the gartner crm software vendor guide: 2003marketplace by 2006. operations (erp) products (scm)”...

GartnerEntire contents © 2003 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to bereliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretationsthereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

R-20-4194M. Maoz, R. DeSisto, C. Marcus, G.Herschel, E. Kolsky, E. Thompson, T. Berg

Strategic Analysis Report7 July 2003

The Gartner CRM Software Vendor Guide: 2003

Gartner analysts are asked on an ongoing basis for a concise listing of the customer relationshipmanagement vendor categories covered by Gartner. This Strategic Analysis Report addresses thoseinquiries.

Management Summary

The challenge for Gartner in presenting a concise listing of customer relationship management (CRM)vendors is that businesses operate in dozens of industries, each with its own approach to organizingsales, marketing and customer service around customer segments, fostering customer-centric behaviorsand implementing customer-centric processes and software. Though a harsh economic climate makes itdifficult for new and established vendors, dozens of smaller, innovative companies (for example, DatriaSystems, Fast-Talk Communications, Mindbox ProSight, MCA Solutions and Questra) have emerged withproducts that address gaps in the current CRM products. They are not yet given prominence in either aGartner Magic Quadrant or on a category list, but they are focuses of interest. Even the largest CRMapplication providers (such as Siebel Systems and SAP) are extremely limited in the scope of their CRMsolutions.

CRM application suites will fade in relevance as enterprises look increasingly toward enterpriseapplications to automate their cross-enterprise functions, cutting across the traditional — and artificial —silos created by these individual solutions. The market is moving toward process-focused solutions thatallow enterprises to unite multiple areas more easily (such as billing, provisioning, parts logistics,inventory and service history).

The vendors coming from an enterprise resource planning (ERP) or back-office application heritage (suchas SAP, PeopleSoft and Oracle) have CRM offerings that are often immature in comparison to those ofthe established CRM vendors (such as Siebel Systems). However, the ERP vendors are tapping into adeepening trend. Enterprises are increasingly realizing that many core sales and service processesrequire tight integration with an ERP, supply chain management (SCM) or legacy system (for example,billing, activation systems or check adjustment) to complete a customer transaction quickly andaccurately. The need to deliver a full enterprise application capability, while maintaining functionalityexcellence, will tie up the application development resources of the large application vendors.

These vendors have begun to shift the market from pure features or functions to architectures, asbusiness process flow will be just as important as any individual piece of functionality (see Figure 1).Increased emphasis will be on middleware, the database, standards and interoperability. CRM suite


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vendors, as well as best-of-breed (BOB) point solutions, that assist in this endeavor will lead in themarketplace by 2006.

Operations(ERP)

Products(SCM)”

E-businessIntegratedlogisticsstrategies

Enterpriseapplications

PartnerrelationshipmanagementDesign

Collaborationand content

management

Customers(CRM)

CRM customer relationship managementERP enterprise resource planningSCM supply chain management

Source: Gartner Research

Figure 1. The Integration of Processes

Most CRM application vendors sell features and not viable products. The silver lining for enterprises isthat the innovative features that those vendors develop will — in most cases — be acquired by companiesthat can turn the product enhancements into more viable products.

Gartner's CRM Magic Quadrants assess only a fraction of the vendors covered by the Gartner CRMteam. Through 2006, more than 75 percent of the companies in the Gartner vendor lists will remain point-solutions focused on niche markets, and 65 percent of those vendors will sell their CRM assets to astronger competitor or fail (0.8 probability). To assist enterprises in selecting the most appropriate vendor,this Strategic Analysis Report provides lists of the vendors in each CRM application category. To furtherassist enterprises, Appendix C provides a list of Gartner analysts and their areas of coverage.


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CONTENTS

1.0 Introduction................................................................................................................................7

1.1 Gartner Datapro .........................................................................................................................7

2.0 MarketScopes Emerge in the CRM Coverage Area .................................................................7

2.1 MarketScope Rating Framework...............................................................................................8

3.0 The Magic Quadrants.................................................................................................................8

4.0 CRM Large Enterprise Application Suites................................................................................9

5.0 CRM Suites for Midsize Businesses.......................................................................................11

5.1 Leaders .....................................................................................................................................13

5.2 Challengers ..............................................................................................................................13

5.3 Visionaries................................................................................................................................14

5.4 Niche Players ...........................................................................................................................14

6.0 Marketing Automation .............................................................................................................15

6.1 Marketing Automation Vendors ..............................................................................................15

6.2 Marketing Resource Management ..........................................................................................18

6.3 Aprimo Achieves the MRM Magic Quadrant Leadership Position........................................18

6.4 SAP Joins Oracle as MRM Challengers Poised to Capture MRM Market Share ..................19

6.5 Visionaries Attract Attention as Enterprises Look to the Future of MRM ............................19

6.6 Some Established and New Niche Vendors Also Benefit From Increased Interest ............20

6.7 Likely MRM Magic Quadrant Candidates ...............................................................................21

7.0 E-Marketing: Multichannel Marketing Emerges .....................................................................21

7.1 Leaders .....................................................................................................................................22

7.2 Challengers ..............................................................................................................................23

7.3 Visionaries................................................................................................................................23

7.4 Niche Players ...........................................................................................................................24

7.5 The Future for E-Marketing Vendors and Solutions ..............................................................24

8.0 Leaders Prevail in the North America Customer Relationship Optimization MagicQuadrant...................................................................................................................................25

8.1 Leaders .....................................................................................................................................26

8.2 Challengers ..............................................................................................................................27

8.3 Visionaries................................................................................................................................27

8.4 Niche Players ...........................................................................................................................28

8.5 Honorable Mentions ................................................................................................................29

9.0 Partner Relationship Management .........................................................................................29

9.1 Leaders .....................................................................................................................................30


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9.2 Visionaries................................................................................................................................30

9.3 Challengers ..............................................................................................................................32

9.4 Niche Players ...........................................................................................................................32

9.5 Likely Future PRM Magic Quadrant Candidates ....................................................................33

9.6 PRM Functionality Components .............................................................................................34

9.7 PRM Software Vendors............................................................................................................34

10.0 CRM Sales Suite Vendors .......................................................................................................35

10.1 Leaders .....................................................................................................................................36

10.2 Visionaries................................................................................................................................37

10.3 Challengers ..............................................................................................................................37

10.4 Niche Players ...........................................................................................................................38

10.5 Sales Solutions for European Sales Organizations...............................................................40

10.6 Sales Configuration Systems..................................................................................................40

10.6.1 Evaluation Criteria ...................................................................................................................41

10.6.2 Pricing Applications ................................................................................................................45

10.7 Sales Incentive Compensation Management .........................................................................46

10.7.1 ICM Market Dynamics ..............................................................................................................47

10.7.2 Best-of-Breed ICM Vendors.....................................................................................................47

10.7.3 Enterprise Suite Vendors ........................................................................................................48

10.7.4 Vendors Not on the Magic Quadrant ......................................................................................50

10.8 The Direct Sales Technology Magic Quadrant: First Half 2003 ............................................50

10.9 The Evolution of the DST Magic Quadrant .............................................................................51

10.10 Direct Sales Technology Market .............................................................................................52

10.10.1 Leaders .....................................................................................................................................52

10.10.2 Visionaries................................................................................................................................52

10.10.3 Challengers ..............................................................................................................................53

10.10.4 Niche Players ...........................................................................................................................53

10.11 Consumer Goods Industry SFA Magic Quadrant: First Half 2003 ........................................55

10.11.1 The Magic Quadrant ................................................................................................................56

10.11.2 Visionaries................................................................................................................................56

10.11.3 Niche Players ...........................................................................................................................57

10.12 Sell-Side B2C Vendors ............................................................................................................60

10.13 Sell-Side B2B Specialists ........................................................................................................60

11.0 Customer Service and Support...............................................................................................61

11.1 Customer Service and Support Suites ...................................................................................61

11.2 Field Service Management ......................................................................................................62

11.3 PRM for Service .......................................................................................................................63

11.4 E-service...................................................................................................................................64


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11.5 Web Collaboration ...................................................................................................................66

11.6 Quality Assurance and Logging .............................................................................................67

11.7 Web-Based Survey Solutions .................................................................................................67

11.8 Workforce Management ..........................................................................................................68

11.9 Contact Center E-Learning......................................................................................................68

11.10 Citizen Service Request ..........................................................................................................69

12.0 What Is Next? ...........................................................................................................................70

13.0 Conclusion ...............................................................................................................................71

Appendix A:Acronym Key .....................................................................................................................72

Appendix B: ............................................................................................................................................73

Related Datapro Research .....................................................................................................................74

Appendix C: ............................................................................................................................................75

Gartner Analysts and CRM Coverage Areas ........................................................................................76


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FIGURES

Figure 1. The Integration of Processes...................................................................................................2

Figure 2. Sales Configuration MarketScope .........................................................................................42


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1.0 Introduction

Strategic Planning Assumption: Through 2006, the leading CRM application suite providers will deliver amaximum of 35 percent of the software required for an enterprise to build a CRM environment (0.7probability).

The ongoing economic downturn, together with enterprise dissatisfaction at the pace of return on CRMinvestments, have created an environment in which most businesses, operating in survival mode, aredelaying or canceling CRM software purchases. Delays in spending on strategic purchases are beingreplaced by smaller tactical investments. This does not bode well for vendor viability, and it complicatespurchasing decisions, leading to a drop in CRM license revenue for 2003 that could be as much as 12percent to 15 percent. A major contributor to buyer caution is the haste with which most CRM projectswent forward during the 1999 to 2001 period. The lack of measurement resulted in an absence of tangiblereturn on investment (ROI) metrics. That, in turn, reduced confidence in the benefits of CRM initiatives.Businesses that purchased large numbers of licenses to lock in steeper discounts reasoned that theywould implement the entire purchased package over time. However, the dual issues of stalled top-linerevenue growth and disappointing ROI have resulted in the cancellation of subsequent project phases.Consequently, enterprises are left with many of their purchased licenses (42 percent, according to Gartnersurveys) sitting on the shelf, resulting in the average cost of a utilized license being raised, ofteneffectively back to the list price.

1.1 Gartner Datapro

Gartner Datapro research is often available to complement the analysis performed on certain vendors.Appendix B lists all relevant Datapro research, together with the appropriate report title and number.

2.0 MarketScopes Emerge in the CRM Coverage Area

Ultimately, CRM functionality has matured to the point where it has become commoditized. For example,many enterprises are on their second or third generation of a product type such as sales configurationsystem. At that point, the Gartner Magic Quadrant that supports that space becomes a candidate for aform of Gartner evaluation known as a MarketScope. A MarketScope provides specific guidance forenterprises that are deploying or have deployed the functionality of the mature product set, as well valuefor potential new users seeking to purchase a mature solution. MarketScopes will also be used to covernewly emerging functionality that is not yet covered by a Magic Quadrant. By the second half of 2004,MarketScopes will replace 50 percent of the CRM Magic Quadrants. In place of the Magic Quadrants willbe a MarketScope rating framework as follows.

Table 1. MarketScope Rating

Strong Negative Caution Promising Positive Strong Positive

Vendor

Vendor A

Vendor B

Vendor C


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2.1 MarketScope Rating Framework

A Gartner MarketScope rating does not imply that the vendor meets all, few or none of the evaluationcriteria. The Gartner MarketScope evaluation is based on a weighted evaluation of each of the vendor'sproducts in comparison with the evaluation criteria. Gartner's criteria must be viewed as they apply to anenterprise's specific application requirements. Clients should contact Gartner to discuss how thisevaluation may affect their specific needs. In Table 2, the various ratings are defined as:

Table 2. MarketScope Rating Framework

Strong Positive Solid provider of strategic products, services or solutions

• Customers: Continue investments

• Potential customers: Consider this vendor a strong strategic choice.

Positive Demonstrates strength in specific areas, but is largely opportunistic

• Customers: Continue incremental investments

• Potential customers: Put this vendor on a shortlist of tactical alternatives

Promising Shows potential in specific areas; however, initiative or vendor has not fully evolvedor matured

• Customers: Watch for a change in status and consider scenarios for short- andlong-term impact

• Potential customers: Plan for and be aware of issues and opportunities relatedto the evolution and maturity of this initiative or vendor

Caution Faces challenges in one or more areas

• Customers: Understand challenges in relevant areas; assess short- and long-term benefit/risk to determine if contingency plans are needed

• Potential customers: Note the vendor's challenges as part of due diligence

Strong Negative Difficulty responding to problems in multiple areas

• Customers: Exit immediately

• Potential customers: Consider this vendor only if no alternatives exist

Source: Gartner Research (as of June 2002)

3.0 The Magic Quadrants

The process of selecting an appropriate vendor is often one of the most difficult aspects of a CRM projectbecause the enterprise must make many decisions that have been glossed over in earlier phases of theproject. Vendor selection is often the stage at which enterprises' ideas of "desired functionality" meet thereality of what vendors can provide. This reality usually forces enterprises into a series of decisions aboutthe relative importance of different pieces of functionality and the type of vendors they should work with toensure successful implementations.


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Despite the thoroughness of the Gartner Magic Quadrant research process, it is important for enterprisesto remember that the role of the Magic Quadrant is to serve as the start of a vendor selection process,and the graphic should never be used in isolation to build a shortlist. Analysts encourage input and enjoydiscussing why vendors are positioned as they are on Gartner Magic Quadrants, how this position is likelyto change over time and — most importantly — how a vendor's position should be viewed in light of theenterprise's specific requirements.

This Strategic Analysis Report brings together all of Gartner's latest CRM Magic Quadrants to provideenterprises with a single reference source as they start to make decisions about which vendors theyshould evaluate, and how and when a particular vendor will be able to meet their unique requirements.

A note on the vendor lists: The appearance or lack of appearance of vendors under the category lists thatfollow is based on Gartner's tracking of the CRM category. Gartner has no intention to endorse, rate orevaluate any specific vendor or their capabilities in this research report. Absence from a list does notnecessarily imply that Gartner does not cover a particular vendor. The vendor lists are often volatile andmay undergo rapid change. Gartner's purpose in publishing this research is to assist enterprises inunderstanding the full scope of vendor coverage within the Gartner CRM research team.

Enterprises recognize that CRM depends on front-office coordination (that is the sales, marketing andservice channels), as well as effective integration with the back-office functions. ERP vendors have nowrecognized the emerging CRM requirements and have begun to deliver solutions that address them. Theyare likely to focus on broad, but fairly basic CRM functionality, with integrated front-to-back-officeapplications to provide an appealing alternative. In time, these types of applications are becoming acompetitive necessity.

4.0 CRM Large Enterprise Application Suites

The traditional CRM vendors have already begun to remake themselves with real-time solutions. Many ofthe CRM vendors are offering increasingly faster access to customer information to enhance the likelihoodof sales or improve the levels of service.

Vendors that provide CRM suites (such as B2B or B2C) for large enterprises include:

• Amdocs ClarifyCRM

• Chordiant Software

• E.piphany

• Onyx Software

• Oracle

• PeopleSoft

• SAP

• Siebel Systems

The key leadership criteria include:

• Current ability to move markets

• Enables a competitive advantage

• CRM functionality for all business models within B2B as proved by user references and Gartner MagicQuadrants


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• Proven application scalability

• Ability to participate in enterprise-spanning business processes

• Sufficient trained implementers (that is including business process consultants) in three geographiesfor the specific industry and functional requirements

• Satisfied customers with a deployed and integrated CRM suite showing measurable benefit from eachsupported industry model

Table 3. Gartner's 2003 Business-to-Business CRM Suite Magic Quadrant Positions

Leaders Challengers Visionaries Niche Players

Siebel Systems PeopleSoft SAP, Oracle, Amdocs,Onyx Software andE.piphany

Source: Gartner Research (as of February 2003)

For the specific positions of these vendors in Gartner's Magic Quadrant for this market segment, see"CRM Suite Magic Quadrant 2003: Business-to-Business," M-19-4428.

Vendors are focusing on the business processes and emphasis on a backbone, or digital nervous system,approach to integrating business applications. At this point, SAP and Oracle have, in particular, beenmoving in this direction of becoming more process-oriented and less application-specific. If this is thecase, then eventually the two areas will converge at a third, higher-level solution. This is the key to thefuture business applications market.

B2B enterprises, which sell to, market for and service other businesses (that is, wholesaler or reseller vs.retail or end consumer), require CRM suite functionality with different strengths than those needed forB2C selling (see Table 4).

Table 4. Customer Relationship Management Suite Functionality

Marketing Sales Customer service

Marketing relationshipmanagement (MRM)

CRM sales suites Customer service and supportcall/contact center

Customer relationshipoptimization (CRO)

Direct sales e-Service

e-Marketing Incentive compensation management Field service management

Partner relationshipmanagement

Partner relationship management Partner relationship management

Sales configuration system

Consumer goods sales force automation

Source: Gartner Research


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Of the 12 key functionality components of a CRM suite, B2B CRM places the most emphasis on thesupport of:

• Many-to-many relationships, including partner-to-partner collaboration

• Mobile sales forces

• Opportunity management

• Proposal generation

• Incentive compensation management

B2C CRM relies more heavily on analytics to build an understanding of the customer and have a relativelyimpersonal relationship with the customer (that is, nobody owns a particular relationship, and thecustomer deals with many different people in the enterprise).

Table 5. Gartner's 2003 Business-to-Consumer CRM Magic Quadrant Positions


Siebel Systems PeopleSoft andE.piphany

SAP, Oracle, Amdocs,Onyx Software,Chordiant Software andKana Worldwide

Source: Gartner Research (as of March 2003)

For the specific positions of these vendors in Gartner's Magic Quadrant for this market segment, see"CRM Suite Magic Quadrant 2003: Business-to-Consumer," M-19-4530.

5.0 CRM Suites for Midsize Businesses

Key Issue: Which vendors, products and services will be best suited for small and midsizebusiness IT requirements?

Strategic Planning Assumptions:

• By year-end 2004, 85 percent of midsize-business-focused CRM application suites will supportMicrosoft's .NET, Web services and thin-client architectures (0.8 probability).

• By year-end 2004, 50 percent of today’s vendors focused on CRM suites for midsize businesses willmerge, be acquired, leave the market or narrow their focus to an industry or, more likely, severalsubindustries (0.8 probability).

• By year-end 2003, Oracle, J.D. Edwards and SAP will offer midsize-business-focused CRM solutionsprimarily targeting their own customer bases (0.7 probability).

• Through 2006, purchased packaged software will remain the most popular approach for midsizebusinesses to acquire business applications (0.8 probability).

• By year-end 2004, online CRM application service revenue will account for more than 25 percent ofthe midsize-business CRM application market (0.7 probability).


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Onyx, Pivotal and SalesLogix are the midsize-business customer relationship management marketleaders. Vendors traditionally focused on large enterprises continue to challenge, as Microsoft enters themarket as a visionary.

Gartner's CRM Magic Quadrant examines application suites for North American midsize businesses(MSBs) with between 100 and 1,000 employees or annual revenue in the range of $50 million toapproximately $500 million, or midsize divisions of large enterprises. MSB vendors include:

• Best Software/SalesLogix

• Connect-Care

• Epicor Software

• FrontRange Solutions

• InterlinkONE

• iET (Applix)

• J.D. Edwards

• Microsoft CRM

• NetLedger

• Oncontact Software

• Onyx Software

• Oracle

• PeopleSoft

• Pivotal

• Relavis

• SalesForce.com

• SAP

• Saratoga Systems

• Siebel

• Soffront Software

• Talisma

The minimum criteria for inclusion in the Magic Quadrant are support for the three primary applicationsthat make up a CRM suite (that is, sales, customer service and marketing automation). Although thesethree functions are found in all of the rated suites, the balance of functionality varies significantly fromsuite to suite. Most offer stronger and deeper sales or customer service than marketing functionality. Insome cases, these variations reflect the application development heritage of these vendors, but theemphasis on sales and customer service is also reflective of MSBs' emphasis and demand. A growingtrend for MSB CRM is the availability of pre-built industry-specific or subindustry-specific functionality.


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Many vendors rely on their professional services or those of their systems integration partners to provideindustry-specific functionality by customizing their general-purpose CRM applications. Interviews with thevendors, inquiries from Gartner clients and customer reference checks form the basis for the MagicQuadrant analysis. For more on the evaluation criteria, see "The Complete SMB Guide to CRM VendorEvaluation," COM-14-2171 and "An SMB's Guide to Evaluating CRM Technology," COM-14-2170. For thespecific positioning of vendors within Gartner's Magic Quadrant for this market segment, see "CRM Suitesfor North American MSBs: 1H03 Magic Quadrant," M-19-3669.

Table 6. CRM Suites for North American Midsize Businesses Magic Quadrant: First Half 2003


Onyx, Pivotal andSalesLogix

Siebel Systems andPeopleSoft

Oncontact,SalesForce.com andMicrosoft

Talisma, iET, SaratogaSystems, FrontRangeSolutions, Epicor,Soffront, Relavis,NetLedger, Connect-Care and interlinkONE

Source: Gartner Research (as of April 2003)

5.1 Leaders

Onyx Software offers midsize businesses strong CRM functionality across the suite and strengths in sub-300 seat contact-center-based customer service and inside sales. Onyx has one of the most advancedarchitectures in the market. Onyx has adequate partnerships with service providers (such as DeloitteConsulting, Accenture, Unisys and IBM Business Consulting Services) and a technology partnership withMicrosoft. Onyx's biggest challenges are to deliver consistent revenue growth and to regain profitability.

Pivotal, like Onyx, has been challenged to deliver consistent revenue during the past year. Pivotal hasadded to its functional strength in sales, particularly e-sales, with new releases focused on customerservice and contact center support. The October 2002 acquisition of MarketFirst will bring Pivotalimproved marketing automation functionality when the integration is complete. To reduce costs andincrease its development capabilities, Pivotal is ramping up a development organization in India.

Best Software's SalesLogix's strengths are its multichannel sales automation, operational applicationintegration, and flexibility and customizability. SalesLogix's 500-partner sales and support channel offerstailored industry solutions based on SalesLogix for more than 10 industries.

5.2 Challengers

Siebel Systems offers two CRM suites for MSBs — Enterprise Release 7.5 with market-leading largeenterprise-class functionality, which is both deep and highly scalable, and the MidMarket Edition 7.0,which includes a subset of Enterprise functionality. Both have strong and balanced functionality acrossthe primary functions of sales, customer service and marketing. Siebel has switched from a combinationof direct and indirect sales to a primarily direct-sales model for MSBs.

PeopleSoft's Accelerated CRM targets MSBs with current or near-term requirements for large enterprise-class functionality, scalability and pre-integration with PeopleSoft's other applications (such as for humanresources and finance). PeopleSoft also offers several industry-specific add-ons for MSBs, includingfinancial services, communication, insurance, government, high technology and energy. PeopleSoft sells


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primarily directly to MSBs. PeopleSoft released CRM v.8.8 at the beginning of 2003, and has not yet beenable to provide sufficient references for evaluation.

5.3 Visionaries

Oncontact Software is focused entirely on midsize businesses and demonstrates that focus with the leveland balance of the functionality of its one-price suite. Support for multiple technologies, includingMicrosoft Outlook and Lotus Notes messaging and Microsoft SQL Server, Oracle, Sybase and IBMInformix databases, is also a strength of Oncontact

SalesForce.com is a phenomenon in the CRM market. Beginning in early 2000, it has grown its user baseto more than 5,400 companies with a formula of ease of use, good enough functionality and low prices.Sales automation is its strongest function, but improvements to all functions are being made rapidly.Although highly configurable, SalesForce.com is not customizable and, therefore, may not be appropriatefor MSBs with industry-specific or unique requirements.

Microsoft Business Solutions announced the general availability of the much-anticipated Microsoft CRM inJanuary 2003. Microsoft CRM's strengths are its .NET architecture, its tight Outlook integration and thestrength of the Microsoft brand. Microsoft's biggest challenge is the steep learning curve its resellerchannel will have to go through to effectively sell and support a set of business applications as complexas CRM.

5.4 Niche Players

Talisma's product strengths are its Web architecture and its support for multichannel contact-center-basedcustomer service and support. Talisma's corporate strength is its India-based development teams, whichhave been able to build CRM products and related services quickly and cost-effectively.

iET's strengths are its Web architecture, its customer service functionality and its emerging CRM analyticscapability. Platinum Equity's acquisition of the Applix CRM business in January 2003 is expected to resultin a greater focus on industry-specific CRM solutions.

Saratoga Systems' Avenue product is well known for its strong data synchronization that supports mobilesales among its midsize-to-large-enterprise, mostly multinational client base. Only a small number ofSaratoga's 750 customers have migrated to the new Web architecture iAvenue product, but about a thirdwill do so in 2003. iAvenue provides a 32-bit Windows client for disconnected mobile users, a Web clientfor connected users, and Outlook and Notes clients.

Epicor Software's strengths are its suite integration, customer service and support functionality and focuson midsize businesses. Epicor's customer service and support function made the transition to its new.NET architecture in late 2002. Sales and marketing functions will have moved from the currentclient/server architecture to .NET by year-end 2003.

FrontRange Solutions' CRM applications are being ported to .NET architectures. GoldMine Sales andMarketing 6.0 can be integrated with HEAT 7.0 to form the GoldMine FrontOffice CRM suite or can beacquired separately.

Relavis is somewhat unique as one of the few MSB-focused vendors whose CRM applications are notbased on Microsoft architectures. Relavis’ suite is built on a pure J2EE architecture based on IBMWebSphere, DB2 and other collaborative IBM technologies, including WebSphere Business Components,Domino, Sametime and QuickPlace. The applications support tight integration with Lotus DominoMessaging and Calendaring, and support Microsoft Outlook integration through a Lotus connector.


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NetLedger's CRM suite for MSBs is NetCRM and is a new entrant to this market. NetCRM is a hostedservice and competes on the basis of low cost, good enough CRM functionality and ease of use.NetLedger also competes on the basis of integrated business application functionality for MSBs with itsNetSuite service, which includes integrated CRM and operational applications, including accounting andhuman resources.

Connect-Care targets midsize B2B-focused hardware and software vendors with its CRM suite. Itsclient/server application is based on Sybase's PowerBuilder, and its thin client is based onJ2EE/JavaServer Pages technology. Connect-Care supports bidirectional integration with Outlook andLotus Notes.

interlinkONE is a small company (that is, about 30 employees) offering business relationship managementand inventory/warehouse applications via the ASP model and as licensed software. In addition,interlinkONE has focused on highly customized solutions for midsize-to-large high-technologymanufacturing and financial services organizations.

Soffront Software is a new entrant to this market, having developed a Web architecture CRM suite from itshelp desk and defect-tracking application heritage. Soffront's challenge will be to expand its customerbase in sales force automation and marketing automation

With Microsoft and more traditionally large-enterprise-focused application vendors entering the market,the choices midsize businesses have appear to be growing but will soon shrink because of consolidation.Vendor commitment to the market requirements and viability will become key decision criteria. MSBs areadvised to begin their search for CRM applications only after creating an enterprisewide CRM vision andstrategy.

6.0 Marketing Automation

Critical trends: The looming challenge for the marketing function is the need to get its own house in orderso that it can best leverage its resources and drive further value by playing a more significant role incustomer-centric transformation of the enterprise. To begin with, marketers are under growing pressure tomanage increased complexity and fragmentation of marketing efforts while also charged with improvingthe efficiency, effectiveness and accountability of the marketing function. In addition, the Sarbanes-OxleyAct will affect how marketing expenditures are managed. Reporting of material discretionary marketingfunds will have to adhere to higher standards that will require significant transformation of currentprocesses and systems.

From a CRM perspective, enterprises that have made substantial operational CRM investments in thepast are looking to drive incremental value from those investments, and CRM-related analytics are seenas an opportunity to do so. Marketing is increasingly being looked at to drive customer-value-basedsegmentation that can then be leveraged across the enterprise to differentiate customer treatment andenhance user resources.

6.1 Marketing Automation Vendors

Gartner tracks more than 75 vendors in the marketing automation market, of which between 45 and 50appear in Magic Quadrants. In addition, Gartner does not maintain a Magic Quadrant for several othercategories of marketing vendors:

• Ad management services

− 24/7 Real Media


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− DoubleClick

− ValueClick

• Affiliate marketing

− Commission Junction

− LinkShare

− ValueClick

• Business intelligence software

− Business Objects

− Cognos

− Informatica

− MicroStrategy

• Customer data providers

− Acxiom

− CACI International

− Claritas/VNU

− Dun & Bradstreet

− Experian Information Solutions

• Customer Data Integration (new category)

− Acxiom

− Experian

− GroupOne

− Harte-Hanks

• Customer feedback systems

− Recipio (Informative)

− Respond

− InfoSTEP

• Customer profitability analysis

− Fidelity Information Services (only financial services) (Fidelity acquired ALLTEL InformationSystems)

− ALG Software

− HNC Software


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− Oracle

− PeopleSoft

− SAP

− SAS Institute

− Teradata, a division of NCR

− Unisys

− WebTone Technologies (only financial services)

• E-mail marketing

− BoldFish/Siebel

− CheetahMail

− Digital Impact

− Lyris Technologies

− L-Soft International

− SilverPOP

− Socketware (Accucast)

− YesMail

• B2C sell side commerce

− BroadVision

− Intershop Communications

− Oracle

− Prophet 21

• Marketing service providers

− Acxiom

− Harte-Hanks

− Experian

− Harland Financial Services

− Interelate

− Maritz

− Relizon (formerly Epsilon)

− Quaero


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− Sophron Partners

• Web measurement software

− Accrue Software

− Sane Solutions

− SPSS (NetGenesis)

− Visual Insights

− WebTrends (NetIQ)

6.2 Marketing Resource Management

Key Issue: How can the marketing function better focus on value creation by leveragingtechnology in its operations?

Strategic Planning Assumption: By 2007, enterprise application suite vendors will command more than 70percent of new marketing resource management application license revenue (0.7 probability).

Strategic Planning Assumption: By 2007, three or fewer viable BOB marketing resource managementvendors will be remaining because of acquisitions, consolidation and attrition (0.8 probability). Interest in,and awareness of, marketing resource management are on the rise, as BOB applications begin to matureand larger marketing automation and enterprise application vendors enter this market.

Marketing resource management (MRM) entails processes and capabilities that enhance an enterprise'sability to orchestrate and optimize the use of marketing resources. MRM applications improve anenterprise's ability to plan, coordinate execution and measure the impact of marketing efforts. To assistenterprises in the vendor selection process, Below are the placements for vendors on the Gartner 2003MRM Magic Quadrant (see Table 7). For the specific positions in Gartner Magic Quadrant, see "MarketResource Management: 2003 Magic Quadrant," M-19-3829.

Table 7. Gartner's Marketing Resource Management Magic Quadrant Positions: March 2003


Aprimo SAP and Oracle SmartPath, Unica,Elateral and Veridiem

Then…, AssetLink,Citat, PeopleSoft,BrandWizardTechnologies, CSTechnologies,MarketSoft andPivotal/MarketFirst

Source: Gartner Research (as of March 2003)

6.3 Aprimo Achieves the MRM Magic Quadrant Leadership Position

Who should consider a leader? Enterprises looking for a vendor with proven MRM functionality,capabilities and experience with large or complex implementations should consider a leader.

Aprimo becomes the first vendor to reach leadership status in the MRM Magic Quadrant based on thebreadth and maturity of its MRM offering. Aprimo references cited ease of use and integrated functionality


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that adds consistency to key marketing processes, ensuring that marketing programs and investmentssupport organizational goals and improve visibility of marketing activities. During the past year, Aprimohas continued to expand its MRM-related client and revenue base and has forged key alliances to expandgeographic reach and implementation capabilities. Aprimo's largest MRM deployments include Bank ofAmerica, Hewlett-Packard and Autodesk.

6.4 SAP Joins Oracle as MRM Challengers Poised to Capture MRM Market Share

Who should consider a challenger? Enterprises looking to deploy MRM should consider a challenger ifthey are willing to sacrifice depth of functionality relative to BOB point solutions in exchange for tightintegration with deployed enterprise applications and superior vendor viability.

Oracle was the first enterprise application suite vendor to introduce an MRM offering, although its initialapproach was mostly focused on its available marketing applications, with some level of integration at adatabase and user interface level. In the past year, Oracle has begun moving beyond packaging of anMRM offering with a more concerted product development and integration effort based on a better graspof MRM business requirements. Oracle has a few clients that have deployed MRM-related functionality,but it has yet to make a notable MRM market impact.

SAP breaks into the MRM Magic Quadrant as a challenger based on its related functionality and therelatively large number of clients that use mySAP for marketing purposes. SAP provides planning,workflow and content management capabilities that facilitate multiuser and external collaboration onmarketing programs. Although, to date, most SAP MRM-related deployments have focused almostexclusively on direct-marketing activities, the ability to use it for broader marketing initiatives is generallyavailable, as demonstrated by one of SAP's clients that has more broadly deployed MRM-relatedfunctionality.

6.5 Visionaries Attract Attention as Enterprises Look to the Future of MRM

Who should consider a visionary? Enterprises that are interested in leveraging underlying technology,progressive architecture and integration capabilities or a powerful vision for leveraging analytics aroundmarketing resource optimization should consider visionaries, recognizing that such vendors presenthigher viability risks.

Elateral offers a strong vision as to the level of integration among MRM functional components thatleading marketing organizations will strive for in the future. Although it offers a broad range of integratedMRM functionality, the emphasis is on the customization, management and distribution of marketingcommunications (that is, particularly for and through distribution channels). Despite managementturnover, Elateral continues to forge ahead with integration between its MRM application and othermarketing and sales automation tools, as well as enhancing analytic capabilities. Its clients includeMicrosoft, Volvo and Cisco Systems.

SmartPath entered the MRM market with a strong value proposition initially focused on the agency side.Its product offering and market efforts have evolved to focus on the requirements of marketing-intensivebrand companies. SmartPath is built on an innovative distributed application architecture that makes iteasy to tailor the product. It also makes it easy for various internal functions and external partners tomanage their own users and customize extended-enterprise workflow. SmartPath provides solid breadthand depth of MRM functionality that enables enterprises to manage the complete marketing workflow,including planning, budgeting, design, print specifications, purchase of materials, mailing lists and media.Among SmartPath's clients are GlaxoSmithKline, Kohler and Target.


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Unica entered the MRM market last year with Affinium Plan, emphasizing planning, budgeting andexecutional coordination of marketing activities. Although initial references cited some performance issuesand administration complexities, Unica has already addressed these deficiencies and has begun todeliver an MRM offering that leverages its analytic automation capabilities. Unica's initial MRM clientsinclude Best Buy, Fleet and Intuit.

Veridiem is a unique entry in the MRM space, with its focus on the data-gathering and pre-analyticpreparation processes, along with advanced analytics and simulation to drive marketing effectiveness.The company gets high marks from its early clients for its vision and consultative capabilities inaddressing complex marketing data obstacles. Its vision for the development, deployment and use ofoptimization models and marketer-driven simulation will likely set the standard for future MRM analyticrequirements. Among Veridiem's clients are Porsche (North America), AutoNation and Kraft.

6.6 Some Established and New Niche Vendors Also Benefit From Increased Interest

Who should consider a niche player? Enterprises should consider niche vendors if they are looking forMRM-related point solutions that have been proven capable of addressing specific business issues butlack proven deployments of other MRM functionality components. Enterprises may also consider thesevendors if they do not mind — or even prefer — vendors that are focused exclusively on a particulargeography.

Arasys Technologies (formerly CS Tech) is focused on offline fulfillment and delivery capabilitiesassociated with MRM. Although its Web-based product tightly integrates and automates complexmarketing collateral supply and delivery across large direct and indirect distribution channels, it does notsupport online collateral management, lacks breadth of MRM functionality and the current versiondepends on a mostly proprietary architecture. However, the company has begun development on a moreprogressive, standards-based application architecture. Arasys' initial clients include Rockwell Automation,Allstate and Jackson National Life.

AssetLink has distinguished itself as an MRM-related point solution for automating marketing activitiesrelated to product packaging design, brand identity management and guided creative development.Reference clients cite its strengths as an intuitive user interface, ease of configuration and integration withSAP R/3, although the system's concurrent user scalability is mentioned as a weakness. AssetLink clientsinclude Godiva, McCann-Erickson and Syngenta (Novartis Crop Protection division).

BrandWizard Technologies remains focused on brand identity, packaging and guided creativedevelopment point solutions. Although BrandWizard's approach relies more on customization thanprepackaged functionality, the company gets high marks from its clients for its ability to meet agreed-ondeadlines and budgets, as well as the overall quality and scalability of its solutions. Among BrandWizard'slargest MRM-related deployments are General Motors, Hewlett-Packard and Dell Computer.

Citat is the most experienced MRM vendor in Europe and continues to expand its MRM offerings andcapabilities. The acquisition of Adrian and strategic relationship with Aprimo allow Citat to offer a broadrange of MRM product and services — from a prepackaged entry-level application to a highly customizedenterprise offering. Overall, Citat's MRM product offerings get high marks from clients in terms of ease ofuse, workflow and content creation, as well as administration, although some references cite a strongdesire for improved content search capabilities. Citat's largest MRM deployments include Ericsson,Skanska and Telia.

PeopleSoft enters the MRM Magic Quadrant as a niche vendor because it provides MRM-relatedfunctionality (for example, planning, budgeting, workflow and approvals) with emphasis centered on direct


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and interactive marketing activities. PeopleSoft lacks substantial MRM deployments with respect to broaduse of functionality across marketing activities and the overall number of users. PeopleSoft's referenceMRM-related deployments include Thomson Financial, OpenTV and the Gemological Institute of America.

Then... (actual name) emerged from a creative agency's response to Dell's requirements and evolved intoa set of MRM-related products and services that mostly focuses on executional coordination of brandasset and marketing collateral management, procurement and print-on-demand distribution. Among itsinitial clients are Advanced Micro Devices, Dell and SoftBrands.

6.7 Likely MRM Magic Quadrant Candidates

The most-likely candidates for a future MRM Magic Quadrant include marketing automation vendorMarketSoft as well as CRM suite vendors E.piphany and Siebel Systems. MarketSoft already launched itsDemandMore Programs application last year (that is, with Fidelity Investments as its first client) but lackedsufficient reference accounts to be considered for the current MRM Magic Quadrant. E.piphany has goodawareness and credibility within the marketing function but remains mostly focused on validating itsposition as a CRM suite, focusing on sales and service functionality and customer-centric CRMprocesses; but it plans to leverage its workflow capabilities around internal and external focused MRMrelated processes. Siebel continues to expand its marketing-related functionality and is keen onaddressing operational requirements associated with MRM.

To date, digital asset management vendors (such as Artesia Technologies, Documentum and MediaBin)have approached the MRM market from an asset-centric perspective. Although this approach aligns wellwith users responsible for the collection and management of marketing content, it is less well suited formarketing users who tend to have a strong plan, project and program management orientation. Digitalasset management vendors lack sufficient MRM-related functionality to qualify given the latest MRMMagic Quadrant criteria. However, if they leverage their BOB digital asset management capabilities andbuild out or acquire and integrate required MRM functionality and related intellectual capital, they couldagain enter the MRM arena.

Large enterprise application vendors are likely to succeed in selling MRM applications into theirestablished client bases. Nevertheless, a few BOB MRM vendors will survive and even thrive based ontheir ability to deliver a more flexible architecture, ease of integration and deployment, and a rich set ofvaluable functionality, including advanced marketing-specific knowledge management and resourceoptimization analytics.

Ultimately, the MRM market continues to grow and attract attention from vendors and enterprises thatseek to automate marketing planning, execution and measurement. MRM vendor selection should bebased on the ability to meet the enterprise's current and emerging requirements for modernizing themarketing function, keeping in mind that considerable evolution will occur in the MRM vendor marketduring the next 12 to 18 months. In the long run, the main MRM challenge for enterprises is to find asuitable balance between:

• A drive toward standardization of marketing processes and application ease of use to ensure end-useradoption

• Supporting the flexibility needed to meet the diverse end-user requirements that drive ongoing use

7.0 E-Marketing: Multichannel Marketing Emerges

Key Issue: How can the marketing function better focus on value creation by leveragingtechnology in its operations?


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Strategic Planning Assumption: By 2004, e-marketing will consolidate into the broader market ofmultichannel marketing automation (0.9 probability).

The Internet is maturing as a business channel, strengthening its role as an enabler of multichannelenterprise marketing efforts. Enterprises are recognizing e-marketing's role in their businesses, and theyare looking for solutions that will integrate online marketing with other marketing activities, instead ofapproaching the Internet as a "siloed" business segment. Thus, Gartner has refined the inclusion criteriafor the e-marketing Magic Quadrant. A greater emphasis is placed on addressing e-marketing as part ofan integrated marketing solution and less focus on e-marketing-related functionality — for example,affiliate marketing and online advertisement management — which is more-frequently addressed byfunction-specific point solutions. Below are the placements for vendors on the Gartner E-Marketing MagicQuadrant. For the specific vendor positions in Gartner's Magic Quadrant for this market segment, see "E-Marketing MQ, 1H03: Multichannel Marketing Emerges," M-19-3331.

Table 8. Gartner's E-Marketing Magic Quadrant: First Half 2003


E.piphany Teradata, SAP, SAS,PeopleSoft and SiebelSystems

Oracle, Blue MartiniSoftware, ATG andVignette

Unica, Broad Vision andKana


In the 2002 e-marketing Magic Quadrant, Gartner noted that for the traditionally single-channel-focused"e-players" to survive, they would have to focus on ways to:

• Help enable enterprises to integrate channel activities, for example, Art Technology Group (ATG)

• Forge strong partnerships with, or be acquired by, larger suite vendors looking to offer integrated e-channel functionality within broader product offerings (for example, BroadVision and Teradata)

• Evolve to focus on strengths beyond e-marketing (for example, Vignette and Blue Martini Software).

Since then, examples of all of these approaches have appeared in the marketplace.

7.1 Leaders

No new vendors have advanced into the leaders' quadrant to join E.piphany. However, the challengersand some visionaries are making steady progress toward the leadership position, with Siebel Systemsand Oracle well positioned to enter this quadrant in the next 12 months. Market leadership requires notonly the ability to execute, but also a compelling vision that drives the market, supports customer demandfor competitive differentiation and forces other vendors to seek to match what leaders are doing.

Enterprises should consider a leader when financial and market execution are important, usually alsoassociated with strong partnerships with implementation companies. Leaders are steps ahead of thecompetition in most functionalities, and they have a clear vision for the future of the market.

E.piphany is a leader in e-marketing, but it must continue to further develop and leverage its strengths inanalytics and personalization if it expects to maintain its lead over other vendors, particularly the CRMvendors that are approaching the leaders' quadrant. It is critical that E.piphany does not lose focus on itsmarketing expertise while it fleshes out its offerings in sales and customer service. Enterprises cite results


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such as increased average-order sizes and higher campaign response rates that were based onimplementing E.piphany.

7.2 Challengers

Supporting the needs of their established — and typically large — customer bases often driveschallengers' successes. However, the lack of a strong vision to drive the market limits their leadershipcapability. Challengers are often excellent choices for enterprises looking for robust functionality andstability today but willing to grow with the vendors toward future functionality.

Enterprises should consider challengers when concerns exist regarding vendor stability, or integrationwith the vendor’s other enterprise application offerings is more important than a strict focus onfunctionality. Enterprises should be willing to grow with the vendors as they flesh out their offerings.

Although PeopleSoft has executed on its earlier e-marketing vision, particularly with the acquisition ofAnnuncio, integration of the Annuncio user interface with the PeopleSoft browser interface has notoccurred. PeopleSoft has shown promising direction in the area of customer dialogs, but it does not havean overall e-marketing vision for the future. The Annuncio acquisition brought strengths to e-mailexecution but less to broader e-marketing functionality, which PeopleSoft is developing. Enterprises citereduced campaign creation time and the ability to "add a large amount of customer contacts that we'vemade in the past year using this tool," and confirm PeopleSoft's strong e-mail execution capabilities.

SAP is positioned in the quadrant as a strong challenger, but its strength of execution is mostly driven byits ease of integration into its installed customer base. It has had more-limited penetration in enterprisesthat do not have SAP applications in-house. Although it offers baseline e-marketing functionality, SAP'sposition is also a reflection of a strong financial outlook. Although e-marketing rarely drives the sale ofSAP products, SAP is beginning to demonstrate traction for its overall marketing functionality.

SAS and NCR's Teradata Division are new entries to the e-marketing Magic Quadrant. SAS and Teradatahave good e-marketing functionality and strong ability to execute, although they do not position theirfunctionality in ways that drive the market. Their e-marketing functionality is more of an integratedcomponent of their overall marketing functionality (as it should be), but it is not positioned as a primarystrength.

Although the evolving success criteria for e-marketing have caused many vendors to move back since the2002 e-marketing Magic Quadrant, Siebel Systems has held strong and is well-poised to move into theleaders' quadrant. Siebel must grow its vision of an e-channel that integrates into a robust, multichannel,customer-analytic solution. If this is accomplished, Siebel is likely to move into the leaders' quadrant in thenext 12 months. Enterprises indicate that Siebel's e-marketing functionality was promising and is beingused as a part of their overall Siebel implementations, with the functionality being added over time.Current users appreciate the ability to automate their processes and deliver campaigns quickly andconsistently.

7.3 Visionaries

Visionaries have a good understanding of market direction, but they sometimes struggle to be heard inthe market. Visionary vendors may have the right pieces in place for execution, but they have not fullyproven that vision in the market. The challenge to these vendors is to execute on their vision before theircompetitors pick up on the vision and run with it.


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Enterprises should consider visionaries when cutting-edge functionality is key, and an understandingexists of where the market is, and where it is heading. Enterprises should be willing to risk using a less-proven application or vendor in exchange for competitive advantage.

ATG has a strong vision focused on its e-channel routes, positioning it as an e-channel enabler to othermultichannel solutions. However, like many early e-channel players, ATG is struggling to find anappropriate financial model.

Blue Martini Software is focused on two vertical industries: retail and manufacturing. It is making goodprogress in both, although it has strayed from its e-marketing roots to try to become a more-multichannelCRM player. References cite good e-merchandising functionality and indicate that Blue Martini is easy tomaintain and has good order processing and ability to serve content.

Oracle's vision has strengthened since the 2002 Magic Quadrant, with a well-placed focus on areas suchas dialogs and workflow. Future positive movement will depend on its ability to successfully execute onthis vision. If it finds traction, it will be well positioned to move into the leaders' quadrant in the next 12months.

Vignette and BroadVision are focusing on their strengths in content management and portal applications,areas with which the market identifies these vendors. Vignette's acquisition of Revenio and BroadVision'sstrengthening partnership with NCR display their commitment to enhancing their e-marketing functionality.However, both are struggling financially in the aftermath of the dot-com bust.

7.4 Niche Players

Niche players may have vision and functionality to support a specific target market. Alternatively, theymay be new entrants that are building the pieces to move into the challengers or visionaries quadrants.Finally, they may be established vendors that are falling back to niche status because their offerings arefailing to keep pace with the market's evolution.

Enterprises should consider niche players when they are focusing on a piece of functionality, technologyor industry-specific solution. Enterprises can benefit from selecting a niche player if they are focused ontactical requirements.

Kana has repeatedly delayed the consolidation of its Broadbase acquisition; its business model is intransition. Its position makes Kana an acquisition candidate for a large software vendor that is consideringentering or expanding its presence in the CRM market by using Kana's J2EE architecture. Enterprisescommented that Kana is an excellent tool for workflow and rules-based e-marketing campaignmanagement, but the stability of its application could be improved.

Although Unica is a strong vendor of marketing applications, its e-marketing strengths are primarily in e-mail marketing management. Comments from references indicate that Unica does what it promises to do,and connects to databases from all sources relatively easily.

7.5 The Future for E-Marketing Vendors and Solutions

Because the benefits of e-marketing are with integration into a broader marketing multichannel scenario,offerings from e-marketing vendors will continue to consolidate into base capabilities that are added tobroader suites. Therefore, traditional CRM suite vendors (such as E.piphany, Oracle, PeopleSoft, SAPand Siebel) likely will enhance — through acquisition or development — e-marketing functionality in theirmultichannel offerings.


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Gartner also is tracking the emergence of marketing automation suites. Marketing is a large enterpriseexpense component with low levels of automation, and marketing automation suites will seek toconcentrate on the marketing function, while bringing deep functionality tailored for unique marketingneeds. The analytic vendors (such as SAS, Teradata and Unica), which seek to develop the relevancybehind the marketing message, are well-positioned to develop suites of marketing applications thataddress the spectrum of enterprise marketing, including e-marketing functionality.

The ability to integrate e-marketing into an overall multichannel solution has matured into a mainstreamrequirement. Type B enterprises (that is, mainstream adopters of technology) should already be in theprocess of doing this. Type C enterprises (lagging adopters of technology) that deploy e-marketingstrategies from a single-channel perspective will be at a significant competitive disadvantage. Type Aenterprises (aggressive adopters of technology) should strive for seamless, real-time integration from allcustomer touchpoints, including the e-channel.

Ultimately, E.piphany is the only e-marketing Magic Quadrant leader, but other CRM suite vendors arechallenging its position. E-marketing solutions will consolidate into the broader market of multichannelmarketing automation by year-end 2003.

8.0 Leaders Prevail in the North America Customer Relationship Optimization Magic Quadrant

Key Issue: How will marketing communications evolve to craft optimal dialogues with consumers?

Key Issue: How will marketers fill the gap between data and insights that are acted on?

Customer relationship optimization (CRO) is a maturing market. Enterprise suite vendors are improvingtheir CRO offerings, but their momentum has been slow, enabling the traditional players to retain theirleadership positions in the first half of 2003.

The tendency of large vendors to slow enterprise buying decisions prior to serious market entry is atypical characteristic of a maturing market. This can create a problem for established vendors that arelooking to maintain market momentum. It also risks creating a "maturity gap," whereby an increasinglysmall number of BOB vendors remain ahead of a new wave of vendors with solutions that are not readyfor widespread deployment. This is a major issue in the CRO market, as the traditional leading vendorsstruggle to maintain their market presence, and the suite vendors attempt to develop strong solutions andmarket credibility. Below are the placements for vendors on the most recent Gartner North America CROMagic Quadrant. For the specific positions of these vendors in Gartner's Magic Quadrant for this marketsegment, see "Leaders Prevail in the North America CRO Magic Quadrant," M-19-2611.

Table 9. Gartner's North America CRO Magic Quadrant Positions


Teradata, E.piphany andUnica

SAS, Siebel Systemsand DoubleClick

Aprimo, Chordiant andExchange Applications(Xchange)

SAP, PeopleSoft, BlueMartini Software,NuEdge Systems,Oracle and Kana

Source: Gartner Research (as of January 2003)

This situation presents enterprises with a choice between a relatively small number of vendors that havestrong solutions and a larger group of suite vendors. The members of the latter group are selling their


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solutions based on the integration of their limited functionality with the rest of their suites and a vision ofdeeper functionality for the future. Vendors in the CRO market can be classified into three categories:

• "Pure play" vendors: Most of these providers have been acquired during the past few years, and thosethat remain (such as Aprimo, Blue Martini Software, DoubleClick, Unica and Xchange) are movingtoward the emerging concept of a marketing suite. Although their application development in CRO islikely to remain strong, they will be targeting audiences in marketing, rather than broadening CRO intosuch functions as sales, service and business operations. Targeting the marketing function will pushtheir development into other areas of functionality.

It is important to note the distinction between MRM and CRO. CRO applications define andcommunicate the value proposition of the organization to the customer, ensuring the profitablecreation, development and maintenance of the customer relationship. On the other hand, MRMapplications are designed to improve the use of marketing resources. The focus is on designing andcreating a marketing strategy, determining the best allocation of marketing budgets, managingmarketing skills, and effectively tracking and supporting marketing processes (for example, incollateral creation).

• Analytic suite vendors: Providers such as SAS Institute and NCR's Teradata Division combine deepanalytics and infrastructure functionality with their CRO capabilities. CRO will remain a key initiativefor these enterprises because it expands their scope into more action-oriented business processes,rather than limiting them to abstract analytic roles. The size of these vendors enables them to achievea greater vertical focus than their pure-play competitors, particularly in such areas as prepackagedanalytics and data models.

• CRM suite vendors: This category — which includes Chordiant Software, E.piphany, Kana,PeopleSoft, SAP and Siebel Systems — was the last to target the CRO market. E.piphany's strongposition is due to its origins in this market prior to its expansion to a suite vendor. CRM suite vendorsuse CRO to provide the business logic and customer insight that can guide their operational systemson how to treat the customer. CRO is of more-variable importance to these vendors than the othercategories. For some, CRO forms the strategic underpinning for all CRM activities; for others, it is justanother piece of functionality of minimal importance compared to the value of selling thousands ofsales or service seats. The maturity of the vendor's vision and its ability to execute on this integratedvision is best reflected in the Magic Quadrants for B2B and B2C CRM suites.

8.1 Leaders

No new vendors have attained market leadership during the past nine months. Increasingly, thechallengers — and even some niche vendors — will lay claim to market leadership based on the numberof customers that they can claim in specific verticals or by aggressive bundled selling of this functionalityin a broader suite sale. However, market leadership implies more than just success at selling — it alsorequires a compelling vision that other vendors seek to match and that supports the desire of customerorganizations for competitive differentiation. Only three vendors enter 2003 in this position.

E.piphany: This vendor continues to experience strong differentiation through its real-timerecommendation engine. The E6 rewrite of the application code base into J2EE appeals to the manyenterprises pursuing a Web services architecture. Ongoing concerns about E.piphany's viability tend toact as a hurdle, rather than an obstacle to customer selection of E.piphany. During 2003, the companymust reinvigorate its marketing capabilities if it is to maintain its industry-leading vision.


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Teradata: Its CRM applications continue to have strong appeal to its customers; but, more importantly,they serve as a testament to the analytic power of the Teradata platform, effectively pulling a small butgrowing number of customers into its environment, rather than automatically eliminating Teradata from theshortlist. Its success in the CRM market increasingly depends on the competitive differentiation of theTeradata platform. A recent reorganization should result in more-consistent availability of capabilitiesacross verticals and yield better integration of its somewhat disparate application portfolio.

Unica: Adroit marketing, solid functionality and problems being experienced by its traditional competitorsdrive Unica's continued success in the market. Unica's "pull the data from anywhere" concept appeals toenterprises that dislike other vendors' need for proprietary or dedicated data marts, although its valuereally lies in quick time-to-market and more-flexible access to data. During 2003, Unica will continue todevelop its marketing suite, broadening the range of functionality — mainly in the area of MRM — anddeepening the integration of its CRO application for a marketing user.

8.2 Challengers

Challengers have applications that may be rich enough to support the needs of their established (andtypically large) customer bases but lack the "mind share," experience or functionality to push into themarket on a stand-alone, BOB basis. Challengers may become market share leaders because serving themainstream of the market requires the ability to execute as a fast follower, rather than the visionary newdevelopment required to support visionary customers.

DoubleClick: The acquisition of Protagona provides DoubleClick with a dramatic entrance into this market.Protagona had strong functionality, but it struggled to establish market presence against larger and more-aggressive competitors. DoubleClick now has an opportunity to sell Protagona into its customer base andthen take this renewed momentum to the broader market. Given DoubleClick's history of disparateacquisitions and the difference in traditional target audiences between Protagona (that is, financialservices) and DoubleClick (that is, retail), executing this strategy will be the challenge.

SAS: SAS continues to target this market, and the acquisition of Verbind gives it the raw materials withwhich it can establish "thought leadership." Recent product releases have concentrated on verticalizationand improved usability for the business user. However, market visibility is lacking for its packagedapplications, even within SAS's customer base. The company's ability to push beyond its traditionalanalytic users and into mainstream marketing departments will be key to its success in 2003.

Siebel: The company is beginning to include the components that leading customers look for in itssolution, but its ability to communicate this message independently of the overall suite message (that is,to lead with this solution against BOB competition) has yet to be demonstrated. Although Siebel hasbegun to gain better recognition and penetration in the B2C market, execution is still stronger in B2B,where the needs for such a solution are less complex. Siebel is having increasing success selling CROinto its customer base.

8.3 Visionaries

Visionaries are vendors with a good story that are struggling to be heard in the market. Buildingmomentum is critical, particularly as the market consolidates and larger challengers blur the market andlearn the buzzwords to claim a similar vision.

Aprimo: With a traditional customer base within B2B-oriented verticals, Aprimo's lead managementcapability and process support for campaign management yield good differentiation in the market. During


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2003, Aprimo will have to expand its current functionality to meet the expectations of B2C campaignmanagement.

Chordiant: An enigma in this market, Chordiant has demonstrated strong recognition for its marketingsolution in the Europe, Middle East and Africa (EMEA) region; but this has not translated to North Americawhere the company is oriented toward big CRM suite deals, including accompanying services. During2003, Chordiant is refocusing the North America direct sales channel for its Marketing Director product tofocus on specific high-end B2C accounts.

Xchange: On 19 March 2003, Amdocs purchased Xchange and plans to incorporate the Xchangeproducts as new integrated modules within the Amdocs ClarifyCRM application suite. Because of itsinstalled base, Xchange remains a market factor; however, even its strong Value In Play concept for real-time customer interaction has done little to reassert its presence in the market. Without drastic action toaddress concerns over short- and long-term viability, Xchange will continue to suffer from relatively slowmigration of customers to Xchange 8 and a lack of traction in new deals.

8.4 Niche Players

Niche vendors can be divided into three categories. The first includes the "true" niche players — providerswith the vision and functionality to support a specific target market. The second category is new entrantsthat are still building the functionality, vision and mind share that will drive them into the challengers' orvisionaries' quadrants. Finally, some vendors are retreating back to niche appeal because their vision andmarket presence have failed to keep up with the evolution of the market.

Blue Martini: Blue Martini enters this quadrant as a good option for enterprises with a retail or direct-to-consumer orientation, including companies in such verticals as manufacturing or consumer packagedgoods. Within its target markets, Blue Martini is an increasingly strong candidate and should be includedon users' shortlists.

Kana: Having done little to move its acquisition of Broadbase Software beyond its e-marketing origins,Kana struggles in broader, multichannel marketing deals outside the contact center. Without a significanteffort to improve its functionality, Kana will be limited to e-marketing deals within its customer base.

NuEdge: With its market strength coming from its marketing services — sold in conjunction with a solidbut undifferentiated product — NuEdge appeals to midmarket enterprises in the retail and financialservices industries that are seeking support and guidance after the sale, as opposed to a more-traditionalsoftware engagement.

Oracle: Oracle's marketing application vision extends beyond its traditional strength as an e-businesssuite into the broader multichannel marketing space. However, Oracle must still prove its ability to deliverthe product and the market position against this vision.

PeopleSoft: The most interesting of the enterprise suite vendors, PeopleSoft is building a vision of itsmarketing products as part of a total ERP suite. This is compelling, and some elements of this (such asthe Advisor and Dialog Marketing components) are now visible in the product. However, PeopleSoft is stillworking on the full integration of its Annuncio acquisition, with different user interfaces belying theunderlying data integration.

SAP: Although its solution has encountered difficulty finding acceptance outside its installed base,ongoing enhancements to its functionality make it increasingly difficult for competitors to displace SAPwithin their installed base.


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8.5 Honorable Mentions

Amdocs: The combination of Amdocs' established campaign management system and the ClarifyCRMsuite should have resulted in more market visibility, but Amdocs has not been able to build on the callcenter traction it had in the telecommunication market and extend it into marketing. Amdocs is likely to bea significant new entrant to the market, but this will not take place during 2003. For additional information,see "Amdocs Acquiring Xchange Will Help Telecom, Financial Customers," FT-19-5573.

DataDistilleries: E.piphany's strongest direct competitor in the area of real-time recommendations,DataDistilleries has expanded its functionality to include campaign management, but it has de-emphasized its goals for U.S. expansion in favor of paying more attention to its European base.

Marketing service providers: A variety of vendors provide an alternative, service-driven approach to thisfunctionality. Particularly interesting vendors in this market include Acxiom, Epsilon, Experian InformationSolutions, Harte-Hanks and Seurat.

Although many vendors are developing solutions in this market, enterprises looking for BOB functionalityfrom strong market players have relatively few options. Among BOB vendors, consider E.piphany orUnica. Enterprises willing to operate within a Teradata environment should consider Teradata, which hasBOB functionality. B2B enterprises should have Aprimo on their shortlists, and retailers should considerBlue Martini. DoubleClick and SAS have the potential to become market leaders during the next six to 18months, but they are not appropriate for all enterprises at this time. PeopleSoft has done the most todevelop traction for its marketing application as a stand-alone solution; however, applications from Oracle,SAP and Siebel have all matured to the point where they could be considered by their current customers.

9.0 Partner Relationship Management

Key Issue: How will technology impact the evolution of sales channel and customer relationships?

Key Issue: How will enterprises drive profitable loyalty while satisfying increasingly demandingprospects and customers?

Strategic Planning Assumption: By 2005, three or fewer viable best-of-breed PRM vendors will beremaining because of acquisitions, consolidation and attrition (0.8 probability).

Strategic Planning Assumption: By 2005, enterprise application suite vendors will command more than 70percent of new PRM application license revenue (0.7 probability).

PRM applications help enterprises better manage partner relationships and have improved the efficiencyand effectiveness of marketing and sales to partners, as well as servicing of partners. More-recent PRMapplication enhancements leverage distributed architectures that further enable enterprises to extendcollaborative business processes through their demand network partners and to end customersthemselves.

Enterprises that depend on demand network partners to provide value-added services (such asdistribution, vertical marketing and sales reach) or to provide localized operations and customer serviceand support recognize that indirect relationships need to be properly orchestrated to compete effectively.

Therefore, despite a challenging economic environment, PRM continues to gain momentum. To date,PRM applications have helped enterprises better manage partner relationships and have improved theefficiency and effectiveness of marketing and sales to partners, as well as servicing of partners. More-recent PRM application enhancements leverage distributed architectures that further enable enterprises


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to extend collaborative business processes through their demand network partners and to end customersthemselves.

From a vendor perspective, Siebel Systems' PRM offering (formerly named eChannel) continues to gainmarket share as the company leverages its ability to execute and enhances its vision to support evolvingPRM requirements and integrate PRM within its vertical application offerings. Although the economicdownturn has slowed the growth and raised viability issues for some of the BOB PRM vendors, a fewcontinue to distinguish themselves by their breadth or depth of functionality and progressive applicationarchitectures that support more-flexible, dynamic demand network processes. The entrance of ERP giantsOracle, SAP and PeopleSoft has already begun to affect the PRM market, as their clients that seek PRMsolutions begin to seriously consider the PRM capabilities of their enterprise application suite vendor(s) ofrecord and even select it as vendor of choice. Table 10 shows Gartner's 2003 PRM Magic Quadrantvendor placements.

Table 10. Gartner's 2003 PRM Magic Quadrant Positions


Siebel Systems SAP Blue Martini Software,Allegis, ComergentTechnologies, ClickCommerce andChannelWave Software

Oracle, PeopleSoft,Onyx Software, Pivotal,Azerity, interlinkONE,MarketSoft and InfoNow


For the specific positions of these vendors in Gartner's Magic Quadrant for this market segment, see"Partner Relationship Management: 2003 Magic Quadrant," M-19-3400.

9.1 Leaders

Who should consider a leader? Consider a leader if the enterprise can benefit from broad deployment ofcore PRM prepackaged functionality that is strong overall — but may lag behind BOB offerings in someareas — and tightly integrated as a PRM suite, and the enterprise has or is likely to have many-to-manyrelationship requirements that require the enterprise to interface with partners and customers.

Siebel Systems continues to be the clear PRM market share leader. Siebel is the only vendor to offer bothstrong CRM and PRM functionality, which is important for enterprises seeking a multichannel, direct andindirect selling solution. Siebel also provides a proven enterprise platform with strong scalability andglobalization capabilities. Siebel PRM delivers a high degree of business process support and continuesto evolve with more-useful features; and Siebel is the only vendor that offers multiple, vertical-specificversions of its PRM offering. Although some reference clients cite integration with other non-Siebelapplications as an ongoing challenge, Siebel is addressing this issue with its Universal ApplicationNetwork initiative; but it remains a relatively unproven approach that lacks substantial productionreferences. Among Siebel's largest PRM deployments are IBM, Hewlett-Packard (Compaq) and Renault.

9.2 Visionaries

Who should consider a visionary? Consider a visionary if the enterprise has many-to-many relationshiprequirements (such as when customers need to interface with the enterprise and its partners or whenpartners can benefit from greater collaboration among themselves), where PRM focus is to improve


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relationships with partners as well as work with and through partners to improve the end-customersatisfaction and enhance the overall value of the demand network.

What distinguishes the visionaries in the PRM Magic Quadrant are their distributed architectures andsecurity models that make it easier for enterprises to implement processes that support many-to-manyrelationships common to advanced demand networks with challenging extraenterprise relationship andworkflow requirements.

Allegis: On 28 March 20003, Click Commerce acquired Allegis for its breadth and depth for noncommercePRM functionality. Although Allegis lacks such capabilities as sales configuration and sell-side electroniccommerce, the combined offering from Click Commerce should address such issues. Allegis continues toget high marks for its ease of use, integration and administration that make it easier to handle large,complex partner management networks and global requirements. It has also begun to serve financialservices companies. Among Allegis' largest deployments are Microsoft (that is, Europe, Middle East andAfrica), Hewlett-Packard (that is, the PartnerONE Program) and Dow Corning.

Blue Martini Software released its vertical-industry CRM suite for manufacturers in August 2002, enablingit to become a more viable player for manufacturers with B2B CRM and PRM requirements. The modular-component suite supports marketing, lead management, sales configuration, quoting, order managementand customer service. With the new suite, Blue Martini has improved its ability to handle distributed order,lead and opportunity management processes. Customer references cited Blue Martini's main strength asits flexible platform and ease of use, as business users can readily manage and publish their own Webcontent. Blue Martini's largest deployments include Harley-Davidson, Wavin and Jafra Cosmetics.

ChannelWave Software provides broad functionality that facilitates partner management and enhancespartners' marketing, sales and service capabilities, relying on an open architecture platform that supportsemerging many-to-many relationship requirements. ChannelWave has established itself as a reputablePRM vendor, with particular focus on the partner network needs of high-technology andtelecommunication companies, with clients that include BEA Systems, Intel and Qwest CommunicationsInternational. ChannelWave references express a high degree of satisfaction with its implementation andsupport services, with most references stating that initial deployments were completed in 90 days or less.

Click Commerce provides broad functionality and has become a PRM vendor of choice for durableindustrial product manufacturers. Despite a revenue decline of more than 50 percent in 2002 relative tothe previous year (that is, mostly because of a significant decline in the number and average size of newclient contracts), Click Commerce continues to have outstanding customer references. References revereits dedication to the success of their initiatives and highlight the Click Commerce Relationship Manager asa solid tool for managing distributed security, roles, marketing content, product data and customerhierarchies. Click Commerce has established solid relationships with key technology (Microsoft) andsystems integration (Accenture) partners. Among Click Commerce's largest deployments are KawasakiMotors, Motorola and Emerson. For additional information, see "Amdocs Acquiring Xchange Will HelpTelecom, Financial Customers," FT-19-5573.

Comergent Technologies provides a compelling architecture that readily enables integration to disparateback-office and legacy applications, with particular emphasis on the ability to support distributed e-commerce. Comergent already delivers guided selling, product configuration and order managementcapabilities; and it continues to make progress in providing broader and deeper application functionality inother PRM areas. Comergent's reference accounts cite high-caliber and responsive service. Among itslargest PRM deployments are Nissan, Cisco Systems and Maytag.


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9.3 Challengers

Who should consider a challenger? Consider a challenger if the enterprise places strong emphasis onvendor viability or has already implemented other applications from the vendor in a different area (forexample, ERP) and desires pre-built integration between the desired PRM functionality and vendorapplications that have already been deployed successfully.

SAP enters the Gartner PRM Magic Quadrant as a challenger based on good sell-side e-commercefunctionality and a large installed base of customers in the manufacturing sector that are strongcandidates to adopt an SAP PRM offering. However, SAP lags behind BOB vendors and Siebel PRM incore partner life cycle management capabilities. Gartner has taken a substantial number of inquiries fromSAP installed ERP customers seeking vendor alternatives for this aspect of PRM efforts. Customers thatimplemented SAP ERP will find SAP's Partner Portal attractive for extending their implementation tobusiness partners for sharing enterprise data (such as order information, availability, status and accountmanagement information) that resides mostly in other SAP applications.

9.4 Niche Players

Who should consider a niche player? Consider niche vendors if the enterprise has tactical businessobjectives related to PRM (such as improving partner lead conversion or demand planning andforecasting). Because of viability concerns, enterprises should adopt a planning assumption that nichePRM-specific vendors will remain independent no longer than 24 months.

Azerity continues to offer broad PRM-related functionality focused specifically on the needs of enterprisesin the semiconductor industry. Client references report that Azerity's strengths are the general ease of useand administration of its application and the tight integration with distributors' point-of-sale systems thatfacilitates financial reconciliation. Among Azerity's largest PRM deployments are Micron Technology,Cypress Semiconductor and Texas Instruments.

InfoNow has traditionally provided a solution that lacks breadth of built-in PRM but is recognized by itsclients for its distributed architecture and the level of flexibility and customization available to tailor specificcommunications between the enterprise and its partners and customers. More recently, InfoNow hasleveraged its distributed architecture and integration capabilities to focus on the high-value issue ofdemand network reporting, forecasting and planning. Among its largest PRM deployments are AppleComputer, Bank of America and Hewlett-Packard.

interlinkONE provides a flexible platform with broad PRM-related marketing and sales functionality.Although the product lacks depth of functionality in many areas and the quality of the end-user interfaceleaves plenty of room for improvement, interlinkONE is cited by its references as a cost-effective andreliable solution. Among its PRM-related clients are ABN AMRO, Cisco Systems and the Fireman's FundInsurance Company.

MarketSoft continues to lead in BOB lead management capabilities but does not deliver breadth of PRMfunctionality to meet broader enterprise requirements. Enterprises focused mostly on lead managementshould consider MarketSoft. More recently, MarketSoft has begun to offer PRM-related solutionsspecifically designed for financial services companies. MarketSoft's largest deployments include Allstate,Cisco Systems and Fidelity Investments.

Onyx Software, with v.3.0 of its partner portal, provides substantially more "out-of-the-box" functionalitythan prior releases and is to be considered for organizations implementing a PRM strategy. Onyx's PRM


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functionality delivers basic opportunity management and content distribution for partners. Onyx hasdemonstrated PRM capabilities in agent/brokerage models for healthcare and financial services.

Oracle enters the Gartner PRM Magic Quadrant based on the strength of its sell-side commercefunctionality and sales configuration technology, both of which have been deployed for use with indirectchannels. Oracle has also made progress in areas such as partner life cycle management and leadmanagement but still trails BOB vendors in PRM functionality related to distributed marketing, sales andservice capabilities that enhance the partner's ability to perform such functions.

Pivotal provides some of the core functionality to be considered by enterprises implementing a PRMstrategy. Pivotal's PRM functionality enables enterprises to provide partners with opportunity managementand sales configuration functionality. To date, Pivotal has not shown significant market traction for PRM.Pivotal's acquisition of MarketFirst will improve its ability to offer lead management to partner sellingchannels.

PeopleSoft has limited customers using its CRM product to manage partner relationships. PeopleSoft'sPRM-related capabilities include lead management, sales opportunity sharing, sales configuration andsell-side commerce. PeopleSoft v.8.8's Internet-based architecture should scale for larger partner saleschannel models but to date remains unproven in large PRM deployments. PeopleSoft lags behind BOB,out-of-the-box partner life cycle management functionality but can be configured to provide most partnerlife cycle capabilities. PeopleSoft's broad CRM footprint makes it a good candidate for enterprises seekingto integrate their partner channel with other customer-facing channels (such as the call center or insidesales).

9.5 Likely Future PRM Magic Quadrant Candidates

Enterprise application suite vendors Baan/Invensys and J.D. Edwards have begun to pursue moreaggressively the PRM market, building out or acquiring and integrating PRM functionality, and mostlyfocusing on penetration of their client bases. Some of these efforts have been stalled as each of thesevendors undergoes substantial or major potential changes.

For example, on 3 June 2003, Invensys plc, announced that it has agreed to sell Baan to an investmentgroup consisting of Cerberus Capital Management, L.P. and General Atlantic Partners, LLC. Theinvestors plan to merge Baan with SSA Global Technologies, which they also control. Over time, Baanplans to offer extended applications — customer relationship management, supply chain managementand product life-cycle management — to SSA customers, but integration challenges will limit large-scaleadoption through 2005. Thus, enterprises should still pay close attention to the overall health of Invensys.

Chordiant Software has begun to leverage the acquisition of OnDemand to focus on the PRMrequirements of financial services providers. It is also possible that vendors such as Haht Commerce andWebridge will provide Gartner with the required information and references to be considered for the PRMMagic Quadrant. In addition, although the PRM vendor space continues to mature and consolidate, itremains likely that new PRM-focused point solution vendors will emerge.

Ultimately, enterprises that are looking to deploy PRM functionality will have to be conscious of the trade-off between the deep PRM functionality, flexibility and experience of BOB vendors and the more basicofferings of large enterprise application suite providers that offer tight integration with their own enterpriseapplications and superior vendor viability. By 2005, three or fewer viable BOB PRM vendors will beremaining because of acquisitions, consolidation and attrition (0.8 probability). By 2005, enterpriseapplication suite vendors will command more than 70 percent of new PRM application license revenue(0.7 probability).


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9.6 PRM Functionality Components

The components of PRM functionality include:

• Partner life cycle management: Partner profiling, partner analysis, partner planning, partnerrecruitment, partner registration, partner matching and partner monitoring

• Demand creation: Campaign management, content and delivery management, market developmentand funds management

• Sales effectiveness: Sales training, partner forecasting, opportunity management, interactive selling,team selling, lead management, sales configuration, proposal generation and partner compensation

• Order efficiency: E-commerce sell-side transaction platform

• Service and support: Service training and certification, order management, service-level management,entitlement management, material reverse logistics

• Analytics and insight: Measurement, reporting and analytic capabilities, leverage of insights toenhance performance

9.7 PRM Software Vendors

PRM software vendors (such as brokers, agents, distributors and value-added resellers) include:

• Allegis (acquired by Click Commerce)

• Azerity

• BigMachines

• Blue Martini Software

• ChannelWave Software

• Click Commerce (acquired Allegis)

• Comergent Technologies

• HAHT Commerce

• InfoNow

• i2 Technologies

• Invensys CRM/Baan

• MarketSoft

• Onyx

• Oracle

• Partnerware Technologies

• PeopleSoft

• Pivotal


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• SAP

• Siebel Systems

• Webridge

10.0 CRM Sales Suite Vendors

Key Issue: How will sales organizations use technology to meet the challenges of changinginternal and external forces and business and market dynamics?

Enterprises implementing CRM sales suites are moving quickly away from the "big bang" deploymentmodel and focusing on specific modules. Therefore, the suite vendors that can configure their products tosolve specific sales problems (such as quoting and proposal generation) will show the most value forenterprises in 2003. This market dynamic will cause the re-emergence of best-of-breed (BOB) vendorsand put a premium on selecting vendors that can move projects into production more quickly.

As the CRM market continues its shake out, two distinct classes of sale's vendor are emerging:

• Vendors with vast global resources (that is, $1 billion-plus in annual revenue)

• Much smaller BOB vendors with limited resources but specialized expertise

Conventional wisdom was that the larger vendors have difficulty producing ROI for sales applications; in arecent Gartner survey, however, the number of sales organizations citing a positive ROI were equal (thatis, 48 percent) for both vendor classes. There were differences, however, between users who selectedthe Goliath types (that is, large vendor) and the David types (that is, smaller vendor specialists).Specifically, those users who felt technical support and time quoted to complete project were moreimportant tended to choose smaller vendor specialists; those users who felt integration and vendorviability were more important went with the larger vendors. Depth of features was not a majordifferentiating factor. The fact that features was not an important factor supports the view that users areless concerned about features and more concerned about achieving ROI sooner vs. later.

Currently, BOB vendors are the preferred option for the majority of active sales deployments. In areassuch as incentive compensation and PRM, enterprises will continue to find the most-functionally-completesolutions from BOB vendors. However, for sell-side commerce, large suite vendors are likely to continueto gain ground.

By 2005, CRM sales suite vendors will provide compelling sell-side commerce solutions for browse-to-buyelectronic-commerce models. Enterprises implementing global deployments with regional localizationsshould consider vendors that possess strong enterprise application infrastructures and geographicpresence in areas where deployment will take place.

The Magic Quadrant measures each vendor's ability to support direct sales, partner sales and sell-sidecommerce technology requirements as well as other sales applications (such as sales configuration,incentive compensation and sales analytics). To be included in the Magic Quadrant, the vendor has to bein the direct sales Magic Quadrant and either the partner relationship management (PRM) or the sell-sidecommerce Magic Quadrant, and have demonstrated the ability to be deployed in a multichannel sellingenvironment.


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Table 11. Gartner's Sales Suite Vendors Magic Quadrant Positions


Siebel Systems SAP PeopleSoft Oracle, Pivotal andOnyx


For the specific positions of vendors in Gartner's Magic Quadrant for this market segment, see "CRMSales Suite Vendors: 2003 Magic Quadrant," M-19-2668.

10.1 Leaders

Siebel Systems remains the only leader for CRM sales suites because of its breadth of functionality,number of live references and solid support for all three selling channels. However, Siebel, like mostvendors, showed a decline in license revenue during the past year, and it is beginning to feel the pressureof larger ERP vendors, especially SAP. Although SAP is not likely to provide more or deeper functionalitythan Siebel, SAP is providing sufficient functionality for a larger portion of SAP's installed base, making itmore difficult for enterprises to justify Siebel. Siebel also continues to show strong vertical functionalityand installed bases relative to other suites in industries such as telecommunication, financial services andconsumer goods.

Another important development during the past year that is a key for Siebel's future is its new UniversalApplication Network integration framework. The framework is intended to ease integration concerns withthird-party applications inside and outside of an enterprise. The success or failure of this framework will bea strong indicator of Siebel's long-term viability.

Siebel is currently addressing a short-term challenge by repackaging its software to support smaller salesinitiatives. In the past, for example, if a partner channel organization wanted to deploy just leadmanagement, it would have to buy the entire Siebel PRM suite and configure it to support the specificsubprocess of lead management. In v.7.5, Siebel offers product bundles that are focused onsubprocesses (such as lead management). In addition, Siebel v.7.5 includes Rapid DeploymentPackages, which are fixed-priced, rapid-time-to-market service solution packages. This will make it moredifficult for BOB competitors to compete against Siebel; however, Gartner has not verified with Siebelreferences that Siebel has been able to sell and deliver on these smaller sales application components.Enterprises should negotiate for only those solution sets required for their first-phase deployment ratherthan pre-buying for phases in later years.

Who should consider the Siebel CRM sales suite?

• Any enterprise with moderate-to-deep functionality requirements across multiple sale channels

• Any large enterprise purchasing a CRM suite for marketing and customer service

Who should consider alternative CRM sales suites?

• Midmarket organizations or departments of large enterprises with light-to-moderate opportunitymanagement requirements across multiple sales channels; also investigate Onyx Software andPivotal

• Large enterprises with an installed ERP vendor that provides good-enough functionality with provenreferences for its sales channel selling model


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10.2 Visionaries

PeopleSoft had a busy 2002 filling out its sales functional footprint. PeopleSoft released the first version ofits new mobile architecture for sales, a new version of the sales configurator, advisor and enterprise pricer— all purchased from Calico — and a new incentive compensation product. The newfound emphasis onfunctionality is based on PeopleSoft's strategy to be a broad business application player (such as SAPand Oracle) but also to provide strong CRM suite functionality to compete head-to-head with Siebelamong non-PeopleSoft customers. PeopleSoft v.8.8 supports multiple sales channel scenarios but lackssignificant functionality for PRM. PeopleSoft has shown promise in its product releases but now has toproduce more live references. Specific proof points are needed to prove that its technical approach tomobile synchronization will scale and be reliable.

Who should consider the PeopleSoft CRM sales suite?

• Any enterprise with moderate BOB sales application requirements that span multiple sales channels

• Any customer considering PeopleSoft's business application suite

• Any currently installed PeopleSoft customer whose requirements span multiple sales channels

• Any large enterprise purchasing a CRM suite for marketing or customer service


• Any enterprise requiring deep functionality for PRM

• Midmarket organizations or departments of large enterprises with light-to-moderate opportunitymanagement requirements across multiple sales channels; also investigate Onyx and Pivotal

10.3 Challengers

SAP remains a challenger because of its ability to provide sufficient functionality for more of its installedbase with mySAP CRM v.3.1 and to produce more live references. Because of its large manufacturinginstalled base, SAP is likely to focus more research and development investment on PRM functionality. Itcurrently has good sell-side commerce capabilities for facilitating order transactions among businesspartners but lags behind BOB vendors in core partner life cycle management capabilities. Gartner hastaken a number of calls from SAP installed ERP customers seeking vendor alternatives for this aspect ofPRM. SAP's sales configurator still trails Oracle and Siebel based on functionality, and its incentivecompensation product is brand new. SAP does offer a mobile platform for disconnected salespeople.However, different interfaces remain in v.3.1 for connected and mobile, forcing disconnected users towork in two environments.

Who should consider the SAP CRM sales suite?

• Any current SAP customer with light-to-moderate functional CRM sales suite requirements

• Any current SAP customer purchasing a CRM suite for marketing or customer service

• Any customer considering purchasing other SAP business applications

• Any customer seeking benefits from tight front-office/back-office integration with SAP



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• Those looking for BOB functionality in a specific area (such as PRM, sales configuration and incentivecompensation)

• An environment where SAP is one of many (that is, five or more) ERP systems with which CRM mustintegrate


10.4 Niche Players

Oracle has improved its vision with the breadth of its Oracle 11i enterprise customer data model. Oraclecustomers cite potential benefits (such as increased customer visibility during the entire prospect-to-cashprocess). Oracle has strong global distribution and implementation strength, a broad sales applicationfootprint (such as sell commerce, sales configuration and incentive compensation) and an integratedtechnology stack. However, Oracle needs to increase the number of live references. Oracle has notproved it can support a mobile direct sales force on a laptop, and some references felt the end-userscreens for the sales online product were cumbersome. References did point out that Oracle wasresponsive and provided good support for bug fix and enhancement requests.

Who should consider the Oracle CRM sales suite?

• Any Oracle customer with light-to-moderate functional CRM sales suite requirements

• Any Oracle customer with deep sales configuration requirements

• Any Oracle customer purchasing a CRM suite for marketing or customer service

• Any customer considering purchasing other Oracle business applications

• Any customer seeking benefits from tight front-office/back-office integration with Oracle


• Enterprises with mobile-user requirements and not willing to wait until Oracle proves it can supportmobile users

• Partner sales organizations with moderate-to-deep functional requirements

• Customers who invested in non-Oracle database technology and non-Oracle ERP solutions and whodo not plan on switching


Pivotal is more proven in direct-sales environments than PRM deployments. Pivotal's acquisition ofMarketFirst will provide good lead management capabilities that can be used for either direct or partnersales channel organizations. Pivotal does not show up on the Gartner sell-side commerce MagicQuadrant but does provide fairly robust sales configuration functionality that can be deployed in an e-commerce environment.

Who should consider the Pivotal CRM sales suite?

• Any midmarket enterprise


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• Divisions or departments of large enterprises with light-to-moderate opportunity management, leadmanagement or sales configuration requirements

• Midmarket or autonomous departments of large enterprises that are purchasing a CRM suite


• Any enterprise that requires a sell-side e-commerce platform as part of its sales suite

• Any enterprise that requires deep PRM functionality as part of its sales suite

• Large enterprises deploying a global installation integrating multiple divisions

Onyx has a good Internet architecture that leverages Web services for online sales users but the newmobile version lacks some of the functionality offered with its current 32-bit mobile version. New userspurchasing Onyx should deploy the Web-based disconnected version. Onyx's Partner Portal v.3.0 haslight-to-moderate functionality but has been deployed successfully in a few accounts. Early adopters ofthe Partner Portal v.2.0 product had difficulty during implementation. Onyx does provide a good salescontent management solution for proposal generation and presentations but lacks sell-side commercecapabilities. Onyx has shown success for financial services and healthcare institutions.

Who should consider the Onyx CRM sales suite?

• Any financial services or healthcare enterprise

• Any midmarket enterprise

• Divisions or departments of large enterprises with light-to-moderate opportunity managementrequirements that span across channels

• Midmarket or autonomous divisions of large enterprises that are purchasing a CRM suite


• Any enterprise that requires a sell-side e-commerce platform as part of its sales suite

• Any enterprise that requires deep PRM functionality as part of its sales suite

• Any enterprise that requires sales configuration or incentive compensation as part of its sales suite

• Non-financial-service and nonhealthcare large enterprises deploying a global installation integratingmultiple divisions

• Those for which mobile deployment is a key requirement

Ultimately, the CRM sales Magic Quadrant is a tool that should be used in conjunction with consultationwith Gartner during the vendor selection process. Enterprises should continue to invest in CRM salessuites but avoid buying the entire suite upfront to avoid "shelfware." Successful suite deployments will betargeted at specific problems (such as pricing, quoting, proposal generation or incentive compensation).During the vendor evaluation process, enterprises should also consider BOB vendors in case the suitevendors cannot deliver on the must-have functionality in the time required to support the sellingorganization's business objectives. PeopleSoft, Onyx, Oracle, Pivotal, SAP and Siebel qualify for the CRMsales suite Magic Quadrant. Siebel still leads; however, PeopleSoft and SAP have made progress in thepast 12 months.


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10.5 Sales Solutions for European Sales Organizations

European vendors of sales solutions include:

• Access Commerce

• Camos

• Epicor Software

• ACCPAC eWare

• FrontRange Solutions

• Industrial and Financial Systems (IFS)

• Intentia International

• J.D. Edwards

• Microsoft

• Oracle

• Onyx Software

• PeopleSoft

• Pivotal

• SAP

• Salesforce.com


• The Sage Group (Best Software/SalesLogix)

• Selligent/CPL Technologies

• Siebel Systems

• Software Innovation

• SSA (Baan)

• SuperOffice ASA

• TJ Group

• Update.com

10.6 Sales Configuration Systems


Gartner's sales configuration MarketScope replaces the Sales Configuration Magic Quadrant. In thismarket, ERP vendors will make it difficult for best-of-breed vendors to maintain market share.


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Sales configuration functionality has become commoditized, and many enterprises are on their thirdgeneration of sales configuration system (SCS) deployments. Because of the market's maturity, Gartnerdecided to retire the Sales Configuration Magic Quadrant and introduce a new Sales Configuration"MarketScope." The MarketScope provides specific guidance for enterprises that are deploying or havedeployed sales configuration solutions and for potential new users seeking to purchase a salesconfiguration solution.

Market or market segment description: SCSs are used to configure ship-to-order (STO), assemble-to-order (ATO) and engineer-to-order (ETO) products and to configure nonproduct information (such aspricing, discounts and customized financing plans). Sales configurators reduce complexity and improveproductivity by helping salespeople match customer needs to unique products and service offerings.

Product-based sales configuration: STO products have little variability other than a predetermined set ofattributes (such as color and size). Some office equipment, household appliances and televisions fall intothis classification. The role of a configurator is to match customer needs with product attributes that bestserve those needs. In many cases, using a simple parametric search engine or relational-databasetechnology solves this problem.

ATO products are configurable offerings made up of standard components. They are configured based oncustomer needs and intercomponent attribute relationships (such as compatibility). Computers andtelecommunication equipment fall into this classification. ATO configurators model products in terms ofattributes whose values may be data-driven or formulaic. Formulas can represent simple-weightcalculations or product resource use (for example, equipment power consumption). ATO configurationengines dynamically create bills of material for order fulfillment.

ETO products are configurable offerings that consist of standard and custom-engineered components.They have the same features as ATO products, but they involve some level of engineering analysis to beconfigured. Commercial aircraft, power generation equipment and heat exchangers fit into thisclassification. ETO configurators can model engineering processes, create complex bills of material,generate engineering drawings and computer-aided design information, and resolve unpredictable spatialconstraints.

Non-product-based sales configuration: Pricing configuration enables selling channels to deploycustomized trade promotions and implement complex pricing and discounting strategies. It can providecompetitive advantage through quick deployment of up-to-date pricing policies based on product, salesterritory and customer information. Finance configuration enables selling channels to calculate financialjustifications (for example, return on investment or life cycle costs), provide lease vs. buy analysis andgenerate customized financing plans.

Rating for overall market or market segment: Gartner's outlook for investing in sales configurationtechnology is "promising" because large vendors (such as Oracle, PeopleSoft and Siebel Systems),combine strong functionality with good vendor stability. Market rating: Promising

10.6.1 Evaluation Criteria

The sales configuration ratings were based on the following four criteria:

• Financial viability and market commitment — ability of the vendor to generate sustainable revenueand profits and demonstrated commitment to be successful in the sales configuration marketplace

• Targeted delivery — ability to implement and partner with external service providers to deliver salesconfiguration solutions


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• Functionality and vision — breadth, depth and vision for sales configuration functionality to supportmultiple industries

• Application agility — openness and flexibility of the application platform to execute in multiple sellingenvironments (for example, Web and field sales) and integrate with external applications (such asERP and CRM suites) (see Figure 2).

StrongNegative Caution Promising Positive

StrongPositive

Access Commerce

Baan

BigMachines

Blue Martini

Chrome Systems

Cincom

Click Commerce

Comergent

Firepond

i2 Technologies

J.D. Edwards

Oracle

PeopleSoft

Pivotal

Resolution EBS

SAP

Selectica

Siebel Systems

Tacton Systems

Source: Gartner Research (as of May 2003)

Figure 2. Sales Configuration MarketScope

Access Commerce: Like most small vendors in this market segment, Access provides compellingfunctionality but, because of its size, is a viability risk compared with larger suite vendors. In 2002, 30percent of its license revenue came from North America, compared with 16 percent in 2001. Enterpriseshave cited its multilingual capabilities and ability to support complex ATO environments as aspects thatthe product does well. Some users cite Web-based maintenance of sales configuration rules as afunctionality gap. In its September 2002 release, Access improved its ability to handle object pooling,which allows common rules and data to be stored in memory once and be shared by multiple users.Rating: Caution

Baan: Baan is a part of Invensys plc, which on 3 June 2003, announced that it agreed to sell the companyto an investment group consisting of Cerberus Capital Management, L.P. and General Atlantic Partners,LLC. During the next several months, the group — which also owns SSA Global Technologies — intendsto combine Baan with SSA GT. Baan has a compelling functionality vision for its sales configurationproduct, especially for enterprise integration. However, recent statements by Invensys about selling offthe Baan unit raise caution. Baan's Enterprise version of its sales configurator provides consistent accessand deep integration of configuration models across all enterprise functions. Enterprises that implemented


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the older Baan Configurator may have to rewrite some of their configuration rules to take advantage ofimproved features. Baan focuses on specific vertical industries — aerospace and defense, automotive,electronic manufacturing services and peripherals, and industrial machinery. Rating: Caution

BigMachines: BigMachines is rated "caution" because it is a small vendor with a small customer base(that is, 10 customers) and little market awareness. BigMachines provides compelling packagedfunctionality for industrial product manufacturers (for example, pumps and compressors) and enablingtechnology to support ETO manufacturing processes. BigMachines claims to provide industry templates(that is, data model) for pumps, valves, machine tools, oil and gas field machinery, power transmissionand material handling. Rating: Caution

Blue Martini Software: Blue Martini offers compelling sales configuration functionality for product andpricing configuration. Blue Martini has become a viable player for manufacturers with PRM suite needs. Itsarchitecture supports a many-to-many partner relationship model in which resellers, distributors andmanufacturers require a high degree of collaboration. To maintain its "promising" rating, Blue Martini mustshow more production PRM suite deployments, where sales configuration is a component of theimplementation. Rating: Promising

Chrome Systems: Chrome has shown excellent vision for pre- and post-sales vehicle configuration forautomotive dealership deployments. Its narrow focus and limited presence rate it as a "caution." Onlycustomers deploying sales configuration to automotive dealerships should consider Chrome. Rating:Caution

Cincom: Cincom provides a good solution for ETO enterprises and has a good maintenance environmentfor all product configuration environments. Enterprises have found that Cincom provides goodfunctionality and support. It must improve its market awareness for its sales configuration product. Rating:Caution

Click Commerce: The lack of market momentum for the product and Click Commerce's decline in revenuein the past few years are the primary reasons for the "caution" rating. The sales configurator's 4.3 releaseincluded integration with the Relationship Manager to exploit security, personalization and globalizationfeatures. The 5.0 release included integration with the Partner Portal catalog and order managementfeatures, allowing for the ordering and assembly of complex products. It also included improvements tothe end-user interface, including a new wizard for product add-ons. Rating: Caution

Comergent Technologies: Comergent has appeared on more shortlists in the past 12 months, primarilyduring evaluations where enterprises are looking for order management and PRM suites with salesconfiguration functionality. Comergent customers like the simplicity of the maintenance environment foradministering product configuration rules and ERP integration capabilities. Enterprises implementing anorder management or PRM suite of applications should consider Comergent's sales configurator.Although Comergent lacks a true constraint-based configuration engine, which could be problem for someusers, enterprises have found that Comergent provides a reliable architecture for managing productinformation, a good customer support organization and a scalable architecture. Rating: Promising

It is important to note that sales configuration constraint engines enable users to select an invalid choiceand have the model automatically deselect choices that were previously selected, to keep the model in aconsistent valid state.

Firepond: Firepond's revenue decline during the past few years remains a concern and is the primaryreason for its "caution" rating. Firepond provides proven sales configuration and interactive selling


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solutions for discrete manufacturing organizations. Enterprises have reacted favorably to Firepond'sworkbench for maintaining product and pricing configuration rules and models. Rating: Caution

i2 Technologies: i2 is rated "caution" because of an uncertain financial situation and moderate traction ofits sales configuration product in the market. Although i2's back-end maintenance environment formodeling pricing and product configuration rules is good, some enterprises believe that i2 consultants lacksales configuration deployment experience. i2 represents one of the more-compelling solutions forintegrating demand and SCM functionality with sales configuration. Rating: Caution

J.D. Edwards: J.D. Edwards continues to lack a true constraint-based configuration engine, which is theprimary reason for the "caution" rating. Its new advanced configurator is best suited for current or futurecustomers of J.D. Edwards' ERP system OneWorld that do not require a full constraint-based evaluationengine. Users state that J.D. Edwards' advanced pricing tool has met their needs and was a bigimprovement over its traditional pricer. Rating: Caution

Oracle: Oracle has continued to increase the number of reference customers worldwide, offers deepintegration with other Oracle applications (such as manufacturing), has demonstrated an easy-to-use rulemaintenance environment and has very strong business viability. Oracle has shown the ability to solvesimple as well as complex configuration problems. It has a large global support team worldwide. Oracledoes not have any live references in a mobile environment on the 11i version of its sales configurator.Oracle's Advanced Pricing provides a flexible rule engine. It is based on PL/SQL, leading to some userperformance issues. Oracle will replace the current PL/SQL engine with a Java-based engine by mid-2004 (0.7 probability). The pricing maintenance environment is cumbersome for pricing managers andcannot be deployed on a mobile laptop. Rating: Positive

PeopleSoft: PeopleSoft has successfully integrated Calico Commerce's configurator for its connectedversion of PeopleSoft 8.8, but users must run the configurator as a separate application if they desire amobile platform. The latest version of the configurator offers pricing and product configuration, withcompelling maintenance environments. PeopleSoft is rated "promising" because it has been successful ininvesting in and converting Calico's vision into released software. PeopleSoft must generatereferenceable accounts, standardize on the Calico technology across its manufacturing suite, and moretightly integrate the mobile sales product with the sales configurator. Rating: Promising

Pivotal: With its latest release, Pivotal has integrated its sales configurator with its direct-sales application.The integration is functionally complete, but Gartner rates Pivotal a "caution" until it is proven in moreproduction environments. Its product configurator will support large-market opportunities and provides apure thin-client administration environment for configuration rules. Enterprises believe that Pivotalprovides good functionality at less cost than BOB competitors. Enterprises state that Pivotal's errorreporting and integration with legacy systems could be improved. Pivotal claims that it has addressedthese two issues with the release of Pivotal 5 and its new Pivotal Assisted Selling product. Rating:Caution

Resolution EBS: Resolution EBS provides nested-configuration capabilities, pricing configuration andstrong back-end maintenance tools for managing configuration rules. Enterprises report that itsmaintenance environment simplifies configuration model complexity. Some enterprises cited as achallenge a limited math function set to solve ETO configuration problems. However, its limiteddistribution and market awareness rate it a "caution." Rating: Caution

SAP: SAP is rated "promising" because it has an extensive base of manufacturing customers that valuedeep integration of product information with deployed R/3 installations. SAP CRM 3.1 offers enhanced


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administration functionality for maintaining configuration models and rules. However, it must improve thepricing rule maintenance environment. Enterprises have found that SAP provides tight integration with R/3master data and order execution capabilities. If SAP's sales configurator does not support current SAPuser requirements, enterprises should look at BOB vendors. SAP's key challenge is to integrate its newproduct modeling environment with its traditional R/3 sales and distribution, and with product life cyclemanagement. Rating: Promising

Selectica: Selectica's "positive" rating is based on its proven experience with handling complexconfiguration problems, expanded pricing configuration functionality, a good end-user interface formaintaining sales configuration rules and strong scalability. Enterprises report that Selectica can improvethe ability for rule modelers to share configuration models during the model-building process and enableeasier integration of the end-user deployment interface with the configuration knowledge base. SomeSelectica references were quite satisfied, whereas others believed that they had received just adequatesupport. Selectica's biggest challenge will be how to spend its large cash reserve (that is, $110 million). Itmust expand its CRM application breadth to ensure longer-term viability. Rating: Positive

Siebel Systems: Siebel rates "positive" because: it has deployed to a large number of enterprises withsimple or moderate requirements, it features good vertical-industry expertise (such astelecommunication), it provides strong multichannel support (for example, mobile, call center and Web)and it enables integration with its CRM suite platform. Siebel has been used in some complex, high-technology environments; however, some enterprises report that the rule maintenance environment andrule testing tools could be improved. Enterprises claim that Siebel's sales configurator could solve nested-configuration problems, but it was somewhat difficult to model. Rating: Positive

Tacton Systems: Tacton has a simple-to-use environment for modeling product configuration rules.However, it has limited distribution and implementation in North America, and the company size causesGartner to rate it as a "caution" for this market. Tacton has appeal for European midmarket enterprisesthat are seeking a cost-effective solution. Rating: Caution

10.6.2 Pricing Applications

Vendors providing pricing applications include:

• Manugistics Group

• Metreo

• ProfitLogic

• Rapt

• Revenue Technologies

• Vendavo

• Model N

• Zilliant

• Most sales configuration vendors


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10.7 Sales Incentive Compensation Management

Key Issue: How will the sales organization exceed revenue and profitability targets throughleveraging technology in its operations?

Sales incentive compensation management (ICM) systems provide a cost-effective alternative to internalsystems for commission reporting and payments. Sales ICM systems have matured during the past 12months to become the system of choice for commission tracking and reporting. These applications enableorganizations to improve the timeliness and accuracy of their commission payments to transactionallycompensated associates.

ICM vendors in this market include:

• Computer Sciences Corp. (CSC)

• Callidus Software

• Centive (formerly knows as Incentive Systems)

• Motiva

• Oracle

• PeopleSoft

• SAP

• Siebel Systems

• Synygy

• Westport Software

• Practique Associates

Sales methodology vendors include:

• The Complex Sale

• Huthwaite International

• Holden International

• Knowledge Advantage

• Miller Heiman

• Sales Performance International

• Siebel Multichannel Services

• ValueVision Associates

Gartner's sales ICM Magic Quadrant is a vendor evaluation framework for enterprises seeking to replacehomegrown or spreadsheet-based commission tracking and reporting systems for transactionallyrewarded sales professionals. The Magic Quadrant measures each vendor based on the evaluationcriteria defined in "Sales ICM System Magic Quadrant Criteria for 2003,” M-18-7717. The criteria positionvendors based on functional capabilities, production client base, financial viability, technical architecture


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and strategic vision for product enhancement. The sales ICM Magic Quadrant positions functionallysuperior, BOB vendors against the financial strength and integration benefits of improved enterprisevendor applications. For the specific vendor positions in Gartner's Magic Quadrant for this marketsegment, see "Sales ICM Magic Quadrant 1H03," M-19-3051.

Table 12. Gartner's Sales ICM Magic Quadrant Vendor Positions: First Half 2003


Callidus Software andCentive

Synygy Oracle, Siebel Systems,SAP, Motiva andPeopleSoft


10.7.1 ICM Market Dynamics

The ICM market was one of few technology sectors to grow in 2002. Established BOB vendorsexperienced revenue growth and introduced upgraded applications. In 2002, BOB vendors were thesystem of choice for enterprises focused on solving the complexities of sales ICM. Vertical markets (suchas insurance, banking and telecommunication) were targeted because of their high degrees of plancomplexity and transaction volumes, combined with large and diverse sales organizations. Enterpriseapplication vendors Siebel Systems, PeopleSoft and SAP all released significantly upgraded applicationsin 2002 as part of their CRM suites. Enterprise vendors now are better able to compete for theirestablished customers on the basis of integration and functionality, but they are rarely selected unlessbundled as part of a CRM suite decision. When compensation plans are complex and transactionalvolumes are high, ICM BOB vendors are the dominant choice.

10.7.2 Best-of-Breed ICM Vendors

BOB vendors focus exclusively on solving ICM complexities through the design and implementation ofICM software. They are usually small in size, with ICM software license revenue of less than $25 million.Except for Synygy, which is supported by its strong outsourced compensation business, BOB vendorshave yet to achieve profitability, creating potential viability concerns. It is important to note that 2003represents an inflection point for BOB ICM vendors. They must demonstrate the ability to becomeprofitable, while continuing the application development that is necessary to maintain their functionalsuperiority vs. enterprise application vendors. Venture capital funding sources, now fully invested, areanxious for results. Profitability must achieved.

BOB vendors offer superior application functionality (such as prior period adjustments and plan creation).They have excellent integration capabilities, with an absolute focus on solving ICM's challenges. Theyalso maintain high levels of domain expertise in compensation design, management and execution,compared with enterprise suite vendors. Therefore, enterprises should consider BOB vendors whenaccurate and timely reporting and payment of incentive compensation is the main priority.

Callidus Software is an ICM leader and consistently appears on competitive shortlists because of itsfunctionality, flexibility and ease of use. Callidus has an installed client base of more than 60 productioncustomers across multiple verticals, with strength in telecom, insurance, high technology and banking. Italso has a growing global presence. The TrueComp 3.0 product suite, released in September 2002,features three new modules and ease-of-use enhancements (such as support for multidimensional ratetables). The replacement of the Blaze rules engine with a proprietary engine improves performance andscalability attributes. In December 2002, Callidus secured $8 million in venture funding, bringing its total


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venture funding to $84.5 million. Profitability should be achieved mid-2003, assuming a return of businessinvestment in technology. The Callidus 4.0 product, planned for release in the third quarter of 2003, isexpected to show continued refinement of the user interface, business analytics, and the expansion ofquota and territory management capabilities.

Centive, formerly know as Incentive Systems, is an ICM leader. In July 2002, Centive launched acompletely redesigned, Internet-native J2EE application, Centive/EIM 4.0. Several large insurancecompanies, with transaction volumes exceeding 4 million per month, selected Centive, removing priorscalability or performance concerns. Functionally rich, Centive/EIM 4.0 can handle complex commissionchallenges (such as security for multitiered, overlaid crediting hierarchies) and advance collaborationworkflow for approvals and dispute resolution. However, like all next-generation applications, Centive/EIM4.0 faced challenges. Centive tools were unavailable at launch, the rules library was incomplete and onlythe Oracle database was supported. Centive/EIM 4.1, released in January 2003, begins to address thesegaps, including support for the SQL server. Centive clients will need to evaluate upgrading prior toapplication maturity. Centive acquired Ockham Technologies' advanced quota management functionality,which will be fully integrated by the third quarter of 2003. The company, with $76 million in total venturefunding, will likely achieve profitability in 2003.

Motiva was the first vendor to release a pure, J2EE platform for ICM in the first quarter of 2002. With the8.3 version, Motiva has closed functionality gaps and improved usability, while increasing performance.Motiva's enterprise information management (EIM) portal increases real-time data access and visibility.Motiva gained momentum in late 2002 with several new client wins and an increased presence ondecision lists. The 8.2 application has solid functionality for commission management, although it lacks fullmodeling capabilities or quota management functionality. In November 2002, Motiva secured anadditional $6.5 million in its fourth round of funding, which addressed viability concerns. Although a nicheplayer, Motiva's 8.3 application and improved distribution positions it ahead of enterprise applicationproviders; however, it trails other established BOB vendors.

Synygy is the dominant provider of outsourced ICM and has moved into the visionaries' quadrant. It is theonly profitable ICM vendor based on its commission management services. With the release of theSynygy EIM version 10.0 application suite, built on a J2EE platform, Synygy now can compete as asoftware provider. Leveraging its 12 years of experience in commission management, the version 10.0application shows an improved user interface and manages workflow through its factory metaphor.Synygy offers sophisticated functionality for complex commissions requirements and scalability for hightransaction volumes. However, it lacks an established base of referenceable production software clients. Itis gaining experience with enterprise software development and the associated deployment challenges,and Synygy will likely continue to improve the application through 2003. With the release of a product linefor sales performance management, Synygy is on the next wave of advanced functionality for sales,including integrated quota management and territory alignment capabilities. It is financially stable and hasa solid Web-based application.

10.7.3 Enterprise Suite Vendors

Enterprise suite vendors offer ICM functionality as a module within their CRM sales product suites. Thesevendors have tremendous resources and expertise in software development; however, they lackcommission management domain expertise. They offer tight integration to their application backbones,leveraging territory management functionality and advanced integration into the opportunity managementor configuration modules of their application suites. The ICM module often is bundled with their CRMsales offerings. They provide "good enough" ICM functionality. However, they can not compete, feature


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for feature, with BOB vendors regarding depth and breath of functionality. They also do not have thereferenceable installed base or experience in the ICM marketplace.

Consider enterprise suite vendors when the enterprise already uses a vendor's enterprise applications orhas acquired the ICM module as part of a larger CRM decision, and the functionality provided is goodenough to meet end-user requirements.

Siebel Systems, the leader for CRM suite functionality, made a significant investment in its ICM module.In September 2002, it improved its application with the release of version 7.5. Increased capabilities inplan management (such as a plan acknowledgement and improvements in managing adjustments)increase its appeal within the Siebel client base. Siebel capitalizes on integration with its leading direct-sales application, leveraging strengths in territory and quota management. Compensation estimation is abenefit when integrated with the Siebel opportunity management system. However, the application isweak in modeling, and ad hoc reporting is a "dump" to Excel. Siebel has 20 production accounts;however, none are on version 7.5. In 2003, Siebel's milestones include deployment of its ICM module intoits sales force and another large high-technology client, which will test performance and scalability. Siebelclients that have moderate degrees of complexity should consider this module before evaluating BOBalternatives.

PeopleSoft entered the ICM market with the release of the first version of its Sales Incentive Management(SIM) module in December 2002, as part of the PeopleSoft 8.8 release. For a first-generation application,SIM is complete, addressing base requirements for all components of functionality. It lacks depth in more-complex functional areas (such as adjustments). It is an unproven application, with no productionreferences, as expected for a new application. PeopleSoft is targeting its high-technology andmanufacturing clients to build momentum. A mid-2003 release is expected to include templates forbanking and brokerage services, with additional templates in development. Current PeopleSoft clientsshould evaluate SIM. After continued development and several production clients, SIM will be ready forbroader acceptance.

SAP has enhanced its ICM application with the 3.1 release of the mySAP CRM suite. Initially designed tosupport financial clients, SAP is beginning to broaden functional components (such as improving the end-user interface to appeal to its large and established client base). SAP offers basic ICM functionality;however, it lacks the depth and breadth necessary to handle complex commission calculations.Adjustments functionality and workflow are immature. SAP has nine clients in production, eight of whichare in Europe; none are with the new application. In 2003, SAP clients should evaluate their ICMrequirements against SAP functional capabilities before engaging with BOB vendors.

Oracle has offered an ICM module since 1998. Its 11.5.8 release offers complete ICM functionality,supporting the more than 30 Oracle clients in production. Although the 11.5.8 release was not dramatic inscope, Oracle is enhancing its end-user interface and workflow. Integrated as part of the sales onlineapplication, Oracle's commission estimation, quota management and territory alignment functionality aresolid. Oracle offers a unique compensation plan and quota acceptance capability to facilitateadministration. When bundled as part of a larger Oracle application decision, compensation teams shouldinvestigate Oracle's ability to handle their most-complex requirements. When selecting an ICMapplication, Oracle users should compare Oracle's capabilities and integration benefits in lieu of a BOBalternative.


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10.7.4 Vendors Not on the Magic Quadrant

Compute Sciences Corp. (CSC) has been removed from the ICM Magic Quadrant because its applicationis designed exclusively for the insurance market, restricting its ability to compete in the broader market.CSC's mainframe-based Performance Plus builds on its Distributed Support Services product client base.For similar reasons, Trilogy also has been removed from the Magic Quadrant; it has moved to a pureindustry application focus. Once a leader for ICM, it did not secure any new clients in 2002. It isexperiencing an erosion of its client base.

Westport Software falls just short of inclusion because of the revenue criteria. However, it offers a low-cost, highly functional alternative to traditional BOB vendors. U.K.-based Practique Associates is anemerging BOB vendor for Europe, the Middle East and Asia that also falls short on the revenue criteria.

Finally, Salesnet is likely to emerge during the next 12 months as a viable ICM option in the BOBcategory.

Ultimately, the sales ICM market is positioned for rapid growth through 2005. Significant investments byenterprise application vendors have improved their functionality, while BOB vendors re-architected theirapplications to address the performance and scalability demands of large users. BOB vendors arefunctionally superior and the application of choice for those enterprises seeking to address incentivecompensation management challenges. However, profitability is elusive for BOB vendors, increasingviability concerns for potential users. Modules offered by enterprise application providers are likely toimprove, increasing levels of functionality and tightening integration.

10.8 The Direct Sales Technology Magic Quadrant: First Half 2003


The direct business-to-business sales organization is the traditional sales channel comprising internalsales resources focused on the selling of products or services directly into the client and prospect base asemployees of the provider company. Direct sales resources may be field-based, calling on customersface-to-face at their locations, or inside sales, selling from a desk-based environment via the phone. Salestechnologies, developed to automate and emulate sales processes and methodologies that reflect thesales strategy, play a key role in increasing sales productivity. Customers will find technology-poweredsales organizations better coordinated, better informed, better prepared and more capable of doingbusiness. Vendors in this market include:

• Amdocs

• Best Software – SalesLogix

• E.piphany

• Firepond

• Invensys-Baan (now owned by Cerberus Capital Management and General Atlantic Partners)

• J.D. Edwards

• Oracle

• PeopleSoft

• Salesforce.com


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• Salesnet

• SAP


• Siebel Systems

• UpShot

Gartner's direct sales technology (DST) Magic Quadrant has evolved from the opportunity managementMagic Quadrant to address increased end-user demands for functionality to improve productivity for fieldand inside sales.

In 2003, direct sales organizations are under growing demands to increase business visibility and improvesales productivity. The direct business-to-business sales organization is the traditional sales channelcomprising internal sales resources focused on the selling of products or services directly into the clientand prospect base as employees of the provider company. Direct sales resources may be field-based,calling on customers face-to-face at their locations, or inside sales, selling from a desk-based environmentvia the phone.

Sales technologies, developed to automate and emulate sales processes and methodologies that reflectthe sales strategy, play a key role in increasing sales productivity. Enterprises will find technology-powered sales organizations better coordinated, better informed, better prepared and more capable ofdoing business. Organizational leverage of sales technologies will be a competitive advantage in 2003and a strategic requirement by 2005 for all direct sales organizations (0.8 probability).

10.9 The Evolution of the DST Magic Quadrant

The DST Magic Quadrant has evolved from the opportunity management system (OMS) Magic Quadrantpublished in August 2002. The DST Magic Quadrant builds on the OMS research base, extending thecriteria to include functionality for sales execution and sales operations. The expanded criteria are definedin "Criteria for the Direct Sales Technology Magic Quadrant." These criteria are based on a salestechnology framework that identifies the attributes and value of each component. Vendor positions mayhave shifted on the basis of functional completeness and depth, full mobile functionally and applicationflexibility. For the specific locations of vendors in Gartner's Magic Quadrant for this industry segment, see"The 1H03 Direct Sales Technology Magic Quadrant," M-19-2408.

Table 13. Gartner's Direct Sales Technology Magic Quadrant Placements: First Half 2003


Siebel Systems SAP PeopleSoft andE.piphany

Pivotal, Oracle, J.D.Edwards,Salesforce.com, OnyxSoftware, SalesLogix,Baan and Amdocs


The DST Magic Quadrant positions vendors at a given point in time based on the criteria and the relativeweighting Gartner assigns to the criteria. Each user organization should evaluate vendors on the basis ofthe criteria; however, they should alter the weighting of each criterion based on their unique requirementsand environments.


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The key criteria for individual weighting are:

• Integration — Is the enterprise committed to a strategic software provider for CRM, ERP, humanresources or financials? The costs of integration may outweigh functional superiority.

• Selling environment — In what types of sales environments does the enterprise's sales team function:connected, mobile or wireless? What is its size, which sales tiers (that is, strategic, major, geographicor inside) does it have, and what are its vertical-specific requirements?

• Sales process or methodology alignment — How closely does a vendor, "out of the box," match theenterprise's current or desired sales processes and methodologies?

• Flexibility — How closely can the application be configured, without custom code creation, to theenterprise's processes? The trade-off between custom application development costs and thechallenge of changing the sales culture to optimize technology is different for every sales organization.

10.10 Direct Sales Technology Market

The DST market has formed into distinct segments. Siebel remains alone in a leadership position basedon its breadth of functionality, vertical-industry support and references. However, the enterprise businessapplication providers — SAP, Oracle, PeopleSoft and J.D. Edwards — have enhanced their functionalitysufficiently, closing the "good enough" gap, that the weighting of integration over functionality becomes afactor for their clients. CRM suite specialists offer superior functionality, flexibility and power for directsales organizations. Enterprises must factor each criterion wisely, because no perfect fit exists in the DSTmarket.

10.10.1 Leaders

Siebel Systems maintains its leadership status. The Siebel application remains the functional benchmarkfor opportunity management, with leading forecast and pipeline management capabilities combined withprocess enablement. The integration of the Siebel MCS sales methodology or the best practices releasedwith Siebel v.7.5 present enterprises with flexible business process options. Core functionality for salesexecution is solid, with Siebel's configurator positioned as a leader. Siebel's territory management system(TMS) is robust, and the improved incentive compensation (IC) system gives Siebel functionalcompleteness and depth. However, Siebel's rich feature strength can be viewed as overkill by lesscomplex users, as enterprise vendors close the functionality gap. Siebel is currently addressing thisconcern by repackaging its software to support smaller sales initiatives. Siebel users have been slow toembrace the Siebel 7 platform, a function of the current economy and the associated costs. Siebel willremain a leader into the future; however, its leadership position will be challenged.

10.10.2 Visionaries

E.piphany provides DST functionality as part of its CRM suite. The E.piphany E6.0 sales application offersdeep functionally for OMS but provides moderate capabilities for sales execution. The OMS includesvirtual sales coaching to guide salespeople through the sales process, a first step toward real-time salestraining. The lead management capabilities reflect E.piphany's strength in marketing and capitalize on astrong TMS capable of handling complex multilevel-tiered hierarchies. E.piphany currently lacksfunctionality for IC, with light quota management. E.piphany is positioned for organizations seeking afunctionally rich and flexible application from a CRM specialist.

PeopleSoft continues to upgrade functionality, capitalizing on its technical architecture. The v.8.8 productoffers complete functionality for OMS and sales execution. The TMS offers unique territory modeling and


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analysis capabilities. The newly announced PeopleSoft IC application is functionally complete, yet it trailsBOB vendors. With v.8.8, PeopleSoft expands its vertical offerings to six. PeopleSoft's mobile solution isnot yet fully complete, lacking account management and proposal generation functionality. PeopleSoftclients should evaluate its DST application closely for its functional breadth and integration benefits.Continued functional development and penetration of its client base will put PeopleSoft on the forefront ofDST through 2005.

10.10.3 Challengers

SAP, leveraging its enterprise architecture, assumes a challenger position. With a massive client base ofopportunity, SAP is positioned to capture market share. The SAP CRM 3.1 release continues theenhancement of functionality. Full OMS capabilities are tied to an SAP sales methodology. Salesexecution functionality for leads, content and configuration are complete, although they trail BOBapplications for depth of functionality. The newly released IC application meets basic compensation andquota requirements, and the TMS is fully functional. Mobility remains a challenge for SAP. Differentinterfaces remain in CRM 3.1 for connected and mobile users, forcing disconnected users to work in twoenvironments. Integration within SAP is easy; however, the application's flexibility is not strong. SAPdemonstrates its commitment to CRM with regular upgrades and improvements. Committed SAP clientswill weigh the integration benefits against the functional competency.

10.10.4 Niche Players

Pivotal offers a functional DST solution as part of its CRM suite. The out-of-the-box OMS methodology forPivotal CRM sales v.4.0 is Pivotal-based. It offers an upgrade to an integrated Miller Heiman salesmethodology module. Pivotal leverages its acquisition of Exactium for configuration and proposalgeneration. The TMS is adequate but lacks any quota or performance management capabilities.Personalization and configuration are flexible and feature multiple options. Mobile functionality fordisconnected configuration will be complete in the next release as the Exactium configurator is integrated.While remaining a niche player, Pivotal offers a rich DST solution for stand-alone direct sales or as part ofa sales suite.

Oracle has offered a DST application since 1997. The current release version, 11.5.8, has few functionalholes, yet it lacks depth in several components. The OMS is tied to a robust, yet rigid Oracle sellingmethodology. Customization will present issues for enterprises unable to adapt to this philosophy.Functionality for sales execution continues to improve, with proposal generation available with v.11.5.9.The TMS, IC and quota capabilities all provide moderate functionality. Mobility continues to be an issuefor Oracle, as does the lack of flexibility, requiring customization. Oracle clients, willing to embrace theOracle sales process and methodology, should evaluate the integration benefits against their functionalrequirements.

J.D. Edwards (JDE) is an enterprise business application provider. The CRM 2.0 application is nearlyfunctionally complete, offering JDE clients a robust, integrated DST solution. The OMS includes guidedselling and multiple methodology enablement. The sales execution components have been completedwith the inclusion of proposal generation in the 2.0 release. Mobility is addressed with the Syncralogicdata synchronization engine. It lacks any IC or quota capabilities, suggesting the need for partnerships tofill in those requirements. The application is flexible, reflecting the component nature of the YOUcentricsales force automation (SFA) acquisition in 2001. JDE clients, seeking to capitalize on integrationbenefits, should evaluate JDE functionality as compared to CRM suite providers.


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Salesforce.com is the only application service provider (ASP) vendor currently positioned in the DSTMagic Quadrant. Salesforce.com's simplistic, yet complete, approach to sales forecasting and pipelinemanagement is gaining appeal in enterprises with greater than 50 salespeople. Business modeldifferences aside, Salesforce.com offers excellent flexibility, rapid deployment and a minimal cash upfrontinvestment for its OMS. However, Salesforce.com provides limited functionality for sales execution andonly basic territory management. The mobile version follows the briefcase metaphor, meaning limitedoffline capabilities. Salesforce.com provides functionally sufficient software in an ASP business model.However, it lacks DST functional completeness.

Onyx Software provides DST functionality as part of its CRM suite. The Onyx v.4.0 product providesadequate functionality for opportunity management, highlighted by an embedded sales methodology andvirtual coaching capabilities; however, it lacks mobile forecast capabilities or sophisticated OMSfunctionality (such as multisales process support). The sales execution components are functional but notfully enabled for mobile requirements. Content management capabilities are good, but significant updatesmust be done by compact disc. The proposal generation system is not available when disconnected.Mobility is an issue, as the mobile client remains a 32-bit, client/server application. Although the TMS isgood, it lacks functionality for quota or IC. The 4.5 release will improve usability for the online version;however, it does not address the mobile limitations.

Amdocs provides DST functionality as part of its CRM suite. The Amdocs v.11.2 application still reflects itsClarify call center roots. Although its OMS and sales execution functionality meets basic requirements, itlacks depth of capability or sophisticated functionality. The fat-client, 32-bit mobile application struggles tomeet mobility requirements. IC and quota capabilities are available through partnerships, supporting theadequate TMS. The v.11.5 application will improve usability, but it falls short of providing expansivecapabilities or mobility. Amdocs clients should consider integration benefits with its call center applicationsas compared with its direct sales limitations.

Best Software/SalesLogix is a CRM suite provider. Version 6.0 offers the best of 32-bit, client/servertechnology typically associated with traditional SFA applications, combined with a Web-based onlineclient. The forms-based end-user interface has full functionality for opportunity management, includingintegration of sales methodologies (such as Miller Heiman or Solution Selling). Sales execution lacksproposal generation, depending on BOB providers Sant and Pragmatech Software for functionality.Mobility is complete, with good territory management capabilities, but it lacks IC. Positioned for midsizecompanies or divisions of large organizations, SalesLogix has many happy references that have used theproduct for years. However, SalesLogix has yet to commit to moving away from the mature client/serverarchitecture for disconnected usage, which will limit its appeal to enterprises seeking a more flexible andfunctional Internet-based architecture.

Baan is an enterprise business application provider. Sales Plus v.4.3, a traditional 32-bit client/serverapplication, and is beginning a transition to the Sales Point Web architecture. The Sales Point applicationwill not have mobile functionality until sometime in 2004. Baan's focus is on its core vertical industry ofdiscrete manufacturing. As Baan makes the transition to its new architecture, current Baan clients shouldcarefully weigh these limitations with the value of integration into the Baan infrastructure. Note: Baan is apart of Invensys plc, which on 3 June 2003, announced that it agreed to sell the company to aninvestment group consisting of Cerberus Capital Management, L.P. and General Atlantic Partners, LLC.During the next several months, the group — which also owns SSA Global Technologies — intends tocombine Baan with SSA GT.

The DST Magic Quadrant evaluates vendors based on Gartner's Magic Quadrant criteria. The DST MagicQuadrant is a point-in-time analysis and should be considered in light of prior published Magic Quadrants


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— specifically "Managing Sales Opportunities: Second-Half 2002 Magic Quadrant," R-17-8219. Eachenterprise must apply and weight the evaluation criteria regarding integration and its unique salesenvironment. The application flexibility needed to configure the technology in alignment with the sellingculture becomes an essential capability, because, in the DST market, one size does not fit all.

10.11 Consumer Goods Industry SFA Magic Quadrant: First Half 2003


Key Issue: How will technology impact the evolution of sales channel and customer relationships?

Industry trends: Consumer goods (CG) companies continue to invest in and focus their CRM effortsprimarily on SFA, with the consumable CG enterprises being ahead of durable CG enterprises inadoption. This stems from the higher velocity of the transactions in consumables, as well as the moreprofound impact that the difficult economy has had on the sale of durable goods. Within SFA, theinvestment focus continues to be on trade promotion management, with roughly 80 percent of enterprisespursuing SFA to better plan and manage promotions with the retail trade.

Notwithstanding this continuing trend, there has also been increased emphasis on automating categorymanagement functionality. This is consistent with the vision Gartner outlined for automating the key sellingprocesses of the CG industry (see "Consumer Goods Field Sales: Focus on Five Key Processes," TU-17-6217 and "Consumer Goods Field Sales: Linking Five Key Processes," SPA-17-5663). CG enterprisesare more frequently enabling the analytical category management processes as a precursor to customerplanning so that the insights generated during the analysis can be incorporated in the planning cycle.

Another industry trend is a level of dissatisfaction with reporting capabilities across many of the vendors,as evidenced by vendor reference checks. This is clearly a call to the vendors to take a look at theirreporting capabilities and see how they can make them more flexible and easy to use. This dissonancewith reporting capabilities is not surprising, as it is a sign of how the SFA market is maturing. SFA systemsare highly transactional in nature; but, as users get accustomed to their SFA systems, their requirementsevolve from transactional to managerial.

Vendors of sales solutions for CG companies include:

• CAS Software AG

• Dendrite (back in the game)

• Gelco

• iMany

• Interactive Edge

• Kenosia Solutions (new addition)

• MEI Group

• Marketing Management Analytics (MMA) (No longer doing sales. Severed most of the former AIMbusiness)

• Oracle

• PeopleSoft

• Proscape Technologies


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• RW3 Technologies

• SAP

• Siebel Systems

• StayinFront

• Synectics Group

• Thinque Systems

• VISTA Information Technologies

Recent reference checks across the various vendors in the CG Field Sales Automation Magic Quadrantrevealed that 29 percent of the SFA implementations among CG companies involved external serviceproviders (ESPs), either in the strategy and process design phase or for data integration. The implicationis that many vendors do not have ESP partners when the situation requires outside help; whereas, othervendors are overly reliant on ESPs in a space where 71 percent of implementations are done in house bythe vendor.

10.11.1 The Magic Quadrant

The criteria for inclusion in the CG Field Sales Automation Magic Quadrant were published previously in"Defining the Consumer Goods Industry SFA Magic Quadrant," DF-18-6960. Because the market is highlyfragmented, with some vendors having no overlapping functionality in the field sales processes that theyenable, Gartner applies the following designators to them:

• (S) — SFA suites that include most elements of the other three functional areas (T, R and E)

• (T) — Trade promotion management, customer planning and settlement

• (R) — Retail execution and monitoring

• (E) — Category management and sales effectiveness

Table 14. Gartner's Field Sales Automation Magic Quadrant Placements for the CG Industry: FirstHalf 2003


Siebel Systems (S) andCAS (S)

Oracle (T), Kenosia (E), GelcoInformation Network (T),Interactive Edge (E), ThinqueSystems (R), Synectics Group(E and T), Vista SoftwareSolutions (T), PeopleSoft (Tand R), SAP (T) and MEIGroup (S)


10.11.2 Visionaries

CAS and Siebel continue to be visionaries as they provide the SFA suite functionality, embedded salesprocesses and other critical enablers.


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CAS has strong market share momentum in the United States and Europe, supporting warehouse anddirect store-delivered selling models. Its visionary elements include a strong interface and functionality inits product, as well as embedding strategic account management capabilities, accompanied byspecialized training and consulting that frames and guides strategic sales behavior. Another visionary andrelevant service it is offering jointly with the IBM applications group is a scan-based point of sale (POS)analysis tool that will provide more-rapid understanding of POS data and is particularly timely given thetrend of retailers no longer providing POS data to the traditional syndicated sources. POS analysiscapabilities will complement CAS's category management capability.

CAS is also responding to the need for enhanced industry reporting requirements by developing aconfigurable analytics, report and visualization utility that will allow users to create a wide variety ofreports, charts and graphs from within its SFA system environment. These will be configurable via pre-defined wizards and may be used in conjunction with an embedded reporting engine to access anyinformation managed within the application or from external sources. Users consistently commented onthe strength of the CAS technology and knowledge of the CG space, but pointed out that bench strengthand support appeared to be experiencing growing pains during early 2002. To move to the leaders'quadrant, CAS must strengthen its consulting bench and support capabilities, implement a formal clientsatisfaction measurement capability, and expand global capabilities beyond North America and Europe.

Siebel Systems continues to have the most global penetration and a broad offering that includeswarehouse and direct store-delivered product, van sales, and apparel and footwear. It has strengthenedits implementations through more general manager oversight and technical account managerinvolvement. Another positive step for Siebel has been the deployment of a CG-specific sales force, whichallows for more industry expertise and better expectation setting during the sales cycle. The eConsumerGoods product, in releases 7.0 and 7.5, continues to address key industry needs in sales volumeplanning, embedded processes from trade planning through execution and usability of the interface in thehandheld retail execution interface. Users generally responded positively about recent improvements inimplementation and support.

Some users also pointed out that they felt reporting capabilities were "oversold" and that deploymentthrough ESP partners contributed to more-lengthy deployments. Given the highly complex nature of theCG industry, Siebel is taking a positive step in certifying its ESP partners but should look to do more of itsown implementations to be more consistent with the 71 percent that are done in-house across the market.The continued deployment of Siebel Analytics will address some of the need for more-robust reporting,because preliminary user feedback on Siebel Analytics has been positive.

To move to the leaders' quadrant, Siebel must continue to focus on reporting and implementation. Thiswill become particularly important in the midmarket, where the need to scale down the implementation bydoing it in-house becomes critical. Siebel will also need to provide more v.7.0 and v.7.5 installedreferences in the trade promotion area in North America, where there continues to be considerable marketfocus but relatively few Siebel installs. Only three exist today, but the pipeline will move the number toeight by year-end 2003.

10.11.3 Niche Players

Gelco Information Network continues to be a solid customer-planning and trade promotion managementsolution in the North American midmarket, particularly for enterprises that want to reduce their total cost ofownership by going with an ASP model instead of purchasing and implementing software. It has a well-thought-out Web technology, both for individuals planning the promotions and for those clearing thedeductions. Its partnerships with Cognos and awayX give it solid reporting capabilities as well as trade


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management for food service. Gelco's initiative with DemandTec should get traction as CG companiesseek to optimize promotions and pricing. CG enterprises that are waiting for their ERP vendor to meettheir planning and promotional requirements are finding Gelco particularly attractive because of the lowcost of transition.

Interactive Edge continues to be innovative in the new item sell-in and promotional simulation, where it isunique among SFA vendors. It lost some momentum and client base briefly in the category managementmarket with its CMS Pro product, because it required significant manual intervention for data loads andformat customization. Nevertheless, Interactive Edge has addressed this issue with its new XP3 product,which features data autoloaders and a flexible interface that is oriented toward the sales user. Thetechnology is Microsoft-centric and componentized based on user roles within the organization. Userscommented that both pre- and post-implementation support was good, and that projects were managedwith strong adherence to established timelines. They also point out that the product is strong in multiple-source data analysis, and that the inclusion of demographic data is a strong addition.

A new entrant in the Magic Quadrant is Kenosia, which is part of Bristol Technologies. Kenosia's DataAlchemy product enables category management, including competitive analysis, pricing, promotions, liftanalysis and other components of fact-based selling. The product is designed to have presentations andtemplates created by sales support (such as a trade marketing organization) with data being fedautomatically from syndicated and other sources. The templates are then accessed by a Web interface byfield personnel or brokers for analysis, some customization and presentation. The Kenosia solution uses aPowerPoint add-in tool that some users like because it does not rely on additional software, while othersprefer to have the flexibility of working directly within a presentation package (such as MicrosoftPowerPoint). However, Gartner, does not advocate proprietary components. Users also said that the toolis best utilized by "power users," who are dedicated to category management and the creation of sellingpresentations, because the system is very detailed; and authorship is more complex than many salesusers can handle.

For MEI, 2002 was a pivotal year, as it got traction in the U.S. market. It has positioned itself well for themidmarket going forward, with a cost-effective solution that is typically implemented in-house. By enteringinto a joint venture with VeriSync to provide ASP trade promotion management, retail coverage, UCCnetaccess and fact-based selling, it will be able to continue to grow its client base in North America. The pastyear also brought challenges, as MEI realized that the 18- to 20-week implementation it touted in Europeis not sufficient for the U.S. market — particularly where substantial interfaces are required for tradepromotion functionality. MEI has remained neutral in the J2EE vs. Microsoft .NET debate by supportingboth platforms. Its Web solution has an appealing interface that is particularly geared toward brokers andbroker managers who favor simplicity over extensive functionality. Users cited strong project managementduring implementation but some declines in post-implementation service, due to stretched resourcesgiven the number of more complex U.S. installations under way. MEI could move to the challengers'quadrant provided it can improve reporting, begin to disclose financial information, shore up its post-implementation service capabilities, increase its U.S. trade promotion installed base and implement asolution through a major integration partner.

Oracle also began to get traction in 2002. It has a well-articulated plan for enabling the five key field salesprocesses. It delivered an "out-of-the-box" trade promotion management offering this year, but it is stilldeveloping the offering. Given time and continued focus, particularly in sales execution, Oracle will growits installed base and be a force in the market by 2005 (0.7 probability). Its solution is built on the 11itechnology and is one of the more friendly and ergonomic of the solutions from the ERP vendors. Userscited strong follow-up support, despite some rough startups associated with early efforts.


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PeopleSoft came into 2002 with the advantage of having purchased the intellectual capital of the Vistatrade promotion management solution back in 2000. Nevertheless, it was often bundled with the ERPoffering, and PeopleSoft has not been able to produce a referenceable trade promotion managementclient. PeopleSoft has been able to add analytics and mobile order entry to its lineup. What PeopleSofthas not been able to demonstrate is that enabling the five key CG selling processes is a priority or that ithas a clear plan to do so. For now, PeopleSoft is expected to have a fairly low win rate even among itsCG installed base and limited ability to sell beyond. Users commented that there was a slight dip inservice early in 2002 that was firmed up later in the year. PeopleSoft's small group of three clientreferences appears to be very satisfied.

In late 2002, SAP released its v.3.0 trade promotion solution, which is its first out-of-the-box offering forCG. The end-user interface is substantially better than previous non-vertical-specific SAP offerings but stillonly average compared to most of the market (for example, CAS, Oracle, PeopleSoft, Siebel orSynectics). The solution, however, does not have the ability to work offline without the use of a MicrosoftExcel add-in tool. This is addressed in the new 4.0 release launched in mid-2003. Enterprises that haveSAP in the back office are supportive of the direction in which SAP is moving but point out that SAP is stilltwo to three years away from meeting their SFA needs. SAP has not yet been able to provide livecustomer references on CRM v.3.0. SAP does plan to move beyond trade promotion managementfunctionality and has a prototype handheld retail auditing solution with a pleasing interface that lookspromising. SAP is not expected to move quickly in enabling the key CG selling processes, but its move todevelop out-of-the-box solutions instead of custom applications is a positive one.

Synectics Group has upgraded to a .NET platform and is poised to have an impact on the midmarket. It isone of the few vendors that are supplying their users with sufficient reporting. It does so by providing aplethora of standard, numbered reports. Any additional reporting needs that are subsequently requestedby users are considered for inclusion in the next release. Synectics has trade promotion management andbusiness analysis solutions with a friendly and ergonomic interface and provides the greatest amount offunctionality of any vendor for the sales support staff who manage and clear deductions. Userscommented on Synectics' deep understanding of the trade promotion management market and on solidpost-implementation support, including product development.

The only vendor in Gartner's Magic Quadrant that is dedicated exclusively to enabling retail execution andmonitoring (that is, activities to be carried out at the retail level and the monitoring of product availability,competitive activity and promotional execution) is Thinque Systems. Thinque has delivered innovation thisyear in conjunction with a major beverage bottler, where Thinque provided the real-time radio frequencytransmission capabilities for pre-sales agents to recommend an optimal assortment to a customer and totransmit the order instantaneously, so that the truck could be packed for the next morning. Thinque hasspread its wings to include mobile data capture for other vertical industries beyond CG. Users cited greatsupport during implementation and pilots. Others felt that project manager support and reporting could beimproved.

Vista Software Solutions worked quickly in 2002 under new senior leadership to get its trade promotionmanagement solution onto a Web format after emphasizing UCCnet-type exchange development for mostof 2001. Its upgraded solution uses an Excel add-in, which leverages Excel for formatting and datacollection, both online and untethered. Sales agents, in particular (such as brokers), like the familiarity ofthe Excel interface, but other users find that the roll-ups, reporting and query capabilities are notsatisfactory.

Consequently, enterprises should weigh the relative merits of BOB solutions and the SFA suites as theylook to enable the key CG selling processes with a highly fragmented vendor offering. The CG Magic


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Quadrant positions vendors at a given point in time based on the criteria and the relative weightingassigned to those criteria. Each enterprise should evaluate vendors by means of the criteria; however,they should alter the weighting of each criterion based on their unique requirements and environments,rather than assuming that the vendor closest to the leaders' quadrant will best meet their needs.

Ultimately, the SFA market for the CG industry is highly fragmented. Although no single vendor enablesall the key sales processes, CAS and Siebel are positioned as visionaries, within striking distance ofleadership.

10.12 Sell-Side B2C Vendors

The list of sell-side B2C vendors that are generalists includes:

• Art Technology Group (ATG)


• BroadVision

• IBM

• InterShop Communications

• Microsoft

• Oracle

• Siebel Systems

• Vignette

10.13 Sell-Side B2B Specialists

The sell-side B2B vendors that are specialists include:

• BEA Systems


• Click Commerce


• HAHT Commerce

• Ironside Technologies

• NetVendor

• OrderFusion/Quadrant Commerce

• SAP (mySAP)

• Trigo Technologies

• Webridge


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11.0 Customer Service and Support

Customer service and support (CSS) is a key strategy to reinforce an enterprise's brand promise andimprove customer loyalty. This trend will affect application selection criteria and put pressure on vendorsto develop more complete suites that are scalable to multiple channels (such as, Web, contact center,kiosk and field service).

The vendor market for CSS solutions will continue to be unstable through 2004, even in the event of asharp economic recovery. The rate of technology innovation will continue at a slower pace than the period1999 to 2001, as venture capitalists and other investors favor higher growth areas (for example,biotechnology). Enterprises should view CSS as an unstable market dominated by niche players andvisionary vendors, as well as "me too" players that are unable to demonstrate leadership across allaspects of customer service and across channels (such as, wireless, mobile or disconnected, contactcenter and the Web). Instead, most of the relevant vendors excel at a particular vertical or core CSSdiscipline. The CSS vendors that are in Gartner's three areas of coverage — field service automation,Web self-service (that is, e-service) and phone-based customer service — will remain under strong pricepressure through 2004. By 2005, 80 percent of vendors in the CSS market will fail or cease asindependent businesses (0.7 probability).

For the North American market, Gartner tracks eight major vendor categories.

11.1 Customer Service and Support Suites

Vendors that provide customer service and support suites include:

• ACCPAC/eWare

• AIT Group

• Altitude Software

• Amdocs ClarifyCRM

• Chordiant Software

• Cintech Solutions

• E.piphany

• Graham Technologies

• Kana

• Onyx Software

• Oracle

• Pegasystems

• PeopleSoft

• Pivotal

• REGWARE

• SAP


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• Siebel Systems

• Talisma

• WebTone Technologies

11.2 Field Service Management

Strategic Planning Assumption: Through 2006, no packaged field service application will address the end-to-end service management needs across multiple industries (0.7 probability).

Dozens of vendors provide varying parts of a field service solution, and Gartner's Magic Quadrant looksspecifically at the ability of the processes to dispatch and support field service agents. Comparingsoftware packages for field service management poses unique difficulties. The complexity of schedulingand dispatching field technicians varies greatly from industry to industry.

Examples of requirements (that is, often industry-specific) include:

• Wireless device (for example, pocket PC, personal digital assistant and smartphone) support

• Mapping and workforce scheduling

• Access to inventory and parts information

• Inventory planning

• Entitlements lookup, contract management

• View of shipping and procurement procedures

• Ability to create a purchase order, bill of materials or invoice

With the recent emergence of entry-level field service functionality in enterprise application packages fromvendors such as Oracle, PeopleSoft, SAP and Siebel Systems, enterprises are, for the first time, seeingalternatives to the point solutions from the smaller vendors. The challenge for these field-service-specificvendors continues to be in expanding the industry presence from the perspective of domain expertise andfunctional depth, together with convincing integration capabilities. Creation of new industry packages isvery expensive and resource-intensive and has been beyond the abilities of the point solution vendors.

Field service vendors include:

• Amdocs/Clarify

• Antenna Software (wireless access)

• Apsolve (European Union only)

• Astea International

• ClickSoftware

• Corrigo

• Datria Systems

• Dexterra

• FieldCentrix


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• MCA Solutions (parts planning and execution)

• Mobile Data Solutions, Inc. (MDSI)

• Metrix Systems

• Nexterna

• Oracle

• PeopleSoft

• PointServe

• River Run Software

• ServiceCentral Technologies

• ServicePower

• Servigistics

• Siebel Systems

• Telcordia Technologies

• Telispark

• ViryaNet

• Wishbone Systems

• Xelus (parts planning and execution)

Table 15. Gartner's Field Service Management Magic Quadrant: 2003


Siebel Systems MDSI Oracle and PeopleSoft SAP, Amdocs, J.D.Edwards, FieldCentrix,Astea International,Metrix and WishboneSystems


For the specific positions of vendors in Gartner's Magic Quadrant for this market segment, see "CRMField Service Management Magic Quadrant 2003," M-19-3538.

11.3 PRM for Service

Vendors that provide PRM for service include:

• Click Commerce


• Siebel Systems


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11.4 E-service

Vendors that provide e-service include:

Vendor name Web self-service

E-mailresponsemanagementsystem

Collaboration Voice Hosted

24/7 Customer No Yes Yes Yes Yes

Amacis Yes Yes Yes No No

Amdocs/Clarify Yes No No Yes No

Apropos Technology No Yes Yes Yes No

Aspect Communications/TCS No No Yes Yes No

Avaya Yes Yes Yes Yes No

Baan Yes Yes No No No

Broad Daylight Yes Yes Yes Yes Yes

Centra Software No No Yes No Yes

Chordiant Yes Yes Yes No No

Cintech Yes Yes No Yes No

Cisco No Yes Yes Yes No

E.piphany Yes Yes No No No

eAssist Global Solutions Yes Yes Yes No Yes

EchoMail No Yes No No Yes

Edify Yes Yes Yes Yes No

eGain Yes Yes Yes Yes Yes

eHelp Yes No No No No

eStara No No No Yes No

Expertcity No No Yes No No

FaceTime Communications No No Yes No Yes

Firepond Yes Yes Yes No No

Genesys Labs No Yes Yes Yes No

Hipbone No No Yes No Yes


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InQuira Yes No No No No

Interactive Intelligence Yes Yes Yes No No

IPhrase Technologies Yes No No No No

Island Data Yes Yes No No Yes

J.D. Edwards Yes Yes No No No

Kaidara Software Yes No No No No

Kamoon Yes Yes No No No

Kana Yes Yes No No Yes

Kanisa Yes Yes No No No

KnowledgeBase Solutions Yes No No No No

LivePerson No No Yes No Yes

Lotus Sametime No No Yes No No

Mindfabric Yes No No No Yes

Mshow/InterCall No No Yes No No

NativeMinds Yes No No No No

NetbyTel No No No Yes No

noHold Yes No No No Yes

Nuance Communications No No No Yes No

Oracle Yes Yes Yes No Yes

Pegasystems Yes Yes Yes No No

PeopleSoft Yes Yes Yes No No

PeopleSupport Yes Yes Yes Yes Yes

Pivotal Yes No Yes No No

PlaceWare/Microsoft No No Yes Yes Yes

Primus Yes Yes No No Yes

RainDance Communications No No Yes Yes Yes


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RightNow Technologies Yes Yes Yes Yes Yes

Rockwell Yes Yes No Yes No

SafeHarbor Technology Yes No No No Yes

SAP Yes Yes Yes No No

ServiceWare Yes Yes Yes No No

Siebel Yes Yes Yes No No

SpeechWorks International No No No Yes No

SupportSoft Yes No No No No

Talisma No Yes Yes No No

TellMe Networks No No No Yes No

TheBrain Technologies Yes No No No No

TightLink Yes Yes Yes Yes No

Webex Communications No No Yes Yes Yes

Webhelp No Yes Yes Yes Yes

WebTone Technologies Yes Yes No No No

WiredRed Software No No Yes No No

11.5 Web Collaboration

Web collaboration includes such features as "call me," live voice, conferencing, browser and applicationsharing. Vendors serving this market include:

• Centra Software

• Cisco ICSG (Internet Communication Services Group)

• eGain Communications (Sitebridge)

• FaceTime Communications (instant messaging)

• LivePerson

• Mshow/InterCall

• PeopleSupport


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• PictureTel

• PlaceWare (Microsoft)

• Raindance Communications

• RealCall/Adeptra

• WebEx Communications

11.6 Quality Assurance and Logging

Vendors providing quality assurance and logging capabilities include:

• ASC Telecom AG

• Dictaphone

• e-talk

• Envision Telephony

• Mercom Systems

• Nice Systems (acquired Thales/Racal)

• Verint Systems

• Witness Systems (acquired Eyretel)

11.7 Web-Based Survey Solutions

Vendors that provide Web-based survey solutions include:

• CustomerSat

• Custom Research

• Decisive Technology

• EZ Survey

• Guideline Research

• Perseus Development

• QualSoft

• Respond

• Responsetek Networks

• SurveyConncect

• SurveySaid

• SurveySite

• WebSurveyor Corp.


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• Zoomerang/MarketTools (SurveySite and Zoomerang are focused on integration to CRM)

11.8 Workforce Management

Vendors that provide workforce management software include:

• Aspect Communications/TCS

• Blue Pumpkin

• CenterForce Technologies (acquired RightForce)

• Exametric

• Expert Solutions International

• Genesys Telecommunications Laboratories

• Global Management Technologies

• IEX/Tekelec

• InVision Software

• ISC

• Pipkins

• SYMON Communications

11.9 Contact Center E-Learning

Vendors that provide contact center e-learning capabilities include:

• Envision Telephony

• Knowledge Powered Solutions

• Sivox Technologies

• Witness Systems

To better understand the capabilities of the above products, and others, Gartner categorizes them, inaddition to the manner above, in several other groupings.

• For the call center:

− AIT Group

− Amdocs/Clarify

− Avaya

− Chordiant Software

− E.piphany

− Kana

− Onyx Software


Copyright 2003R-20-41947 July 2003 69

− Oracle

− Pegasystems

− PeopleSoft

− S1

− SAP

− Siebel Systems

− WebTone Technologies

• European-focused financial services vendors:

− AIT Group

− Chordiant Software

− Eontec

− FINEOS

− Touchpaper Software

− UNiQUARE Financial Solutions

• Call center performance management:

− AIM Technology

− Blue Pumpkin Software

− CenterForce Technologies

− divine

− Merced Systems

− Performix Technologies

− Witness Systems

11.10 Citizen Service Request

This small class of vendors has built practices around helping areas of government run citizen help desks,311 centers, maintain properties and run departments.

− Ever America (SuiteResponse)

− Hansen Information Technologies

− Lagan (EMEA)

− Motorola (Suncoast)

− WorkDynamics ccmMercury


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12.0 What Is Next?

A new breed of business application is emerging that differ in scope from current packaged applications,targeting cross-function, end-to-end business processes. They differ in technology base by incorporatingnot only transaction processing using relational data, but also the styles of processing associated withcollaborative work processes, content management and business analytics, with the use of a service-oriented architecture as a key enabler. Business process management technology is also key in enablingflexible configuration of application components to match specific processes in an enterprise. None ofthese factors viewed independently is entirely new, but the confluence marks a discontinuity in thebusiness application market. Gartner has termed this new category "business process fusion"applications. For reference, see "New Applications Emerge — Business Process Fusion," T-19-4028.

Application innovation continues, with a host of new vendors, many of which are not yet formally coveredin Gartner research. For example:

• a.p.solve (advanced field force management)

• Axeda Systems (telemetrics)

• Business Rules Solutions (rules verification)

• ClearForest (text extraction)

• CommerceQuest (advanced business process management and simulation combination)

• Corticon (business rule authenticator)

• Digital Fuel Technologies (contract management)

• ePeople (collaborative case management)

• Fast-Talk Communications(audio search)

• Indivos (biometric micropayments)

• Kaidara Software (self-service for technical support)

• Kintana/Mercury Interactive (change management or portfolio management)

• MCA Solutions (parts optimization)

• MindBox (case-based reasoning)

• ProSight (decision optimization)

• Questra (telemetrics or intelligent device management)

• Rules Power (advanced business process management and rules combo)

• SIMUL8 (simulation and animation)

• Sand Technology (very high-end analytics)

• ScanSoft (in speech recognition)

• Servigistics (parts planning)

• Synthean (business activity management capabilities and real-time decisioning)


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• TeamPlate (Microsoft .NET business process management and business activity management)

• Think Tools (decision optimization)

• Ultimus (Simulation, rules, business process management and business activity managementcombination for .NET)

• United Management Technologies

• Vocent Solutions (voice verification for password reset)

Businesses will continue to focus on unlocking the value of established investments. This will delay thesales of new applications and help some integrators and consultancies survive the drought of newprojects.

Ultimately, a three tier CRM market is emerging and includes:

• The "biggies" (for example, Amdocs, Oracle, PeopleSoft, SAP, Siebel and SAS Institute)

• "Sunset" CRM vendors (for example, Pivotal, Kana, Onyx and E.piphany)

• Upstarts (see above)

13.0 Conclusion

A diverse and fragmented group of vendors operate in the market loosely referred to as CRM. CRMremains primarily a business strategy and not a vendor market. Enterprises looking for products shouldunderstand the segments and sub-segments within which a vendor operates. The market for CRM-relatedproducts will continue to undergo rapid consolidation through 2005 as economic realities drive companiesto seek refuge within better financed and better positioned rivals or partners.

The large vendors will push vertical and process-specific solutions. They will not succeed in all sectors,and Gartner expects a shakeout in 2005 where verticals will cease to receive investment. Gartner alsoanticipates the demise of more than 100 vendors worldwide in the 2003/2004 time frame.

Before evaluating a vendor for a shortlist, enterprises should consult an analyst, conduct the proper duediligence and check vendor references thoroughly.


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Appendix A: Acronym Key

ACD automatic call distributor

ASP application service provider

ATG Art Technology Group

ATO assemble-to-order

B2B business to business

B2C business to consumer

BOB best of breed

CG consumer goods

CRM customer relationship management

CRO customer relationship optimization

CSC Computer Sciences Corp.

DST direct sales technology

EIM enterprise information management

EMEA Europe, Middle East and Africa

ERP enterprise resource planning

ESP external service provider

ETO engineer to order

IC incentive compensation

ICM incentive compensation management

IVR interactive voice response

J2EE Java 2, Enterprise Edition

OMS opportunity management system

MRM marketing relationship management

MSB midsize business

POS point of sale

PRM partner relationship management

ROI return on investment

SCM supply chain management

SCS sales configuration system

SFA sales force automation

SIM Sales Incentive Management (PeopleSoft)

STO ship to order


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Related Datapro Research

Vendor Report Title Note No.

Amdocs Amdocs Clarify CRM Sales Solution DPRO-93319

Amdocs ClarifyCRM Marketing and Analytics Solution DPRO-90654

Amdocs Clarify CRM Service Solution DPRO-96684

Best Software Best Software SalesLogix DPRO-109720

Blue Martini Blue Martini CRM Marketing Solutions DPRO-109272

Chordiant Chordiant CRM Sales Solutions DPRO-109244

Chordiant CRM Marketing Solutions DPRO-93950

Chordiant CRM Service Solutions DPRO-109360

E.piphany E.piphany E.6 Sales Solutions DPRO-102380

E.piphany E.6 Marketing Solutions DPRO-92622

E.piphany E.6 Service Solutions DPRO-103119

FrontRange FrontRange Solutions GoldMine FrontOffice CRM Applications DPRO-111272

Kana Kana iCARE CRM Marketing Solution DPRO-93372

Kana iCARE Service Solution DPRO-96427

Microsoft Microsoft CRM: The Product DPRO-112683

NCR/Teradata NCR Teradata CRM DPRO-97316

Onyx Onyx Enterprise CRM Sales Solution DPRO-102536

Onyx Enterprise CRM Marketing Solution DPRO-94022

Onyx Enterprise CRM Service Solution DPRO-98071

Oracle Oracle CRM Sales Solutions DPRO-92569

Oracle CRM Marketing Solutions DPRO-90836

Oracle CRM Service Solutions DPRO-103816

PeopleSoft PeopleSoft 8.4 CRM Sales Solution DPRO-95290

PeopleSoft 8.4 CRM Marketing and Analytics Solution DPRO-100175

PeopleSoft 8.4 CRM Service Solution DPRO-90557


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Vendor Report Title Note No.

Pivotal Pivotal CRM Sales Solution DPRO-101579

Pivotal CRM Marketing Solution DPRO-101578

Pivotal CRM Service Solution DPRO-101602

Salesforce.com Salesforce.com DPRO-109618

SAP SAP mySAP CRM Sales Solutions DPRO-105707

SAP mySAP CRM Marketing Solutions DPRO-104523

SAP mySAP CRM Service Solutions DPRO-94012

SAS SAS CRM Marketing Solutions DPRO-112860

Siebel Siebel CRM Sales Solutions DPRO-94307

Siebel CRM Marketing Solutions DPRO-96322

Siebel CRM Service Solutions DPRO-90635

Appendix C:


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Gartner Analysts and CRM Coverage Areas

Marketing Strategies

Gareth Herschel CRM analytics, customer segmentation and customer relationshipoptimization

Adam Sarner e-marketing and customer loyalty

Walter Janowski customer privacy, personalization, customer relationship managementand real-time enterprise

Claudio Marcus marketing resource management and business-to-business marketing

Sales LeadershipStrategies

Rob DeSisto sales leadership strategy, partner relationship management, CRM salessuites, CRM for manufacturing, indirect sales strategies and salesconfiguration

Joe Galvin direct sales and incentive compensation

Dale Hagemeyer consumer goods for sales and life sciences for sales

Ed Thompson European sales vendors

Customer Service andSupport Strategies

Michael Maoz customer service and support strategies, field service management andapplications, contact center service and support applications; andpartner relationship management (service aspects)

Esteban Kolsky Web self-service, e-mail response management systems, knowledgemanagement and customer feedback systems (surveys)

Wendy Close CRM Midsize business (MSB), customer service applications for theMSB, workforce management, quality assurance software and contactcenter performance management

Alexa Bona European customer service and support strategies and applications

the gartner crm software vendor guide: 2003marketplace by 2006. operations (erp) products (scm)”...

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