Yesterday, in our first look at Gartner’s Magic Quadrant for Sales Force Automation (SFA), we saw that there is growing interest, and use, of SaaS deployments. This is coupled with an ongoing discussion about the best mobile strategies and what SFA applications fit in with what kinds of business. Let's now take a look at who made the leaders quadrant and why.
Gartner MQ SFA Criteria
The leaders consist of Microsoft, Oracle, Salesforce and SAP. Unusually for such an important MQ, there is only one contender in the Challengers Quadrant, NetSuite, along with a bunch of established players in the Niche Quadrant, and then SugarCRM and Oracle Sales Cloud in the Visionaries Quadrant.
There are also a large number of vendors that Gartner is following that did not make it in at all as they cater for a specific region, or provide particular functionality.
To be included in the MQ in the first place, vendors must be able to show:
- Proven ability to deliver a sales management system that has been released in the past 18 months.
- At least five new customers that have deployed opportunity management over the past year.
- Use of B2B opportunity management in at least three different industries.
- At least US$ 15 million in annual revenues.
- Customers in one of the following regions: North America, EMEA, Latin America or Asia/Pacific.
MQ SFA Leaders’ Quadrant
While this may be tough, to get into the Leaders’ Quadrant is even tougher again. Vendors must be able to show that they have a market-defining vision of how technology can help sales teams achieve targets using the vendor's products or services.
They must also be able to demonstrate that their business is solid and that they have a feasible business strategy for moving forward. Also key are solid revenues and earnings, as well as significant and successful deployments in North America, EMEA (Europe, Middle East, and Africa) and Asia/Pacific, with multiple deployments that cater to 500 users or more.
In alphabetical order the Leaders are:
Microsoft (Dynamics CRM)
Microsoft offers Microsoft Dynamics CRM both online and on-premises, which are essentially the same product, but with different release cycles. The growth of the online version corresponds with Microsoft's general strategy of trying to move users of many of its applications to SaaS models.
According to Gartner in this case, the on-premises version is generally examined at enterprises looking for better Total Cost of Ownership (TCO) over cloud offerings, as well as those looking to use the rest of the Microsoft stack, and to avoid privacy and real-time integration issues.
- Strengths: It integrates with the rest of the MS stack offering the possibly of SharePoint integration for collaboration and content management. It also comes with a new process UI that significantly improves the user experience, while a broad partner network provides a wide range of add-ons and industry vertical expertise. It can also work with the SaaS version.
- Caution: Smartphone (target release Q4) and iPad/Windows 8 tablet (target release Q413) have yet to prove themselves in the field. Non-Microsoft IT organizations need to improve their Microsoft stack to get advanced functionality, while Microsoft itself needs to improve its ability to prove value. As releases are every year, as opposed to twice a year for the online version, there may be a time lag in receiving updates.
Microsoft (Dynamics CRM Online)
Microsoft online continued its momentum in 2012 in organizations with sales teams of more than 500 starting to consider investing. The only difference with the on-premises version from a point of view functionality is the twice per year life cycle.
- Strengths: The new process-centric UI has also been introduced in the SaaS version, while there is also a common data model with the Dynamics CRM on-premises offering. Its pricing remains at the middle-to-low end of the pricing model.
- Cautions: Its reporting and analytics abilities are not as flexible as the on-premises version and it does not supply a development sandbox, which is a problem for those that want to test configuration changes prior to production in the cloud. However, with the Polaris release users can buy additional instances for testing.
Oracle (Siebel CRM)
The Oracle Siebel CRM offering is suitable for complex on-premises deployments and will remain so for the foreseeable future. It continues to have the broadest set of functions on the market, with most customers buying it because they want to get their functionality from a single vendor. In the past year, it has released Open UI to cut its dependency on Active X and IE, while the release of its Connected Mobile App means it is compatible with any HTML5 device.
- Strengths: It has proven, deep and broad sales functionality and can be used across many difference verticals. Flexibility and customization abilities are key features, while users have Oracle Business Intelligence for analytics and reporting. The user experience has also been improved compared to earlier versions.
- Cautions: The new UI is still being evaluated by customers, even if some have already given it a positive review. Deployment complexity is a problem, while the functional richness and associated costs put it out of the price range for most SMBs. It offers private hosting for Oracle Siebel CRM, but markets Oracle Fusion CRM as its SaaS offering.
Undoubtedly the daddy of them all, Salesforce.com continues to lead the SFA market, even if its products remain expensive. It is picked by most customers because of its strong brand, usability and proven track record. It has a strong ISV ecosystem, which fills out perceived, functional white spaces.
- Strengths: It continues to stay ahead of the innovation curve with ongoing developments of its social media technology, Chatter and mobile offerings. Its applications demonstrate high levels of agility due to the ease of use of Force.com, while it also offers a proven, reliable infrastructure.
- Cautions: Gartner warns customer to check their licensing agreement to ensure that they are not paying for services they don’t need. It also points out that while simple, real-time reports and dashboards are easy to create, for more complex analytics they will have to go to an AppExchange partner. Salesforce, Gartner says, relies on AppExhcnage partners to provide full SFA.
Gartner says that SAP CRM is the most prevalent of SAP's applications across its customer base for extended applications. The company itself continues to put in strong performances, but has difficulty outlining its vision in the field.
- Strengths: It is able to provide real-time integration between SAP CRM and SAP ERP. Its reference vendors cite integration between its NetWeaver Business Intelligence and SAP BusinessObjects as a real plus. It offers a wide range of functionality.
Cautions: According to Gartner, server-side integration is functional, but needs more bi-directional behavior, while integration with Outlook lacks automation. Managing cost and dependencies on other SAP middleware is a problem. Gartner also points out that SAP CRM and SAP Customer OnDemand are not the same and that migration may be difficult.
Just outside the Leaders’ Quadrant there is a single Challenger vying for position. Challengers have the size to compete worldwide, but possibly not as well in some geographies as in others. They understand the evolving needs of sales organizations, but do not lead customers into new functional areas. They have a good technology vision for architecture, but have yet to win over top sales executives.
Over the course of 2012, NetSuite has reported substantial growth with revenues of US$ 308 million for the year. Most of its income, though, is related to ERP/financial accounting offering. That said, its SFA offering remains an attractive prospect for small- or midsize-businesses (SMBs), or divisions in larger companies. It has yet to show strong market-presence in SFA-only deployments.
- Strengths: It continues to grow while its public company status provides transparency into its business dealings. It also continues to build its functionality to include different aspects of sales performance management, while the maturity of the Suite shows an understanding of a sales organization’s needs. Easy customization and configuration enables its product to be tailored to specific sales organization’s needs.
- Cautions: It continues to focus on SMBs so more sophisticated functionality has not really evolved. It has been slow to develop mobile functionality while its focus is still on financial accounting and other ERP related processes, not CRM and SFA.
And that's the Leaders and Challenger. However, there is a lot more in this report, especially in the Niche Quadrant, so well worth taking a look at.