent has about a dozen North American contractors who have been engaged when needed, including as subject matter experts for strategy work. Sakonent's salesforce.com service revenue is expected to increase 65% to 75% in Sakonent is a salesforce.com Silver partner and characterized as a small salesforce.com service provider (estimated revenue between $10 million and $25 million). General Product/Service Marketing Strategy Sakonent targets U.S. companies with at least 50 users. When working with large-enterprise or global customers, Sakonent is likely to work with a single division rather than the entire corporate entity. Sakonent does not currently target by industry; however, most of its salesforce.com work has been in manufacturing/distribution, professional services, travel, high technology, nonprofit and financial services. Almost all Sakonent projects are led by a line-of-business sponsor and not IT. Sakonent believes CRM is no longer just sales or marketing; rather, it encompasses the entire socially connected enterprise inside and outside the enterprise. Sakonent's salesforce.com offerings include services for consulting, implementation and outsourcing. Consulting services include road mapping, brand engagement strategy, business process analysis and engineering, culture/organization change management, program management, and adoption planning. Implementation services include project management, requirements, design, conversion, integration, testing and training. Outsourcing services include long-term application administration, support and maintenance. How Sakonent Competes Sakonent emphasizes that business process and user adoption come first, technology second. Sakonent believes that CRM projects are business projects, not IT projects, and thus, they succeed or fail based on business goals, rather than IT metrics. Although focusing discussion on CRM business problems rather than salesforce.com platform solution problems, Sakonent provides salesforce.com integration and deployment services, and it also leverages Force.com competencies for custom development related to CRM. In addition, the company's project delivery methodology is built specifically for CRM; for example, accounting for the poorly defined sales processes and incorporating behaviors and culture change in adoption activities. Gartner, Inc. G Page 19 of 23

20 Sakonent positions itself as the trusted advisor of the business manager. Small and nimble, Sakonent can adapt rapidly to the changing CRM environment. Salesforce.com Services (Salesforce.com Technology Specialist) Market Overview and Revenue Based in San Francisco, salesforce.com both builds and licenses the cloud-based salesforce.com CRM technology and also provides professional services related to its implementation via salesforce.com Services. Salesforce.com Services staff are the most experienced with the technology, holding more than 1,200 certifications, including 25 certified technical architects. The company's service revenue is expected to grow 35% in Service revenue is 60% from North America, 30% from Western Europe and 10% from Asia/Pacific, including Japan. Salesforce.com Services is characterized as a very large salesforce.com service provider (estimated revenue more than $150 million). General Product/Service Marketing Strategy Salesforce.com Services targets large organizations by positioning itself as the salesforce.com technology architect specialist for the most complex implementations. It simultaneously gives strong support to partners, including providing expert services to partner implementations and recommending partners to potential customers. Partners are provided training and support for the latest technologies and software version to assure their training and success on client projects. Salesforce.com Services strives to minimize competition with ecosystem partners, but it still provides deep technology expertise to support both customers and partners. Frequently, sales reps and presales technology teams recommend using software.com Services either as the lead provider or as the technology specialist to supplement other partners particularly on mobility, social and the latest releases of salesforce.com software. Implementation and deployment services are provided for select accounts that require unique solutions or that prefer to get the support directly from the technology provider. Through its website, salesforce.com Services also targets small companies with packaged solutions that include free trials and help desk services. Vertical focus is less through a targeted service focus or campaigns and more through following the software into financial services; retail; transportation and leisure; consumer, pharmaceuticals and logistics; and media and telecom. Salesforce.com Services typically charges a premium price. This is appropriate for the technology expertise it provides for salesforce.com technologies, and the fees are comparable to many of the fees of global full-service CRM providers. When clients do use salesforce.com Services for implementation services, the higher price is also appropriate if the implementation is complex or uses just-released technologies. Page 20 of 23 Gartner, Inc. G

21 How Salesforce.com Services Competes Salesforce.com Services competes by providing deep salesforce.com technical expertise, while carefully not competing with ecosystem partners. Through first encouraging pure-play salesforce.com specialists, and now urging large global system integrators to be partners, salesforce.com ensures a market for its software and platform, as well as a continuing need for the expertise it provides for the most complex technology solutions. As the technology provider, salesforce.com Services staff are on the cutting edge and always wellcertified. Through the 2011 acquisition of Model Metrics, salesforce.com increased its depth of technology competencies in mobility and also deepened the salesforce.com technology and architecture practice. There will always be customers who prefer to work directly with the technology provider. Similarly, partners gain additional credibility from selling services that include mixed teams of their own and salesforce.com staff. Efforts to minimize competition with partners encourages the partners' growth and commitment to salesforce.com solutions. References and Methodology Gartner used a variety of methodologies to create the information in this report, including insights from analysts' daily interactions with clients, user surveys, Gartner's 2012 CIO Survey and secondary research. In addition, the providers profiled in this report provided vendor briefings with us on their salesforce.com service practices. Recommended Reading Some documents may not be available as part of your current Gartner subscription. "Market Share: IT Services, 2011" "Magic Quadrant for CRM Service Providers, Worldwide" "Market Share: All Software Markets, Worldwide, 2011" "Competitive Landscape: CRM Service Providers, North America and Western Europe" "Competitive Landscape: Microsoft Dynamics CRM Partners, Europe" "Applying Gartner's Pace Layer Model to Business Analytics" "CRM Applications Deployed by Consultancies in 2012 Show Which Skills Are Prevalent" Gartner, Inc. G Page 21 of 23

22 Evidence 1 "Market Share: All Software Markets, Worldwide 2011" reports that salesforce.com software was the No. 2 CRM package, with 16.7% of market share and high market growth of 35.9% year over year. North America salesforce.com is the leading package, with 21.1% market share. In Western Europe, market share was only 9.4%, but growth of 28.6% far exceeded market leader SAP's growth. 2 "Magic Quadrant for CRM Service Providers, Worldwide" includes a survey of some 286 CRM customers, who indicated that 16% of all CRM projects related to salesforce.com. This estimates to be about $4.7 billion for consulting and solution implementation (CSI). Survey results were summarized in "CRM Applications Deployed by Consultancies in 2012 Show Which Skills Are Prevalent." 3 "Forecast Analysis: Application Solution Services, Worldwide, " estimates total CSI services for CRM globally in 2012 will be $23 billion, which is approximately 1.75 times total CRM software revenue (see "Market Share: All Software Markets, Worldwide, 2011"). Assuming that this same ratio holds for salesforce.com CRM, this would be a market of about $5.2 billion. It is likely the ration will be slightly lower about 1.5 times software, which would be about $4.5 billion. 4 Briefings and publicly available material are from the eight salesforce.com service providers profiled in this report that confirm growth rates, revenue estimates and solution focus. 5 "Market Share: IT Services, 2011" provides estimated consulting and implementation revenue and market share for each of the large providers. Note 1 Salesforce.com Salesforce.com partners can achieve Silver, Gold or Platinum partner status, with each level having specific requirements related to revenue contribution and certifications. Platinum is the highest level recognized by salesforce.com. Partners of all levels must invest in a minimum number of certified staff, have a revenue commitment and target customer satisfaction scores. Platinum partners must prove global implementation and complex integration capabilities. We highlight the relevant partner levels that each of our profiled providers have achieved. This document is published in the following Market Insights: Consulting & Solution Implementation Services Worldwide Page 22 of 23 Gartner, Inc. G

23 GARTNER HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT USA Regional Headquarters AUSTRALIA BRAZIL JAPAN UNITED KINGDOM For a complete list of worldwide locations, visit Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner s prior written permission. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner s research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity on its website, ombudsman/omb_guide2.jsp. Gartner, Inc. G Page 23 of 23