The best will suffer most…

As a long standing veteran of the CRM market, I can recall what happened in the last down-turn in the economy post 9/11. Up to that point CRM vendors seemed to be springing up all over the place, thereafter there was a rapid consolidation. In recent years we’ve seen a surge in new CRM vendors riding on the shirt-tails of the SAAS movement. Will there be a consolidation in the face of the current economic down-turn? Yes, I think a rather major one. But this time around the impact could be very different. Post 9/11 the companies ‘consolidating’ were on premise vendors. Sure it wasn’t pleasant that if you vendor went bust or was acquired, but at least you still had your data. If SAAS players start disappearing that may not be true.

Witness the incredible goings on at Entellium this week, brilliantly reported by Chris Bucholtz on InsideCRM. Senior executives have been charged with wire fraud. It’s alleged that they ran two sets of books, the real ones, and an extremely inflated version for the investors. All employees have been let go, and who knows what’s going to happen to the customers. Entellium won’t be the last to go, and some organisations are going to get badly burned in the process. Sadly it’s the ones that use CRM the best that will suffer most.

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