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Where the Social CRM Market Will Collapse Into

by Michael Maoz  |  October 7, 2010  |  8 Comments

At our 1999 Gartner US Symposium I gave a presentation during which I said that 63 of the 80 software vendors that I was discussing in the CRM space would change ownership within six years. It turned out to be just about right – I under-estimated.  Following new software markets is like following Odysseus out of Troy – a Cyclopes will definitely eat a few of the original 500+ sailors, and Laestrygonians will certainly bash most to bits in the narrow harbors of the niche player.

Along comes the new space: Social CRM. Over 100 vendors, and likely not more than four will emerge as an independent company – if that. But it is not too soon to start thinking about where they will go. What class of vendor is best suited to pick them up? Think about the markets today: contact center infrastructure, web customer service, workforce optimization, unified communications, social software, and business applications for sales/marketing/service.  How do the pieces best fit together?

Vendors do not always succeed when they buy pieces that do not fit into their core sales model, regardless of the goodness of the asset acquired. Think about IBM with Early, Cloud. Or SAP and Wicom. Oracle and Telephony@Work. Nortel and Clarify. Avaya and Quintus. Maybe if we think about the DNA of the sales organizations at these companies we can see the future of Social CRM.

Examine the different product types I listed above and see if you see the pattern. Infrastructure for interacting with customers. Infrastructure for interacting amongst employees. Infrastructure for customers to interact with customers. And then business applications to market/sell/support the customer.

Early conclusion? Business applications vendors will need a change of DNA to get social stuff right, and this is unlikely for most. All the others will need a conversion to galvanism to sell CRM-oriented software. Also unlikely.  We are likely to see a lot of failed attempts during the consolidation phase. Social software will likely find the best home amongst the most enlightened of the business application players, but many will sell out to the infrastructure vendors. The latter group will struggle to make the change in orientation.

What do YOU think?

Additional Resources

Category: applications  crm  customer-centric-web  innovation-and-customer-experience  it-governance  leadership  saas-and-cloud-computing  social-crm  social-networking  social-software  strategic-planning  vendor-contracts  

Michael Maoz
VP Distinguished Analyst
13 years at Gartner
26 years IT industry

Michael Maoz is a research vice president and distinguished analyst in Gartner Research. His research focuses on CRM and customer-centric Web strategies. Mr. Maoz is the research leader for both the customer service and support strategies area and customer-centric Web… Read Full Bio


Thoughts on Where the Social CRM Market Will Collapse Into


  1. Jon Ferrara says:

    Hey Michael,

    You’ve raised a great topic and asked good questions. Having created GoldMine 20 years ago I may be biased, but I think Social CRM revolves around relationships or company/contacts. I think it will be harder for the Listening, Collaboration, etc. products to get the Relationship piece down well. I also acknowledge that the old time CRM vendors will find it difficult to strap on Social and call it a day. There are architectural and cultural issues that will make it hard for them to shift.

    I believe that we will see new entrants into the vendor field that might deliver the Holy Grail of Social CRM. They will need to combine Listening & Engagement with Communication & Collaboration interwoven into the relationship piece.

    After spending 8 years swimming in the Social River and watching the CRM forest from outside the trees I’m going to make a run at this with my new SaaS platform Nimble.

    Please wish me luck. 😉

    Best,

    Jon

    Ps. I’m so tired of Social CRM and the confusion created by everyone and his brother calling themselves a Social CRM platform. Let’s all just say what we are! I’ll start. Nimble is a Social Relationship Manager.

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  3. Hi Michael,

    I agree with you and with Jon. I’m going to add to Jon’s point on the CRM vendors not being able to strap on Social and calling it a day. It can (dare I say “will”) be done, but there is a mind shift that has to occur with all three groups – vendors that sell traditional CRM, the companies that purchased CRM, and the end customer whose communication stream is ultimately being captured, analyzed and, hopefully, acted on. We don’t know yet how comfortable the end customers are going to be with having these interactions captured and engaging with the brands.

    It isn’t your father’s CRM, to borrow a phrase from now extinct Oldsmobile. Coming from the SFA world, I’m with Jon. I think both CRM and Social CRM are all about relationships. I’ve got a ways to go before I’m on board with the distinction between CRM and SRM though. I need more convincing that it’s not just a buzzword and there are real differentiators there.

    I agree, the landscape will be much leaner in the coming years – either through M&A or just failure. Still…exciting times!

    Jon, I’m excited about Nimble and wishing you the best of luck!

    Best,
    Brenda

  4. Michael,
    You are SO right. From the get go, as a concept, I’ve seen SCRM as an extension of CRM, not a replacement. Which means, probably when boiled down to its simplest terms for vendors, the addition of customer channel inputs and outputs incorporated into traditional CRM functionality. The vendors all in all haven’t done that perfectly well. The social vendors don’t have the traditional CRM functionality that is needed though the smarts one integrate with it and the CRM vendors don’t really get it that well – preferring to call a Twitter integration enough. A few, like CDC Pivotal, Oracle and salesforce.com on the traditional side are attempting to incorporate the appropriate functionality but it would be stretch to say that any of them have wildly succeeded. Ultimately, as you so as always rightly point out, most of them will fail. Some will succeed and I’ll be placing a few public bets with my Companies to Watch stuff at the end of the year. In fact, I think that rather than “pure” SCRM, we’ll still see a lot of integration between social capabilities and CRM traditional functionality via APIs and vendor partnerships. As of now, Social CRM is two things – part of mainstream discussion and an umbrella term for the implementation of its components – i.e. a Twitter integration with business rules, workflow, sentiment analysis and a CRM data source, rather than some holistic implementation of a full fledged strategy and program. We’ll get there in a bit but by the time we do, the vendor landscape will be a lot starker and clearer – with a few players offering suites that can truly be called SCRM or at least akin to it, and a larger portion of the social vendors and CRM vendors partnered to provided integrated capabilities. But the roads will be littered by the fallen too. It will be interesting to see what shakes out on this one.

    Best always,
    Paul Greenberg

  5. Michael Maoz says:

    Jon,
    Wow has it been a while. You might not even recall talking to me all of those years ago! I’ll be looking out for Nimble. Drop me an email, and in the interim I’ll do some homework on your company.

  6. Jon Ferrara says:

    Michael,

    I do remember talking to you Michael and I will always remember how gracious you were to GoldMine and I. We were not your standard Gartner Enterprise fare, as GoldMine was always targeted towards Small Business/Workgroups. You and Wendy Close treated us great; even though we never were paying clients, I’ve always remembered that and I am so pleased your still there. You and I are officially old timers….

    I will send an email so we can catch up and I’ll get you set up on our Nimble beta so you can see what this old fart CRMer has been up to.

    Best,

    Jon

    Ps. keep up the great guidance. It’s pretty crazy and confusing out there. Man if the vendors are this confused about Social CRM I pity the end users trying to navigate the marketing BS.

  7. Harrys crm says:

    I think the victors will be those that listen closely to their users and don’t make their software bloated with useless functions.



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