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The hot new enterprise software trend is CRM. But does it really live up to its promises?
No longer is customerrelationship-management (CRM) software the staid purview of large client/server application vendors such as Siebel Systems and Oracle selling to mammoth corporations. The world has changed. It's an expanding market looking at an estimated five-year compound annual growth rate of 33 percent, resulting in a projected $9.4 billion in licensing and services revenues by 2002.
That has established vendors scrambling to increase market share at the same time they're fighting off new players attracted to a wide-open functional niche: Internet-enabled sales, marketing, and support. These opportunities will result in a fundamental shift in the CRM-software market, not just among the vendors-both Siebel and Oracle have rolled out Web-based systems-but also in the significance of the role it plays in the corporation. According to Erin Kinikin, research director for customer-relationship management at Giga Information Group, "We're probably a few years into what will be a 10-to-15-year life cycle."
A Messy Rebirth
This current phase is really the rebirth of CRM. The three main components of a CRM package-sales-force automation, marketing automation, and call-center automationhave been around for about a decade, filling corporations' need to collect customer information to better understand their user base and to let employees in the front office do their jobs more efficiently. The major CRM players-Siebel, Clarify, Vantive, and Remedy-each have their roots in one of the three CRM disciplines. Over the last decade, they've grown their client/server product linesthrough either acquisition, internal development, or partnership-into an integrated suite of applications and sold it to large enterprises. (Enterprises are also using a similar category of software to handle relationships with business partners; see the sidebar "Paying Attention to Partners.")
Now that the large enterpriseswhose deep pockets let them experiment with new technology-have worked out the kinks in CRM software, midmarket companies also want to reap the benefits, says Carey V. Azzara, program director of International Data Corp.'s Corporate Computing Vertical Views group. The prosaic driver for these companies is the simple acknowledgment that customers are the key to any business' success and that, therefore, customer care is a strategic business application.
There are already several integratedsuite vendors serving the midmarket; Pivotal,...