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Why fear innovation in Social and CRM?

by Michael Maoz  |  June 7, 2012  |  4 Comments

The major software vendors get an adrenalin rush out of startups. They mostly don’t fear them. They, in fact, love them. To companies like IBM and Oracle and, software startups are outsourced R&D. Why should you do the R and the D on things you don’t know well, when a true innovator is out there enabling you to not face the dilemma of ossifying around your own original idea? To read this blog, you would need to turn up your speakers on Queen’s Another One Bites the Dust. Freddie Mercury would be singing, and John Deacon would be pumping the simple but incredible base line, Em (D / A) Am (BGD). And then we could read the names of the fallen Social vendors over the past few months alone: Collective Intellect, Meebo, Buddy Media, PowerReviews, Vitrue, (dunh/dunh/dunh… another one bites the dust), SlideShare, Tealeaf (questionable on social), Stypi, Socialtext, Crowd Factory, bluekiwi, oneDrum, Podio, RightNow (dunh/dunh/dunh… another one bites the dust).

Why would large companies such as SAP and Oracle possibly spend time developing these quaint programs when it is cheaper and less risky to just cherry pick and acquire the best ones? Pull up to the office in the Audi once a week, take the elevator up to Decision Central, allow your brain trust to run the facts and numbers, have lunch, make a decision, shake hands and get back in the elevator.

What this means for you as a buyer of innovative technology in the Social CRM field, for example, is to think of the company as a shell containing IP that will likely be plucked, like a pearl from an oyster, and strung on the necklace of another vendor. Just make sure that you have the right contractual conditions hammered into your agreement. Have you thought it out? There are another 50 software vendors that are more like moons ready to fall into the orbit of a planet with enough heft and gravity.

Don’t fight it, and don’t regret it: large vendors do not innovate at the ‘edges’ where you are seeking to best engage the consumers who buy from you. Social media, digital marketing, ad placement, content personalization, presence-based services, collaboration and social network analysis, reputation management – all are outside of the capabilities of the ‘majors’ but not outside of their price range. They will re-platform, invest money, expand the scale.

IBM, Oracle and Microsoft, and now Google, Apple and Facebook are (perhaps) the only majors with legs. The rest are likely to collapse into the orbit of the true planets. It is all ok. Eyes wide open and with a clear vision for where you are going – and you will be able to innovate most rapidly with the innovators. As the innovative bits commoditize they will lose energy and collapse into the larger suits, just as in electron shells: fundamental, diffuse, principal, sharp – each shell of vendor has its place, and when you select wisely you can reap the benefit that will make the risk worth the while.

Do you disagree, fundamentally? SOA, RESTful apps, HTML5, powerful APIs – aren’t these good enough?

Next week we are off to London (  for the Gartner Customer Strategies Summit. I see on my calendar that I am meeting with a couple of dozen of you there 1-1, and seeing more of you – I look forward to it.

Category: applications  cloud  crm  innovation-and-customer-experience  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

Thoughts on Why fear innovation in Social and CRM?

  1. Rocio Ramos says:

    I suppose this is the sad truth in the software industry. However, there are a lot of very successful start-ups who do beat the odds and provide great tech all on their own or flourish in app marketplaces. A consumer should always make sure that they have the full scope of a company before they buy in. Another great read.

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