Jive, Salesforce & Lithium Lead Gartner's Social CRM Magic Quadrant

By Chelsi Nakano (@Chelsi) Aug 1, 2011

In the midst of an exceedingly hot and volatile environment, Gartner has updated its Social CRM Magic Quadrant, naming three vendors that have managed to keep their heads above water.

The Social CRM Market

Because most of us are still trying to find a comfortable place in the social movement, Gartner says social CRM is still mainly treated as a series of experiments and tactical purchases. Today, very few have a stable social CRM strategy or established metrics to measure its effect on hard business results.

The research company says this lack of consistency keeps the market fragmented into at least three segments:

Sales
Marketing
Customer Service

Accordingly, many smaller vendors are building their applications around one area or use case, but Gartner says if you want to be a vendor that survices, addressing multiple use cases in more than one department is crucial.

From a numerical POV, spending on social software for marketing, customer service and sales increased by 40% in 2010, but social CRM remains less than 5% of the total CRM application market. Considering this rate and other factors, Gartner expects the social CRM market to reach over US$ 1 billion in revenue by year-end 2012

Community: The Key Trend

Because benefiting the customer is one of the top new priorities, Social CRM applications are naturally built to be far more customer-centric than their more traditional predecessors. Tools and processes incorporate a range of engagement levels and the focus shifts from direct customer management to relationship management. For example, engaging customers, partners or prospects in the following processes:

Codeveloping new products or services
Generating brand awareness
Aiding information gathering and evaluations
Offering price comparisons
Assisting the selling process

These benefits encourage users to willingly participate in communities, which in turn drive success.

In addition to exhibiting an eye for community, Gartner's top social CRM providers met the following minimum inclusion requirements:

The primary use and marketing of the application must be toward sales, marketing and customer service support users and/or customers, prospects and partners of the organization.
The vendor's social CRM product must have revenue above a minimum of $10 million
The vendor must have had a 30% revenue growth rate or higher in 2010
The vendor must have at least five client references from 2010 that Gartner can talk with that are in live production use of the product

And so without further ado, the leaders:

Jive

Founded in 2001, Jive (news, site) has had a ton of fast success in recent times, and currently holds the most public profile of Gartner's featured social CRM vendors.

Strengths: Jive has gone beyond internal and external social collaboration and stepped into connectors territory to integrate Facebook, LinkedIn and other public social sites. The company has also recently stepped up its partnerships game to include Accenture, CSC, Deloitte, Infosys and Logica. Even further, Jive's numerous acquisitions — Proximal Labs, Filtrbox and OffiSync — indicate a strongly buttressed vision.
Cautions: Jive is a fairly young and small company by the standards of enterprise software. It has struggled for some time now in its attempt to expand European presence, and could be impacted more than smaller "point solution" vendors if a major infrastructure software or hardware vendor enters the market.

Salesforce.com

Salesforce.com (news, site) is recognized for raising execution through the acquisition of Radian6, as well as aggressive promotion and pervasive distribution of Chatter.