by Richard Boardman on May 12, 2013
In summary: Salesforce overtakes SAP to be number one, SugarCRM’s SugarCon, and great results from Netsuite and Rimini Street…
It’s long been on the cards, but April seemed to confirm that Salesforce.com had grabbed the number one CRM vendor slot from SAP. Gartner’s ‘Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012’ report had Salesforce pegged at number one with 14% of the market, followed by SAP, Oracle, Microsoft, and IBM at number five. The top five vendors represented nearly 50% of a market which Gartner estimates has grown 12.5% to $18 billion in 2012.
How accurate these figures are, given that few vendors break out their CRM results from other lines of business, is open to question, but if nothing else it certainly seems to capture the general direction of the market, with Salesforce and Microsoft both showing 26% growth rates, over 0.1 and 7.8 per cent for SAP and Oracle respectively.
The Gartner report also identified that software as a service (SaaS) offerings represented 40% of the overall CRM market and that marketing functionality was a key area of investment.
A point that was rather underlined by Salesforce.com’s April announcement that it was extending its Marketing Cloud with Social.com, an integration between its Buddy Media social advertising platform, Radian6, its social listening application, and its core CRM system. Social.com will allow brands and advertising agencies to create, optimise, and automate highly targeted social advertising campaigns. While in pilot currently, Social.com is expected to be generally available with Salesforce’s Summer 2013 release.
In other news, SugarCRM staged its SugarCon 2013 event at the Waldorf Astoria in New York. Key announcements included: Sugar 7, also due for release in Summer 2013, featuring a range of new social capabilities; a new Sugar Mobile application for iOS and Android operating systems, and the release of Sugar Private cloud which adds to its SaaS and on premise options with the ability to run a managed private instance of SugarCRM in the cloud.
Curiously SugarCRM also seem to be running with the customer focused positioning which Salesforce.com also seemed to have adopted in preference to their previous emphasis on the social enterprise. It will be interesting to see whether other vendors also jump on board and if it gains traction with potential buyers.
In financial news, ERP/CRM vendor Netsuite announced its Q1 results with revenue of $91 million up from $69 million in the same period in 2012. While the net loss also increased from $7.7 million to $13 million in 2013, the sharp, 32%, growth in turnover moved Netsuite CEO, Zach Nelson, to call the results ‘the finest Q1 in our history’.
Rimini Street, the third party support and maintenance provider, also announced its Q1 results, with invoicing up 57% year on year. Given this momentum despite a looming date in court with Oracle, we can expect the third party market to really take off if the verdict goes Rimini Street’s way.
Anyway, that concludes my take on the news for April 2013. If I’ve missed or misunderstood anything significant please feel free to comment!
by Richard Boardman on April 7, 2013
In summary: Microsoft makes another CRM acquisition, Salesforce tops up the acquisition war chest, and Oracle’s Q3 sales execution issues….
It doesn’t seem very long ago that I was suggesting that Microsoft was going to get left behind if it didn’t respond to the raft of acquisitions being made by the likes of Salesforce.com and Oracle, and perhaps not really expecting Redmond to take a great deal of action. But Redmond did respond, firstly with the purchase of social collaboration tool, Yammer, then marketing automation company MarketingPilot, and now, announced at Microsoft’s March Convergence event in New Orleans, the acquisition of Netbreeze, a Swiss social listening and analytics company.
While the latest two purchases perhaps lack the profile of some other acquisitions in the space, it’s clear that Microsoft has no interest in conceding ground to its competitors. And any doubts about the company’s ability to assimilate these purchases were at least partially addressed at Convergence with the announcement of a new of MarketingPilot version 15 with a new interface harmonised with the latest Microsoft look and feel, and integration to Microsoft Dynamics CRM 2011, in both its online and on-premise options.
Any likelihood that the CRM acquisition frenzy is likely to die down any time soon, appeared to be dispelled by Salesforce.com’s March announcement that it plans to float $1 billion in convertible senior notes, whose potential use will include ‘funding possible acquisitions of, or investments in, complementary businesses, services or technologies.’
One of Salesforce’s potential targets, marketing automation company Marketo, announced its initial public offering in March. The IPO filing reveals revenues have increased from $14 million in 2010, to $58.4 million in 2012, though net losses also increased from $11.8 to $34.4 million in the same period. The IPO for $75 million comes on the back of Eloqua’s 2012 IPO and subsequent purchase by Oracle for $871 million, and shows how hot the marketing automation space is at the moment.
Oracle came under some scrutiny in March with a disappointing set of Q3 results. Earnings were $2.5 billion on revenues of $8.96 billion, down 1% on the previous year. New software licence and cloud subscription sales fell 2%. The company blamed sales execution issues, but analysts and commentators will be wondering if competition from the likes of Salesforce.com, Workday, Hadoop, and Rimini Street are taking their toll.
Rimini Street announced in March that the third party maintainer had doubled its sales in the Europe, Middle East and Asia region in 2012. The company is currently being sued by Oracle, but continues to gain customers. If the company wins the case, Oracle and SAP, in particular, are likely to come under considerable pressure, not only from Rimini Street, but a potential raft of new entrants to the market.
In other news Swiftpage announced it had finalised the acquisition of the Act and SalesLogix applications from Sage. It will be interesting to see whether the move will rejuvenate these two industry stalwarts.
Finally, Gartner provided some market cheer with a report that suggested software spending will increase modestly worldwide through 2014 with CRM applications identified as the top investment priority.
Anyway, that concludes my take on the news for March 2013. If I’ve missed or misunderstood anything significant please feel free to comment!