Our first look at Gartner’s Magic Quadrant for CRM Customer Engagement Centers (CEM) showed a market littered with obsolete business applications. However, the three vendors in the Leader’s Quadrant -- Oracle RightNow Cloud Services, Pegasystems and Salesforce -- appear to be bucking that trend.
Three other vendors in the Challengers quadrant -- Oracle (Seibel), SAP and Microsoft -- are jostling for a spot in the Leaders' Quadrant.
MQ for CRM CEC
There are 13 companies across the Magic Quadrant which, even if it is not as competitive as others we have looked at in the past, still has a stringent set of requirements for entry that keeps all but the most determined out.
The research shows a market restricted by applications characterized by weak native cloud architecture. They also have poor social media engagement abilities, poor collaboration abilities and are generally restricted by inflexible configuration rules that make them difficult to improve.
However, the potential market for these applications is huge and as SaaS make these kinds of systems easier to deploy, the market will likely expand in coming years.
Gartner says that by the end of this year 75% of CECs will be sourcing some elements in these suites as SaaS, but only 20% are choosing SaaS models for complex business processes.
It is the complexity of these systems that is one of their big drawbacks, with a high level of functionality required even at a basic level. A complete CEC solution should contain:
- Customer service and support (CSS) problem management, trouble ticketing and case management
- Knowledge solutions, content management, advanced desktop search
- Decision support based on real-time analytics
- Engagement possibilities through social media
- Support for the mobile customer
- CRM databases containing all customer information including offer and account information
- Real-time feedback surveys
- Technology to support and extension to cross-channel customer services, including mobile and social media.
CEC Leaders’ Quadrant
Those that made it into the Leaders’ quadrant demonstrated a market-defining vision in the CRM CEC space and provided a wide range of functionality across multiple geographies and verticals.
Gartner points to significant Return-On-Investment for clients of these companies and notes all possess a clear grasp of the impact of business rules and social networking on customer service requirements. In alphabetical order, they include:
Oracle (RightNow Cloud Service)
Oracle bought the Oracle RightNow Cloud Service as part of the RightNow acquisition in early 2012. Its technology continues to be integrated into the Oracle stack, but here it provides a cloud offering for those looking for a customer service solution with a SaaS model.
- Strengths: The acquisition by Oracle lead to greater scalability while its Oracle base means there are many other technologies that can be brought into the mix. It provides cross-channel customer service in the contact center and Web self-service, and has a strong presence in government agencies, eduction and retail. It does not focus on industry-specific processes.
- Cautions:The functional components are still under development with a number of other Oracle add-ins that may create complexity. Gartner also says that organizations with a heavy Microsoft dependency may face resistance from their IT departments. The report states Gartner has received a number of enquiries from customers concerned about where the transition to Oracle will leave them.
License revenues at Pegasystems grew by 18% to US$ 461 million in 2012 as its solution filled a lack in the market for stable, modern solutions that include business process management as part of the customer interaction.
- Strengths: In the CRM space overall, Pegasystems offers the best set of abilites on the market at the moment to model and predict customers' behaviour, create workflows and follow up on actions with customers. It expanded the reach and depth of its professional service partner network and developed industry-specific best practices as well as prebuilt templates. It is highly scalable and provides good support.
- Cautions: IT-driven enterprises do not like Pegasystems’ BPM-model based approach. It has less multi-industry experience outside North America and the UK. It also needs to demonstrate its vision for mobile device support.
Last year, Salesforce grew 37% from the previous and exceeded US$ 2.25 billion in revenues. Gartner says 60% of the new revenue came from the Service Cloud line making it the biggest vendor measured in sales volume. However, it is not a leader in complex B2C service.
- Strengths: The Service Cloud is recognized as the de facto shortlist product by US and Western Europe enterprises. Key new customers have invested more than US$ 10 million per year as they retired homegrown systems and systems from competitors that were at the end-of-life. It provides an excellent UI, simple design tools, intuitive navigation and a good understanding of Web communities. There is a big draw to the customer portal, partner portal, social media monitoring and the Salesforce Ideas products.
- Cautions: Some clients have told Gartner that in instances when they set up Salesforce.com in multiple parts of their organization, it resulted in a number of Salesforce.com deployments with different workflows, tables and customer objects all of which may need rationalization. References say pricing for large deployments is not transparent. It has limited Asian, South American or Eastern European presence.
CEC Challengers’ Quadrant
The Challengers are not hugely different from the Leaders. They need to be able to demonstrate a high volume of sales in their chosen markets and understand customers’ evolving needs.
They have a strong market presence in some application areas but have not demonstrated a clear understanding of where the CEC market is going. They often do not have a worldwide presence, and while they may fulfil the criteria for inclusion in the Leaders’ quadrant, thier lack of a cloud or SaaS offering has kept them out.
The Microsoft product here falls under the Dynamics umbrella in the shape of CRM for CSS, which continues to be deployed as an on-premises suite, with the real value found in supporting customer requests for information.
- Strengths: Includes strong attributes like built-in workflows, a highly regarded SDK and good customization abilities. Its shown continued improvement to the user interface for standard tasks. It also integrates with many other Microsoft products.
- Cautions: Clients mention concerns over a lack of trained professional services partners that understand the suite, while Microsoft has not briefed Gartner on support capabilities. A multitenant cloud version has yet to emerge.
More than 7 years after Oracle bought Siebel, the Siebel Contact Center and Service product is still being sold and maintained. It has a broad range of functionality and is a standard for large-scale call/contact centers.
- Strengths: Remains the only large-scale product being used globally by large enterprises in B2B and B2C industries. The acquisitions and native developments that are part of the Oracle Social Relationship Management product lines will give Siebel more possibilities for social media management. It has global software support.
- Cautions: Users say they still find it counterintuitive and complain the interface is outdated for the current crop of customer service agents. There are no plans for a cloud model. It is neither best in class for mobile customers looking for in-line support nor best in class for peer-to-peer communities connected with customer service processes.
The SAP Customer Service has the advantage that is often bundled into a more comprehensive SAP licensing deal, making it attractive to some clients. There is substantial growth of the reference base for B2B support, but less evidence of it in the B2C space.
- Strengths: Apart from being a strong and profitable company, it is developing the product and partnerships so that by Q3 in 2014 there should be considerable functional improvements. SAP's marketing of an integrated business application suite is compelling to clients from an IT and line-of-business perspective.
- Cautions: It lags market requirements for a proven scalable CEC application suite in all of its geographic regions. It has not kept pace with market demand for advanced real-time decision solutions, content aggregation and delivery of knowledge management.
Title image courtesy of Lonely (Shutterstock)