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Software innovation for Customer Processes: Downplay the Largest Providers.

by Michael Maoz  |  January 6, 2011  |  Comments Off on Software innovation for Customer Processes: Downplay the Largest Providers.

The pace of the Magic Quadrant process is quickening for me ahead of the 2011 report. I don’t update the magic quadrants once a year: I update them every day of the year, but only publish the results once a year. For obvious reasons I can’t divulge any hints as to where the positions might be when I finally release the CRM Customer Service Contact Center MQ, but here is one thing: the larger the software provider, the more likely that provider is to provide trailing edge functionality. In the main, they are the most expense, the least flexible to deal with, and the least innovative. Some of them will tell me straight out: ‘why should I innovate when I can wait and buy?’

Why should a large software house innovate, when it can sit back and use the stash of cash to buy what is best? Maybe because innovation keeps us sharp. It increases the probability that we will make mistakes – small mistakes that will give us keen insight into the nature of business processes and into technology integration.

On the other hand, most of us buy food rather than grow it, preferring to focus on what we are good at.  The large vendors also know that it is just a matter of time before 95% of software startups wake up and smell the payoff. Why grow a company when you can grow a bank account?

Nowhere are we seeing this buy-versus-build then in the Social Software and Analytics space. The analytics vendors have been disappearing like the Artic ice shelf. Throughout 2011 we will see the social media vendors disappear faster then Dodo birds.

What is the implication? Don’t fear buying into the innovative solutions in emerging areas, but do your homework in the contract phase, and in the implementation phase, to make sure you are covered for that day when you find you have new bedfellows. I’ve said this before, but we continue to hear disappointment that we weren’t sufficiently cautious about the danger of acquisitions.

The good news for the Customer Service space? The large vendors are very likely to add social media and collaboration capabilities this year and next, and this will help many of you down the road.

Category: applications  crm  customer-centric-web  innovation-and-customer-experience  it-governance  leadership  social-crm  social-networking  social-software  strategic-planning  

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

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