Earlier in the week, we took a look at Gartner’s Magic Quadrant for Customer Service Contact Centers and found that business applications for the customer service and support (CSS) were obsolete in many cases. Today we will take a look at the companies that made it into the Leaders Quadrant.
What Makes a Leader?
Leaders, according to Gartner, are those that demonstrate a market-defining vision and then ability to execute against that vision through products, services and demonstrable sales figures. The vendor does not necessarily drive a customer toward vendor lock-in, but provides openings to an ecosystem. And they also have to demonstrate at least US$ 50 million in sales.
Given that we have seen that Gartner has been quite caustic about this market, it might not be such a hot market to be Leader in, although in fairness it does say that some vendors are developing rapidly in this area. Just to recall exactly what Gartner said:
The established business applications for the CSS function are largely obsolete. They are simplistic and restricted by inflexible configuration rules and procedures that govern the input, retrieval, and flow of data and information. They support collaborative interactions poorly.”
The market, Gartner said, is characterized by acquisition and integration as an interim strategy until they work out the importance of social CRM i.e. it’s a market that is still trying to find its way.
Vendors With Vision
So what does Gartner say about completeness of vision? There are a number of aspects to it, and worth noting, as it is these elements that companies list below are providing. They include:
1. Market Understanding: Demonstrates a strategic understanding of CSS opportunities that may include new application functionality, evolving service models or in-one analytical capabilities
2. Market Strategy: Well-articulated strategy including sales and distribution plan, internal investment priorities, partner alliances and timing
3. Product Strategy: A componentized offering and functionality across several service models
4. Business Model: The company should have a strategy to appeal to its key vertical industries enabling it to integrate with systems unique to an industry
5. Innovation: Understands major technology/architecture shifts in the market and communicates a plan to use them
6. Geographic Strategy: Understands the needs of at least three major markets, and has a vision of the global market
There are five different providers that effectively met these criteria over the course of the past year and are likely to meet the criteria again going into 2013. In alphabetical order they are:
The Dynamics CRM 2011 product is used primarily in non-traditional CSS environments where its value may be in supporting a customer request for information. Its flexibility in many verticals and scenario make it a good shortlist product.
- Strengths: Deployed by a skilled professional services team, it has powerful capabilities such as built-in workflows and multichannel process integrations. The user interface has been improved while integration with SharePoint and Office are big advantages. The latest release has business intelligence features. It also has a wide global reach of partners for professional services.
- Cautions: Gartner says Microsoft does not yet provide industry-specific templates for CSS product lines and relies on partners to do so. It also says the SaaS version is not mature enough for complex contact center environment, nor is it best in class for real-time decision making, knowledge management, mobile customer service or online Web communities.
Oracle (RightNow Technologies)
RightNow Technologies was bought by Oracle early this year and its products are in the process of migration to be part of the Oracle stack. The principal product is called Oracle RightNow CX Cloud Service.
- Strengths: It has a more significant base of Web CSS using capabilities such as knowledge management, chat and email as well as the other desktop applications. It continues to develop its product and connect with Oracle, while the buy-out will enable better scalability. As a SaaS model, it is straightforward to set up, and has a high presence across verticals such as government, retail, education and travel.
- Cautions: It will take time to gain sales and marketing momentum after the acquisition outside the Oracle installed base, and Garter says it has not seen any large deployment or configuration teams from the latest system integrators. RightNow built its products on the Microsoft .NET client, the open-source MySQL database and Red Hat Linux so migration to Oracle will take time. It also lacks on-premises.
The addition of RightNow Technologies to the Oracle CRM product line shifts the focus of the Oracle (Siebel) product. Siebel has still near-term viability even as it moves to Fusion. Currently, it has broad functionality and a wide partner ecosystem.
- Strengths: At the moment, it is still the only large-scale CSS product deployed globally by large enterprises across B2B and B2C industries. It has global software support and distribution and professional services for multiple industries. Oracle continues to add enhancements to v.8.1.x and v.8.2.x product lines as well as extending integration areas. Upcoming agile development and better interface will energize it.
- Cautions: Most large deployments Gartner saw in 2011 were upgrades from earlier versions. Despite its stability, users experience performance degradation if the database isn’t carefully maintained. The Siebel CSS product is not best-in-class for providing a P2P community software option (social CRM) tightly connected to the customer service process. For smaller centers with fewer than 250 seats it may be too complex.
Pegasystem grew by around 25% last year, hitting US$ 415 million in revenue as it deepened its number of SI partners and focus on customer-facing business processes. It continued to develop its competitive differentiation around case management, and business process design.
- Strengths: It has been savvier about using tools such as Facebook and corporate websites to improve workflow for its users and delivers industry-specific best practices around insurance, financial and healthcare with prebuilt templates. Highly scalable in an integrated environment with 99.95% uptime.
- Cautions: Its mash up and model-based approach has alienated some IT-driven organizations and where industries are looking for a rule engine to drive consistency, it may not be the ideal choice for a shortlist. Outside of the US and the UK, it has limited multi-industry experience.
Salesforce’s Service Cloud is the fastest-growing product line at the company, accounting for more than 30% of new subscription revenue. It is a clear leader in the market, Gartner says, although multinational CSS is still a challenge for this cloud.
- Strengths: It is the largest and fastest-growing software solution solely focused on customer engagement. For B2B operations, Service Cloud is the de facto shortlist product, with key new customers investing more than US$10 million per year. The CSS product has a great GUI, simple design tools, intuitive navigation and a good understanding of the importance of Web communities.
- Cautions: Enterprises using multination CSS have noted ongoing speed problems and performance issues. It has yet to really prove itself in large complex retail B2C contact centers, and has very limited Asian, South American and Eastern European presence in large-scale CSS. It lacks real-time analytics and needs a more unified BI layer.
This, of course, is only the summary of the Leaders Quadrant and doesn’t’ take into account Visionaries, Niche Players -- of which there are quite a few -- and Challengers.
Like all its other Quadrants, Gartner recommends looking at all the vendors in all the quadrants as there may be things that suit particular cases that are not necessarily available in the Leaders Quadrant.