Last month in CRM Software – CRM market news review for October 2012

November 11, 2012 Richard Boardman

In summary: the social arms race continues, Oracle appoints a new guest antagonist, and Microsoft’s surprising marketing acquisition….

When we left off last month Oracle OpenWorld 2012 was just kicking off in a San Francisco recently vacated by Salesforce.com’s Dreamforce event. In contrast to Dreamforce, OpenWorld represents a much broader set of interests than just CRM including hardware, database software, and Oracle’s huge range of non-CRM applications. Cloud and social were unsurprisingly key themes.  Larry Ellison, Oracle’s CEO, hammered home Oracle’s cloud vision of allowing customers the flexibility of deploying software on-premise or in the public or private cloud. There seemed to be a suggestion that this was a unique approach, but given that SugarCRM and Microsoft, amongst others, seem to be offering something remarkably similar, it’s hard to pin down why.

Regardless of the exclusivity of the approach, it’s a sensible strategy given it’s something that Salesforce doesn’t really offer. How effective a differentiator it will prove to be remains to be seen. On the social side of things Oracle unveiled the Oracle Social Relationship Management Suite, which blended existing social capabilities with its recent Vitrue, Collective Intellect, and Involver acquisitions, to offer social listening, engagement and marketing capabilities, and is testament of the growing social arms race between the major vendors.

With Salesforce.com CEO Marc Benioff now persona non grata (from an Oracle perspective at least), NetSuite’s Zach Nelson, played what Denis Pombriant nicely described as the OpenWorld guest antagonist role. Nelson articulated a vision of a two tier system with NetSuite acting as the system of choice for divisions and subsidiaries pumping data into an Oracle system at the headquarters level. While the context for this was ERP, it will be interesting to see if any vendors start to advocate a similar approach from a CRM perspective.

The good news for Zach Nelson was that the consensus seemed to be that he didn’t upset anyone sufficiently to prevent him being invited back next year. The good news didn’t stop there though. Netsuite’s Q3 results, released in October, showed revenues for the quarter up 31%, to $79.8 million, on the same period last year. The net loss for the period also increased year on year to $8.0 million from $6.9 million in 2011. The market was evidently impressed with the figures however and the share price rose 15% on the day.

Microsoft, who seemed to be keeping a low profile for the last few months following its Q2 release mishap, burst into life announcing the completion of the acquisition of marketing software provider MarketingPilot. This seemed to surprise commentators, not so much that Microsoft was making an acquisition in the space, but with the speed with which the acquisition was completed and that it wasn’t the high profile target that most were expecting.

With around 500 customers and 40 staff, MarketingPilot has made a name for itself in the Marketing Resource Management (MRM) space, though it has extended it offering into areas such as marketing automation. The purchase price was not disclosed, and it’s unclear if this was a strategic or opportunistic purchase. It will be interesting to see how MarketingPilot will be integrated into the Microsoft CRM suite. Microsoft weren’t offering too many clues beyond more being revealed at its Convergence 2013 event in March.

Concerns about Microsoft’s abilities to successfully integrate new acquisitions were at least partly addressed by the October announcement that Yammer, which it had acquired for $1.2 billion in June, had been natively integrated into Microsoft Dynamics CRM. Given the blizzard of acquisitions by Salesforce.com and Oracle, particularly in the social space, the ability to integrate these purchases quickly and effectively will become a key battleground.

Microsoft’s Q1 results released in October showed revenues down 8% from the same period last year at $16.01 billion. Sales of Microsoft Dynamics CRM however significantly bucked the trend, up over 30%.

SAP’s Q3 figures showed strong growth for its cloud services as well as it HANA in-memory computing platform. Software sales were up 17% to 1.03 billion euros. Overall earnings were down however to 618 million euros from 1.2 billion for the same period in 2011.

SAP were also getting in on the social side of things during October with the release of SAP Jam, a platform combining the features of the Jam enterprise social network from its purchase of SuccesFactors with SAP’s existing StreamWork collaboration software. The platform will be geared around solving specific business issues, rather than general productivity support, and will be integrated into a number of SAP applications including SAP CRM and Sales OnDemand.

Elsewhere, email marketing vendor ExactTarget, extended its offering with the purchase of marketing automation company Pardot, and web-site personalisation provider iGoDigital for $95.5, and $21 million respectively.

Third party maintenance and support provider Rimini Street announced support for Oracle’s Hyperion business intelligence software. The company is promising thirty minute guaranteed support and savings of 50%. It’s these sorts of eye-catching benefits that have enabled Rimini Street to grow steadily despite a looming court battle with Oracle which is expected take place next year. If things go their way expect a surge in demand for their services, an IPO, an extension of their services to new products including, potentially, Microsoft CRM and Salesforce.com.

Finally on the Salesforce.com front, there was speculation that the company was looking to replace the Oracle database software that underpins its SaaS offering with an open source platform. That Salesforce runs on Oracle has clearly been the source of some discomfort given the increasing rivalry between the two organisations. With Salesforce.com apparently looking to recruit engineers skilled in PostgreSQL for a major project, some commentators are suggesting Oracle is on its way out. Whether this is a case of two plus two equalling five remains to be seen, but we will watch with interest.

Elsewhere it seems Salesforce.com laid off around a hundred staff, eliminating duplicate roles following the combination of its Radian6 and Buddy Media acquisitions into its marketing cloud. It will be interesting to see if this an isolated piece of rationalisation or whether this is part of a wider move to cut expenses which have ballooned as the company has grown.

Finally, Salesforce.com was named as number one in the Forbes list of the world’s most innovative companies. Recognition perhaps that their achievements are notable on a much bigger stage than the CRM market.

That concludes my take on the news for October. If I’ve missed or misunderstood anything significant please feel free to comment!