RESEARCH NOTE TECHNOLOGY VALUE MATRIX SECOND HALF 2013 CRM

RESEARCH NOTE TECHNOLOGY VALUE MATRIX SECOND HALF 2013 CRM THE BOTTOM LINE CRM continues to be a hotly-contested market, as vendors battle for prospects second and third-generation CRM investments in larger enterprises and broader adoption in the small and midsized business market. While the general trend has been to add more features to products, leading vendors are moving beyond point-to-point feature parity to balance usability with the addition of key productivity features. This Value Matrix evaluates current vendors ability to deliver value based on usability and functionality and projects 6-month trends for each vendor. The CRM Value Matrix covers both on-premise and cloud vendors in the market delivering core capabilities in the three pillars of CRM: sales, marketing, and customer service. Many vendors spent the first half of the year making and integrating acquisitions in the social and marketing space and enhancing their mobile platform capabilities. While this activity continues in the second half of 2013, other market activities signaling an increasingly competitive marketplace include: Significant new usability releases from a number of vendors. Both small and large vendors unveiled the results of their investment in improved user interface design, for desktop, smartphone, and tablet CRM. A growing presence of emerging players in the North American and European market. This Value Matrix includes a number of vendors, predominantly non-us based, that were below the radar of previous editions of the Matrix. Increasing investor interest in the sector. A number of privately-held vendors in the Matrix announced additional rounds of investment or IPO plans, showing the market s belief that there is still significant opportunity for growth and competition in CRM. Increased vendor focus on competitive switchouts. With many large enterprises looking at their second or third generation CRM deployment or an reimplementationlike upgrade, and smaller firms adopting cloud solutions with lower switching costs, switchouts in the market are rampant making customer satisfaction an important moving target. Download the CRM ROI modeling tool Nucleus Research Inc. 100 State Street Boston, MA 02109 Phone: +1 617.720.2000

CRM VALUE MATRIX 2H2013 Facilitator Leader Infusionsoft Infor Epiphany Salesforce.com Usability NetSuite SAP Cloud for Customer Aplicor Veeva Systems Cegedim SugarCRM Microsoft Dynamics CRM Oracle Fusion CRM Oracle CRM OnDemand Swiftpage SalesLogix BPMonline Sage CRM Oracle Siebel CRM CRM Next Maximizer Software Core Provider Zoho SAP NexJ Expert Functionality Competition continues to be strong in the CRM market, with most leaders making significant product announcements since the last Matrix, and most vendors trending upward and to the right. This Matrix reflects current positioning as well as an estimate of the trendline based on Nucleus's current view of products and roadmaps. The general trend in the market has been to add new functionality to products. However, leading vendors are moving toward balancing usability with key productivity features instead of point-topoint feature parity. Looking forward, filtering capabilities and guided next-best-action capabilities across the three pillars, especially sales and marketing, will drive position improvements. LEADERS Leaders in this edition of the CRM Value Matrix include Cegedim, Microsoft Dynamics CRM, Oracle CRM On Demand, Oracle Fusion CRM, Salesforce.com, and Veeva Systems. CEGEDIM Cegedim provides industry-specific CRM for life sciences, health care companies and professionals, and insurance companies. Cegedim moved into the Leaders Quadrant in this edition of the Value Matrix based on the continued investments Cegedim has made in usability and functionality as well as integration. Nucleus recently undertook an in-depth review of the latest version of Cegedim s mobile client, Mobile Intelligence 9, which was released in April 2013, and found: Page 2

Advancements in Cegedim s closed loop marketing (CLM) functionality for interactions with health care professionals including self-adapting content, customer profiling and segmentation capabilities, and collaborative tools for coordinating messaging between marketing, medical, and other team users, driving greater usability. Integration with Cegedim OneKey Digital, a syndicated database of health care professionals that monitors their social media presence and verifies them against the OneKey master reference database, so companies can create new customer segmentation models and increased market knowledge based on ongoing social media activity. Integration with AggregateSpend360 to enable proactive visibility of health care professional promotional spend thresholds before exceeding limitations. New life sciences contact center functionality to support multichannel strategies and enrich a 360-degree view of a customer. MICROSOFT DYNAMICS CRM Microsoft Dynamics CRM continues to hang on in the Leaders Quadrant. In recent conversations with Dynamics CRM users, Nucleus found the flexibility driven by the configuration and custom application development capabilities of XRM, the availability of different cloud and on-premise deployment options, and industry-specific functionality in areas like government (Nucleus Research n135 Guidebook Microsoft Dynamics CRM for Government, September 2013) were common reasons for selecting Dynamics over competitors. Along with new functionality, in July Microsoft announced new pricing and support options for Dynamics CRM customers planned for this fall. The tiered pricing and support options, as well as alignment of cloud and on-premise pricing will make it easier for customers to evaluate the ROI of different deployment options. The main advances in Dynamics CRM 2013 and Microsoft Dynamics CRM Online Fall 13 (both scheduled for fall availability) include: A redesigned user experience with a more intuitive interface Integration with MarketingPilot New mobile client applications on ipad and Windows 8 tablets (Microsoft said it plans new touch-optimized mobile support for Windows 8 phones, iphones, and Android phones later in the fall) Integration of Lync, Skype, and Yammer with CRM. Nucleus will be closely watching as these capabilities are released and adopted, as they are likely to have quite an impact on both Microsoft s usability and functionality positioning in future editions of the Value Matrix. Nucleus will also be watching how the pending Nokia acquisition impacts Microsoft s investment in support of multiple mobile device platforms. Limited support for a broad range of devices has handicapped Microsoft s positioning in the past. Page 3

Few vendors give companies the option of buying anything other than per-seat CRM licenses or subscriptions today, meaning companies must either pony up for full-feature licenses that are underutilized or find another means to expose CRM data to casual users. Offering tiers of use will help Microsoft to drive broader adoption of occasional CRM users in existing accounts, driving stickiness. It will also help drive adoption of Dynamics CRM as a custom application platform (Nucleus Research n102 Microsoft announces new Dynamics CRM pricing and support options, July 2013). ORACLE CRM ON DEMAND Oracle announced Oracle CRM On Demand Release 23, released in summer 2013, which reflected Oracle s continued investment in the application s primary focus on the life sciences industry. A key focus has been enhancements in Oracle CRM On Demand Disconnected Mobile Sales for Tablets, a separately licensed native ipad application that complements CRM On Demand s Life Sciences Edition, and CRM On Demand Connected Mobile Sales (also licensed separately) with native applications for iphone and BlackBerry devices. Android and SSO support has recently been announced as well. Other advances in Release 23 included: Life sciences industry functionality, including incremental enhancements to personal content delivery and record locking. The capability to configure Disconnected Mobile Sales to integrate with CRM On Demand s automated call submission process so sales reps can view the running sample inventory count during a call; reconcile sample disbursements against actual physical sample inventory; and add, update, or remove promotional items on completed calls. Integration with Microsoft Outlook so users can manage CRM On Demand appointments, activities, and opportunities directly within Outlook. Support for the latest versions of Google Chrome, Firefox, and Android. On the social front, the ability to create a Service Request from a social post, follow up with that post through the relevant social media channel, store the full interaction, and create social profiles for customers automatically based on new social interactions. Oracle has continued to lead with Oracle Fusion CRM Sales Cloud in most market opportunities outside of the life sciences. In June 2013, Oracle and Salesforce.com announced a strategic partnership by which Oracle would integrate Salesforce.com with the Oracle Fusion HCM Cloud and Financial Cloud, which created some confusion in the marketplace, particularly where CRM On Demand and Salesforce.com are clear competitors. Nucleus expects this confusion, as well as the very targeted focus for future CRM On Demand functionality will diminish On Demand s ability to compete on functionality and usability in other vertical markets. Page 4

ORACLE FUSION CRM Oracle has continued to evolve its messaging around Fusion CRM, given both organic product development and investment and acquisitions. Most of Oracle s initial organic Fusion CRM has been focused on sales, which Oracle has now renamed Oracle Sales Cloud; Eloqua and RightNow, respectively, are increasingly being marketed as Oracle Marketing Cloud and Oracle Service Cloud. Based on these internal changes as well as the shortlist evaluations Nucleus has seen from customers in the marketplace, Nucleus is including the capabilities of Oracle Eloqua and Oracle RightNow Service Cloud (and their related integrated acquisitions) as part of its overall ranking of Oracle Fusion CRM (much as Nucleus has included other integrated acquisitions in the overall CRM ranking of other competitive vendors). The Oracle Sales Cloud includes capabilities for incentive compensation, quota management, sales catalog management, territory management, and partner relationship management. Key differentiators for the Sales Cloud include Microsoft Outlook integration, support for most smartphone and tablet devices, integrated analytics, and marketing and social capability integration. Oracle recently announced a new release of Oracle RightNow Cloud Service (Nucleus Research n119 Oracle announces new version of Oracle RightNow Cloud Service, August 2013), with a number of new features and improvements across multiple areas including: Integration of RightNow Cloud Service with the ATG Web Commerce Agent Console, to give agents one unified console through which they can assist online shoppers and complete support tasks. New mobile agent application features including more customization capabilities, better access to historical information, improved supervisor administration, and support for more languages. Analytics enhancements that enable users to quickly see which reports are being used and the impact of modifying or deleting specific reports. Service feature improvements including knowledge syndication, tools for community managers, and auto-tuning capabilities for the knowledge base. Improved policy management features for ensuring consistent rollout of policiesbased service information in regulated environments and reduce manual updating time and cost. In March 2013, Oracle announced Oracle Social Relationship Management, which is preintegrated with Oracle Fusion CRM Sales Cloud and Service Cloud and integrates Oracle Vitrue, Collective Intellect, and Involver. This combines social marketing, engagement, and monitoring into one platform so companies can listen, create, and publish content, and engage customers and analyze interactions across multiple social channels in real time. Page 5

SALESFORCE.COM Salesforce.com continues to maintain its dominant position in the marketplace with an ongoing stream of acquisitions, organic product developments, and deeper integration of existing acquisitions. It is important to note that much of Veeva Systems (also a leader in this Matrix) application capabilities are built on the Salesforce Force.com platform. With its last earnings announcement, Salesforce.com announced it was projecting its first billion dollar quarter (Nucleus Research n130 Salesforce announces plans for $1 billion quarter, August 2013). Although company revenues are not a consideration factor in this Value Matrix, obviously the availability of funds for research and development and the ability to deliver more value to customers depend on company resources. Other significant announcements since the last edition of the Value Matrix include: In September, Salesforce.com announced Salesforce Files, which enables Salesforce users to connect any file from a third-party repository such as Microsoft SharePoint, Dropbox, or Google Drive to Salesforce. The addition of third-party file support to Salesforce s existing capabilities will drive greater productivity and content sharing while making content from less-professional-grade content clouds more secure (Nucleus Research n133 Salesforce announces Salesforce Files, September 2013). The most compelling piece here continues to be the dynamic nature of Files. Because the content is linked to particular business processes and conversations, there s no need to devote admin or IT resources to culling, reorganizing, or managing versions of documents and all users can spend more time in productive work. Files is scheduled to be available in the spring. Salesforce.com announced plans to acquire ExactTarget on June 4. The largest acquisition by far Salesforce.com has ever made, this gave Salesforce.com a functionality boost in business-to-business, e-mail, and mobile marketing capabilities. It also gave the company an expanded customer base, new capabilities to sell to its existing customers, and more service and thought leadership capabilities to differentiate its CRM offering. From a functionality perspective it extended Salesforce.com s marketing cloud capabilities, both with e-mail marketing (through ExactTarget) and with a broader set of tools for midmarket companies (with Pardot) (Nucleus Research n91 Salesforce.com acquires ExactTarget, June 2013). Nucleus has had an advance view of the Salesforce Winter 14 release, which is scheduled to deliver additional capabilities that leverage Salesforce s existing investments in mobile and social capabilities, especially mobile device access for Chatter. Nucleus has also had the opportunity to analyze the experiences of a number of customers who have used Salesforce Social.com, BuddyMedia, and Radian6 capabilities to gain efficiencies while engaging customers (Nucleus Research n105, Selling social CRM to the CFO, July 2013). Page 6

VEEVA SYSTEMS Veeva Systems is a relatively new player in the Leaders Quadrant. The company exclusively targets life sciences companies and its highly customized CRM capabilities are built on the Salesforce Force.com platform, meaning that Veeva is able to take advantage of both its own organic investment and the investments of Salesforce.com in its platform to deliver more value to customers. Since the last edition of the Value Matrix, key product announcements from Veeva have included: New surveys and assessments functionality allows users to develop surveys and execute them online or by representatives in the field. Responses can be collected via multiple channels, enabling customers to more rapidly capture and analyze aggregate data and quickly act upon it. New features in Veeva s promotional materials management system make it easier for users to review and annotate promotional content such as videos. Approved E-mail ensures regulatory compliant e-mail communication between sales reps and healthcare providers, that data and information shared with customers is the most current, and that all e-mail interactions can be tracked for greater visibility and auditability. On September 11, Veeva filed to raise up to $150 million in an initial public offering of its common stock on the New York Stock Exchange. Veeva s aligment with Salesforce.com and relatively strong track record of customer wins for a young company bode well for its IPO; obviously increased investment will give Veeva greater resources to invest in product development (as well as other areas). EXPERTS Experts in this edition of the Value Matrix include NexJ, Oracle Siebel CRM, and SAP. NEXJ Toronto-based NexJ provides CRM solutions for the financial services, insurance, and health care industries. NexJ s approach is to integrate customer and transaction information from multiple applications and data sources into an integrated desktop that provides a complete view of customer interactions and increases the knowledgeability and productivity of CRM users. ORACLE SIEBEL CRM Oracle Siebel CRM continues to enjoy an extensive installed base, and Oracle has continued to make investments in increasing the usability and total cost of ownership of managing Siebel applications. Page 7

In April, Oracle released the latest version of Oracle Siebel Loyalty Management to help companies develop differentiated loyalty strategies with built-in best practice capabilities, theme-based clubs, a graphical promotion designer and recurring awards. The release also included integration with Oracle applications including Collective Intellect, Vitrue, Involver, ATG, and Oracle Knowledge. However, the lack of new customer wins compared to the acquisition pace of other competitors and the fact that Nucleus has seen an increasing number of customers consider third-party maintenance suggests that Oracle will continue to balance delivering on the demands of existing Siebel customers while driving customers to consider Fusion CRM s capabilities. SAP The deep industry-specific capabilities of SAP s on-premise CRM offering, as well as its marketing, sales, and service capabilities, have earned it a solid position in the Experts Quadrant. Nucleus has seen many existing SAP CRM customers take advantage of SAP HANA to better integrate and analyze multiple sources of customer data. However, Nucleus has seen few net new customers for SAP s maturing on-premise CRM applications, with most of SAP s investment and energy focused on SAP s cloud-based CRM solutions. FACILITATORS Facilitators in this edition of the Value Matrix include Aplicor, Infor Epiphany, InfusionSoft, NetSuite, SAP Cloud, and Sugar CRM. APLICOR Aplicor s Cloud Suite provides CRM and business management capabilities for mid-sized businesses to support marketing, sales, service, order management, inventory management, and financial management. Aplicor s star appeared to be rising a few years ago as a provider that could provide both strong configurable CRM capabilities and integrated financial and order management capabilities. However, as NetSuite and Microsoft have gained momentum and other players at the low end of the market such as Infusionsoft have gained both customer momentum and partner bench strength, Nucleus expects Aplicor will face increasing challenges. INFOR EPIPHANY Infor Epiphany is the only provider in this Matrix that is focusing more on offerings for marketing than for sales and service; thus its position as a Facilitator and not a Leader in the Matrix. However, Epiphany is included in the Matrix for two main reasons: Infor s investment in user design and usability that place Epiphany at the top of the usability ratings. Page 8

Epiphany s Customer Interaction Hub is increasingly integrating transaction data from other CRM systems, and delivering information for decision making to the desktop for users beyond marketing. In August, Infor announced Epiphany Digital Multi-channel Marketing Solutions 10.0.3, which provides a native Hadoop connection, an improved user interface, and Ming.le for social collaboration. Although Epiphany has always been strong in its ability to handle multiple channels, this release drives greater user productivity and more rapid execution on diverse and large data inputs. It will also be available in the cloud, providing customers with more cost-effective deployment options (Nucleus Research n117 Infor announces new version of Epiphany, August 2013). INFUSIONSOFT Infusionsoft s focus in on helping small businesses attract, grow, and build customer relationships. An intuitive and easy-to-use application that provides CRM, marketing automation, and e-commerce capabilities within one user interface, Infusionsoft recognizes that in many small businesses users have to wear many different hats. Building on a significant investment by Goldman Sachs in the beginning of 2013, Infusionsoft has continued to grow its customer base as well as its partner network of experts that provide both thought leadership and vertical expertise for small businesses. The company released its Spring release in March with social marketing features, pre-built campaigns, in-application training, and other capabilities to help its customers accelerate time to value from their Infusionsoft investment. NETSUITE NetSuite continues to maintain a strong position as a Facilitator in the Matrix. The reality is that few, if any, customers choose NetSuite if they are only looking for CRM. Companies primarily choose NetSuite because its single database approach that integrates CRM functionality with order management, financial management, inventory management, and e-commerce, which drives broader benefits across the business. NetSuite has continued to improve its core CRM capabilities while expanding its broader business suite functionality. SAP CLOUD FOR CUSTOMER SAP Cloud for Customer (formerly named SAP CRM On Demand) includes Cloud for Sales, Cloud for Service, and Cloud for Social Engagement, as well as social collaboration, social media analytics, and marketing capabilities powered by SAP HANA. SAP is continuing to build out functionality in key areas, but is also focused on usability with ERP integration, support for mobile devices, and Microsoft Outlook integration as key selling points to help sales users, for example, be more productive more quickly. Page 9

Compared to its cloud competitors, SAP has been relatively quiet in touting the advantages and capabilities of the SAP Cloud CRM solutions. However, given SAP s strong customer installed base and the need of many of those customers to adopt cloud CRM functionality to replace existing solutions or address new CRM needs, continued innovation, particularly around HANA (Nucleus Research n84 SAP HANA and Data Services ROI case study SAP, May 2013), make SAP a force to be watched in the CRM marketplace. SUGARCRM SugarCRM is an open source-based CRM application. It is available in four editions: Sugar Professional, Sugar Corporate (which includes Sugar s offline mobile client), Sugar Enterprise, and Sugar Ultimate. In April, SugarCRM previewed Sugar 7, designed to help companies better understand the needs of individual customers, empower users across the organization to engage successfully with customers, and deliver a consistent experience for both customers and users. In August, SugarCRM announced the completion of a $40 million equity investment by Goldman Sachs & Co., which it plans to use to further expand its global reach and increase engineering investment in its products (Nucleus Research n118 - Sugar raises $40 million, August 2013). Nucleus expects this investment will help SugarCRM accelerate its development capabilities as well as its ability to attract new customers, and will be watching closely as version 7 is rolled out and adopted. CORE PROVIDERS Core providers in this edition of the Value Matrix include BPM Online, CRMNext, Maximizer Software, Sage CRM, Swiftpage SalesLogix, and Zoho. BPMONLINE UK-based BPMonline differentiates its CRM offering based on its powerful business process designer and business process management capabilities, as well as its consumergrade user interface. In June, the company released BPMonline CRM 7.0 based on the company s latest BPM platform. This release represented a significant investment in creating a more intuitive user interface, reflecting the company s recognition of the consumerization of IT. In looking at the application, Nucleus found that it was fairly intuitive for users to design and change business process workflows. Although the application supports smartphones and tablets, today the mobile versions are virtually the same as the desktop application, which limits users ability to take advantage of the specific form factors of smartphones and tablet devices. However, Nucleus expects competitive pressure and customer feedback will likely drive BPMonline to reconsider this strategy. Page 10

CRMNEXT CRMnext provides sales management, service management, marketing management, knowledge management, social CRM, and reporting and analytics with industry-specific functionality for 11 verticals including banking, insurance, financial services, pharmaceuticals, media, and telecommunications. CRMnext provides both public and private cloud delivery options using the same code base. Other capabilities of CRMnext include: The BusinessNext platform supports custom application development with pre-built core applications including Intelligence Studio for BI, Campaign Manager, Process Management, and Statistics Server for statistical modeling. A Web service interface supports integration with different systems, with specific capabilities to support e-mail client and Outlook integration and integration with inhouse applications and data warehouses. The Mobility platform enables customers to build their own custom mobile applications and also supports short code management for providing CRM updates via SMS. In the spring, CRMnext announced several product enhancements including advanced mailing list functionality and advanced merge rules and data deduplication capabilities. Although its parent company, Acidaes, was founded in 2002, CRMnext has largely flown below the radar in the North American and European markets. This is CRMnext s first appearance in the Value Matrix and Nucleus will continue to evaluate its positioning as the company seeks to extend its penetration beyond Asian markets. MAXIMIZER SOFTWARE Maximizer Software provides CRM predominantly for small and medium-sized businesses and positions itself as a full-featured application at a very competitive price point. The application is offered both on premise and in the cloud and is available in three versions: Maximizer CRM Group for one to 10 users with core functionality; CRM Enterprise which includes features including offline access, territory management, and quota management; and CRM Cloud. On June 25, Maximizer announced a partnership with Hubspot, to integrate Hubspot s inbound social marketing software capabilities with Maximizer and streamline the flow of leads through the qualification and nurturing process. The partnership also includes a referral agreement, which will enable Maximizer to take advantage of HubSpot s sales presence and customer footprint. On July 9, Maximizer announced availability of Maximizer 12 Summer 2013 with support for on-premise, public, and private cloud delivery options. Other features of the version include enhanced search capabilities, support for more contextual activities, and new userdefined field configuration and rule-base mandatory fields for directed processes, all of which are designed to increase usability and productivity while driving consistency across Page 11

processes. Maximizer also announced improved e-mail marketing and targeting capabilities and improvements to Web accessibility functions that can be optimized for smartphones and tablets. SAGE CRM Sage provides a CRM solution which is optimized for small and medium-sized businesses. In analyzing the experience of customers, Nucleus has found that the competitive price point, ease of configuration, and relatively seamless integration with Microsoft Outlook and SharePoint are key reasons why customers choose Sage over competitors (Nucleus Research n103 Sage CRM benefit case study Anonymous, July 2013). In an increasingly noisy CRM marketplace, Sage has often been somewhat quiet about its capabilities. That, and the changes in Sage s CRM portfolio, have driven many emerging players to campaign against the Sage installed base, particularly in cases where companies did significant customizations and are not on the latest version of the software. Nucleus is seeing Sage less frequently on competitive shortlists than it did a few years ago; from a purely marketing perspective it would behoove Sage to be more vocal about new customer wins and, in particular, the product strengths that drive customers to choose Sage. SWIFTPAGE SALESLOGIX Swiftpage completed its acquisition of SalesLogix from Sage in March 2013 and has undertaken a pretty significant rebranding effort, focusing on usability, flexibility, and managing customer relationships as key marketing points. Today, SalesLogix capabilities include: Multiple deployment and financing options including cloud, on premise, and hybrid. Support for Android, iphone, ipad, BlackBerry, and other mobile devices at no additional charge. The ability to integrate with other business management applications, desktop productivity tools, Web services, and social media. The ability to configure and customize SalesLogix to meet specific business needs and drive greater productivity. In June, Swiftpage announced a new version of its software for mobile users, compatible with the latest HTML5-based Android, ios, Blackberry, and Windows phones. Features include full mobile attachment support including camera support, an activities view to help users track tasks, mobile search capabilities, a global menu for rapidly finding information, and multi-currency support. New capabilities, Swiftpage s breadth and depth in social and digital marketing solutions, and the company s partner strategy bode well for SalesLogix; however, Swiftpage still has to do some catching up to show how its acquired software and investment delivers more attractive value for customers than the old SalesLogix. Page 12

ZOHO Zoho continues to compete at the low end of the market for customers that are seeking core CRM functionality at a very aggressive price point. Key announcements adding to Zoho s capabilities since the last edition of the Matrix include: Zoho Pulse (a private social network for business collaboration) and Zoho Vault, an online password and credentials manager, launched in May. Zoho Survey, launched in July, to help users create online surveys and collect feedback. Integration of Zoho Docs with Dropbox, so users can synchronize all of their Zoho docs files across all their devices with Dropbox. Over the years, Zoho has launched significant functionality outside the CRM space including tools for project management, recruiting, sites, productivity applications, and the like. However, Nucleus has found that Zoho CRM customers often face significant usability challenges without making an investment in streamlining the application and configuring it to meet their specific CRM needs. As such, Zoho is priced as a commodity player in the market and will likely fall in future usability rankings in the Matrix without a greater investment in user interface and more intuitive tools for streamlining the application. Page 13