Last month in CRM Software – CRM market news digest June 2012

July 4, 2012 Richard Boardman

I’d barely pressed the publish button on a blog post suggesting that Microsoft might be in denial on social media when rumours circulated – based initially on an overheard conversation in The Creamery in San Francisco – that Microsoft was in the process of acquiring Yammer, a social collaboration tool.

The rumour was confirmed on June 25 when Microsoft announced it had purchased Yammer for $1.2 billion in cash. Yammer currently has 5 million users and competes heavily with Salesforce.com’s Chatter. The move clearly gives Microsoft much needed impetus in closing the gap with its competitors in terms of social capabilities.

In principle greater integration of Yammer with Microsoft’s SharePoint, Office, Dynamics CRM, and Skype products will create a powerful platform. The two question marks are whether a product that positioned itself as ‘social Switzerland’, can continue to thrive with its independence crimped as part of Microsoft, and, secondly, how successfully they are able to integrate the acquisition into the product line up. A question made all the more pertinent by Microsoft’s recent announcement that it is writing off $6.2 of the $6.3 billion cash it paid for on-line advertising agency aQuantive in 2007.

While the Yammer acquisition is clearly a big step forward, it’s unlikely to be the only one that Microsoft will need to take as the acquisition frenzy hardly abated much in June. Oracle announced that it was purchasing social media marketing platform Collective Intellect for undisclosed terms.

Salesforce.com showed that they weren’t about to take their foot off the accelerator any time soon with the purchase of ChoicePass, a corporate perks service for small and mid-sized companies, and group communications provider Thinkfuse. Terms were not disclosed for either deal. The ChoicePass purchase looks as though Salesforce were looking to acquire the team, and the Thinkfuse capabilities look as if they will be integrated into Chatter.

In both cases the existing services will be shuttered. The Thinkfuse web-site said ‘Thinkfuse will cease its operation and service effective July 25, 2012. Subsequently, all customer data will be deleted’. Perhaps a salutary reminder of there’s no guarantee that a web service which you may come to rely on may always be available.

In other, non-acquisition related news, IDC released data suggesting the CRM market slowed in the second half of 2011, with software revenue growing 11.2% for the year as a whole, to a total value of $19.1 billion. It had Oracle as having the largest slice of the pie with 11% of the market, closely followed by SAP and Salesforce.com with 9.9 and 9.5 % respectively. It does raise the question, with a rash of announcements from Sugar, Infusionsoft, Microsoft, and Salesforce and others, of growth rates far exceeding 11%, whether everyone’s maths actually stacks up. Presumably someone must be losing out badly somewhere?

On June 6, in a much heralded event, Larry Ellison announced the availability of the Oracle Cloud which will contain over a hundred enterprise applications. Like Salesforce.com the applications will be for a monthly subscription, but unlike Salesforce.com the applications will be on their own virtual machine rather than follow Salesforce’s multi-tenant model. Details on pricing were not available and it appears only the CRM, HR, and Social applications are currently available. Some commentators at least were confused how much of this major announcement was actually news, but there were plenty of swipes at SAP, Salesforce, and Workday to keep everyone entertained.

Oracle also released its fourth quarter figures during the month which outpaced Wall Street’s expectations, with net income of $3.5 billion on revenue of $11 billion. Revenues for fiscal year ended 2012 were $37.1 billion, up 4% on 2011. New software revenues were up 8% to $9.9 billion for the year, holding up well despite the pressure from competitors. With the new Oracle Cloud coming on stream it will be interesting to see how the company grows in fiscal 2013.

Finally, on the Salesforce.com front, the company announced an alliance with Twitter that will allow Twitter’s 400 million tweets per day to be pushed directly into its Radian6 product allowing users to access and analyse them in real-time. Assuming Salesforce were themselves using Radian6 on June 28^th they might have noticed a spike in activity and some rather negative sentiment as the company suffered a fairly significant outage that impacted its NA2 instance for several hours. Salesforce’s NA3, NA4, and EU0 instances, the latter accessed by European users, also suffered performance degradation.

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