Aberdeen Glimpses Future of SMB CRM Market

By Heather Baldwin

Understanding the dynamics of the small- and mid-size business (SMB) market for CRM applications means understanding what partners – defined as businesses or distributors that sell, install and provide services for a variety of SMB applications and technologies – are thinking about the industry, says a new report by Aberdeen Group. Because these partners essentially control access to the huge number of companies that make up the SMB market segment their opinions and plans, say the researchers, “are key to understanding which applications and application providers are likely to see success in this market.” The report, “Mainstream CRM: Through the Lens of the Partner Channel,” highlights what these partners believe to be their key issues and the challenges CRM vendors face when attempting to recruit these partners to their camp. Here are some of the report’s notable findings.

1. Microsoft dominates. Partners responding to Aberdeen’s survey were asked to select the three providers of CRM application software they thought would be most instrumental in their ability to generate revenue from the sale and support of CRM, and then to rank the three vendors in order of importance. “The surprise from these findings is clearly the dominance of Microsoft’s MS CRM product and its perceived ability to generate revenue for the partners over the coming months,” says Aberdeen. “Although perception does not always translate into reality and financial success in the market, Microsoft has radically changed the dynamics of the CRM SMB market since its entrance into this space about 18 months ago.”

2. Siebel ranks second. Aberdeen researchers say the other surprise was the partners’ selection of Siebel as the number two vendor. “Even though Siebel, which does not have a partner channel, relies on strategic partners, such as IBM and the joint Siebel/IBM CRM OnDemand initiative,” Aberdeen observes, “the company still wields influence over and has an impact on the entire market, including the SMB segment.” Equally surprising about Siebel’s second-place posting was that Siebel essentially lacked an SMB-specific product until fairly recently.

3. Other big names wane. While big names like Microsoft and Siebel are expected to dominate the future of the SMB market, Aberdeen says the influence of several smaller vendors that were earlier contenders, such as FrontRange Goldmine, “is either beginning to wane or has waned substantially.” Several others have either left the market altogether or become irrelevant in the face of competition from the larger suppliers, they add, noting that finding is not entirely surprising: “Partners don’t necessarily make decisions solely on technology or margins,” observes Aberdeen. “They also make decisions based on their view of which products will still be around in the next two, five or 10 years.”

For a copy of the report, visit www.aberdeen.com.