Michael MaozWhen I went looking at new cars that I might replace my 2001 Toyota RAV4 with, there were plenty of similar choices. Acura or Infiniti or Lexus or BMW were all mechanically about the same, and the rest was lifestyle stuff. On the eco-friendly side, there were also enough alternatives to the ubiquitous Prius. And auto insurance, once I purchase the car? Plenty of competition. All of which means competitive prices.
Compared to the automotive industry, CRM-related software is monopolistic and outrageously expensive. Software for basic sales automation, customer service, email handling, chat, and knowledge search and retrieval should have been commoditized five years ago. ACT! and Goldmine and Saleslogix and Siebel nailed sales opportunity management back in 2004. Vantive and Scopus and Clarify and Versatility and Remedy and others had customer service and trouble ticketing well defined over ten years ago. So what has happened to the unit cost of one seat of software for sales and customer service? Has it dropped, stayed the same, or gone up?
Fortunately for the software providers in the CRM space, most of the buyers who were procuring sales, marketing and customer service solutions ten years ago are long gone. No one hangs around CRM projects. It can be a soul-destroying endeavour best left to incarnations of Cervantes El ingenioso hidalgo don Quijote – yes, Don Quixote. I should know – I’m one of the unflagging optimistists that corporate and governmental processes can, are, and will continue to, improve. But those of us who continue our dedication to the discipline are few and far between, and this is terrific for CRM software providers and integrators. They can’t see that per-user costs of over $US 1,000 per year – for starters (when you bundle in the support, maintenance, storage, tools, et al.) are the same or higher than ten years ago. Ah, but these are modern platforms!!! So one must pay the same or more, and AGAIN.
When will we hear a software vendor say: I’m selling you software that will soon be a sunset technology and you’ll be forced to re-purchase? Instead it is all about the new version of, “We have a true client-server architecture!!” Wow, did that sell in 1996. Just change that to Cloud or SaaS or Twitter-integrated or ‘device independent’ and the Checkbooks come out.
The reality is that large CRM software shops know that most competition has been killed or maimed, and that the survivors can play the ‘re-platforming’ card and run ‘risk mitigation’ past the CFO and CIO and win a fair amount of the time.
What is interesting is the lack of counter-strategy among users. It would appear that there is a shortage of IT skills in North America and Europe, especially, making a ‘build’ decision impossible. And/or a lack of desire to call the vendors out on pricing. We usually say, ‘don’t build when you can buy’ – but at the moment, client after client after client is showing awe at the high prices of CRM software, and they don’t see it getting better.
What are you seeing?
Category: Applications Cloud CRM Innovation and Customer Experience IT Governance Leadership SaaS and Cloud Computing Sales Force Automation SFA Social CRM Social Networking Strategic Planning Tags:
5 responses so far ↓
1 CRM processes meet monopolistic software. | software September 23, 2010 at 10:52 am
[...] więcej: CRM processes meet monopolistic software. and-knowledge, and-outrageously, automotive, crm, customer-service, for-basic, have-been, [...]
2 Social Business Top News for September 23rd from 01:00 to 06:26 – Social CRM ( SCRM ) Consulting Services | Social CRM World ( SCRM ) September 23, 2010 at 11:01 am
[...] CRM processes meet monopolistic software. [...]
3 CRM processes meet monopolistic software. : : crm September 23, 2010 at 11:42 am
[...] Więcej: CRM processes meet monopolistic software. [...]
4 Roman Mildner September 24, 2010 at 4:46 am
It has been a management catch phrase: “don’t build what you can’t buy”.
However, considering the sad state of CRM requirements in early stages of CRM projects, I can’t see any leading CRM standard out there. In fact, I have seen more off-the-shelve CRM projects going down the drain than projects in which the development team built the whole system more-or-less from scratch.
There is a good explanation for it. Throw some CMMI vs. agility discussions and standard software disaster stories into your stove, add some matrix organization salt and IT hype pepper, and cook on small fire. Out comes a death march project soup. I hope you see the point.
In any case: building new software has been enormously simplified in the recent decade. The old business cases should be revisited, including more risk management (vendor lock-in). An ocassional PMBoK lecture would help many CIOs see things differently.
5 Akiva Marks September 27, 2010 at 2:24 am
I’m seeing my clients shifting to a Software as a Service model to mitigate the concerns of upgrades and managing the environment as well as a lower cost structure.
Apparently the high costs of the initial purchase plus ongoing maintenance and periodic upgrades are finally overcoming the reluctance of allowing such key business information to reside outside their own network.