A Report Card for CRM Market Predictions

Two years ago, the leading CRM analyst/consultant Barton Goldenberg identified eight major trends that were affecting the business functional evolution of CRM systems. Since many sales managers depend upon Goldenberg’s advice, let’s review his predictions and give him a report card:

PREDICTION: Increased consolidation and mergers among CRM vendors
HIS EXPLANATION: “The recent acquisition of PeopleSoft by Oracle will encourage consolidation among CRM software companies as multimillion-dollar CRM enterprises will see other acquisitions as necessary to survive in an increasingly competitive CRM market.”
WHAT ACTUALLY HAPPENED: Oracle went on to purchase Siebel Systems, essentially limiting the competition at the enterprise/ERP level of CRM to two vendors. A number of smaller vendors have been purchased and consolidated.
GRADE: A+

PREDICTION: Increasing CRM focus on the small to mid-sized business segment
HIS EXPLANATION: “Because larger companies are scaling back their IT purchases in the short-term due to the current economic downturn, the SMB market (defined as companies with less than $500 million in annual revenues, or alternatively 20- to 150-person size companies) has become increasingly attractive. ”
WHAT ACTUALLY HAPPENED: SMB became the market growth engine of choice for CRM vendors. Almost every vendor, including Microsoft, now has a plan to capture the SMB market, which is proving resilient to any attempt at standardization.
GRADE: A

PREDICTION: Increased number of CRM offerings for specific vertical industries
HIS EXPLANATION: “As the CRM software market becomes increasingly competitive, vendors are increasingly segmenting the marketplace and focusing on vertical industry niches.”
WHAT ACTUALLY HAPPENED: The number of vertical offerings increased, but not to any great extent, since vertical industry knowledge tends to be slim inside CRM vendors. Customization is still more common than the use of vertical industry CRM packages.
GRADE: B+

PREDICTION: Increased use of analytical tools (e.g., predictive modeling) in CRM solutions
HIS EXPLANATION: “Analytical tools now exist to predict the monetary value and profitability of a particular customer, to profile customers based on their behavior, to segment markets, to predict customer purchases based on past purchase information and psychographic/demographic data, and to determine cross-selling opportunities.”
WHAT ACTUALLY HAPPENED: There have certainly been some entries into this segment, but widespread adoption of this kind of marketing technology is lagging due to the inability of many organizations to integrate the technology that they’ve already purchased. In other words, there were more offerings, but usage hasn’t spiked radically upward.
GRADE: B

PREDICTION: Increased number of mobile CRM offerings and a move toward Real-Time CRM
HIS EXPLANATION: “CRM vendors continue to develop and release CRM application modules that are bundled with or work on a large variety of handheld and/or wireless devices including PDAs (with various operating systems), and WAP-enabled phones.”
WHAT ACTUALLY HAPPENED: Adoption of mobile CRM solutions has been limited by the telecom industry’s focus on providing communications to cell phones, a device that’s inappropriate for many CRM tasks. That’s limited the update on mobile CRM.
GRADE: A-

PREDICTION: Increased CRM offerings via the Application Service Providers model
HIS EXPLANATION: “The ASP model can circumvent traditional problems with the client-server model: high prices and cumbersome deployments.”
WHAT ACTUALLY HAPPENED: The CRM vendors, en masse, have adopted the ASP model, even for programs that were well ensconced in traditional data center computing.
GRADE: A+

PREDICTION: Increased availability of customer survey management tools
HIS EXPLANATION: “The ability to manage customer or prospect survey projects and receive feedback on company service or products, [will lead] to a better understanding of customer/prospect needs and desires.”
WHAT ACTUALLY HAPPENED: This has turned out to be more of a backwater application than a major trend. While there are some offerings, they remain relatively obscure.
GRADE: B-

PREDICTION: Increased availability of employee compensation management tools
HIS EXPLANATION: “The ability to better manage and track staff compensation [is] in line with company needs and market trends.”
WHAT ACTUALLY HAPPENED: This type of application is indeed becoming a more common offering from a number of different vendors. Since compensation is such an important part of the sales process, our sense is that the uptake of this kind of technology is brisk, considering that it’s a relatively new idea.
GRADE: A

Bottom Line: Goldenberg is on the “honor roll.” Considering that these predictions were made two years ago, when many of these trends were in their very early stages of development, his ability to predict trends is rather remarkable.