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Enterprise Software Chronicles: A synthesis of the rapidly evolving customer technology landscape

June 5, 2013 by Leave a Comment
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Over the past several weeks, I’ve had the privilege to have hundreds of conversations with technology vendor executives, resellers and system integrators, consultants and companies of all sizes (enterprise, mid-sized, and SMBs) across a variety of industries; high tech, professional services, retail, manufacturing, financial services, biotech, etc.

The common thread is that organizations of all sizes are building and evolving in order to adapt for the next era of commerce. Smaller technology vendors are racing to build point technology solutions that are easily consumable, deployable, and integratable, while major enterprise vendors are racing to add capabilities to provide a one stop shop for business applications.

Salesforce buys ExactTarget (not Marketo)

Yesterday, Salesforce.com shared that it intends to purchase ExactTarget for $2.5 Billion. It took about 18 months longer than expected, but Salesforce finally filled a hole in its marketing cloud with marketing automation capabilities. I didn’t necessarily see ExactTarget coming as Marketo was the obvious choice to fill the hole, especially since Oracle scooped up Eloqua last December.

ExactTarget brings with it a long history in email management, and the marketing automation capabilities of Pardot, which will need to be retrenched to enable its capabilities to be leveraged by enterprise customers, following the up-market path that Salesforce has already been on for the last several years.

With ExactTarget, Salesforce picks up a company with a large install base with at least twice the revenue of Marketo and for likely less than twice the multiple of trailing twelve months revenue. In short, it was simply a better deal.

The ExactTarget install base also likely leads to more new business opportunities as their customer mix is more diversified from a CRM perspective than Marketo is. A disproportionally large percentage of Marketo customers are also Salesforce customers. Marketo CEO Phil Fernandez wrote this response to the announced ExactTarget acquisition today.

The messaging from Marketo at its recent Marketo Summit seemed to be well positioned to make a run as an independent software vendor as they began to expand their messaging from being just a marketing automation vendor towards a complete marketing platform. They now own mindshare as the leading independent marketing automation vendor, and there is certainly market opportunity to create a more robust and integrated platform for marketers to manage their activities, especially if the forecasts that the CMO will control more technology budget than CIOs actually comes true in coming years. It will be interesting to see how Marketo competes with the larger vendors and more integrated platforms.

For more on the acquisition, Craig Rosenberg has collected some great input from the community over on the funnelholic blog.

Speaking of Oracle…

In late April, I spent some time with Oracle at Oracle Analyst World and heard and observed how they are working towards integrating their entire stack of offerings. It’s a herculean effort, and they are making progress across a number of fronts.

Oracle is very uniquely positioned. They have nearly 4,000 software products and introduced more than 270 new ones during the last 4 quarters alone. They’re breadth of coverage and depth across the entire technology stack is impressive and mind blowing. Their market cap is in excess of $160 Billion.

Oracle_Stack_2013

This creates a number of challenges: The technology challenge is a large enough one. Messaging internally and to the marketplace is still clearly a work in process, and held hostage to an identity that is simultaneous beholden to a large install base of enterprise customers that are 10 years behind and cloud innovators that require agile and hyperspeed change. A massive sales force who has predominantly sold “On Premise” software is having to be retrenched to speak the language of the cloud, and product domain expertise is still undergoing a large transformation, and is likely in the midst of a multi-year effort.

As deep as Oracle’s coverage is, they’ve been on a heavy acquisition spree in emerging spaces where they want to rapidly fill emerging capabilities holes. The following applications have been acquired in recent years to fill the functional requirements in a rapidly evolving business landscape that places a higher focus on data & analytics, social, and customer experience, respectively:

  • RightNow – Customer Service
  • Taleo – Recruiting and Learning Mgmt
  • Eloqua – Marketing Automation
  • Collective Intellect, Involver, and Vitrue – Social (trying to position the collective capabilities of each of these products as the only end to end digital marketing platform. Salesforce sort of just blew that up a bit.)
  • InQuira and Endeca – Knowledge Management, Big Data & Analytics

Often, as these emerging technology companies get acquired into the massive technology behemoth, talent from the acquired organizations quickly leaves. We’ve seen this with the recent departures of former RightNow CEO, Greg Gianforte, Eloqua’s CEO Joe Payne. Several folks from Endeca have also left post-acquisition. Oracle also recently lost Anthony Lye, a polished leader who was leading Oracle’s positioning as a customer experience leader. The hole left is apparent. However, conversations with folks from Involver earlier in the year indicated that the opportunity to leverage the talents and expertise of Oracle, and the opportunity to sell in to the massive and well respected client base was a dream come true.

Oracle also continues to make slow but steady progress with their Fusion applications deployments, primarily in the world of CRM and HCM, acquiring over 100 new customers last quarter, the vast majority opting for SaaS deployments.

Lithium

While Oracle races to develop and integrate an entire portfolio of offerings, other players race to develop core competencies in emergent white spaces. Lithium is one such company. At their Linc conference, Lithium highlighted customer stories of the emerging digital peer to peer economy. Lithium recently positioned themselves as leading providers of social software that powers the social customer experience. Essentially, what this means is that they help power customer community platforms that enable brands to provide savings in customer support, crowd powered innovations, digital word of mouth marketing, and in some cases, even enable new business models to be pioneered. At Linc, Lithium did a great job of highlighting customer stories like Barclay’s Ring Credit Card and Australia’s Commonwealth Bankfinancial services innovation products, as well as customer support innovations from organizations like Time Warner Cable. They also announced forthcoming innovations in data analytics and insights that enable organizations to sense, respond, and share with greater effectiveness. While Lithium executives shared that they intend to go IPO in the near future, they appear to be a good acquisition target for a certain German enterprise giant who is also racing to fill in holes in its offering.

Speaking of analytics

SAS Institute held their Global Forum in San Francisco. SAS Institute has an impressive resume. They are repeatedly mentioned as one of the top places in the world to work. They have increased their revenue for 37 consecutive years. They have a dominant market position when it comes to analytics and a customer base that would be enviable to anyone. SAS highlighted their continued foray into predictive analytics, and the capabilities they have to process huge amounts of data in record speed. By the way, they also hold top notch events. As great as SAS is, while I don’t have any hard data that I can present here, I get a sense that SAS can be disrupted by analytics vendors who can provide a cleaner, more user friendly interface that is quickly deployable.

SAP also filling in Holes

SAP announced today their intent to acquire e-commerce player Hybris, further adding to their commercial offering. SAP has a ton of innovative initiatives at present and is betting big on HANA in memory database as a unifying layer to speed transactions and access to information. SAP’s answer to the social collaboration question is SAP Jam, which is making steady progress and is being positioned not as a standalone product, but as a communication layer that intersects more common functional systems. SAP is touting 360 customer, but still has a ways to go in creating clear differentiation to the markets of which products or mix of products fits for certain use cases and scenarios.

SAP is a constant competitive target for Oracle, and has been for a long time, but I was surprised at the frequency and depth of attacks that SAP received at SuiteWorld in San Jose just a few weeks ago.

NetSuite

Rising from the Mid-Market is NetSuite, who continues its desired ascent into the enterprise. NetSuite founder Evan Goldberg left Oracle about the same time as Marc Benioff, with a fundamental belief that organizations should run their entire infrastructure in the cloud, not just their sales organization. As Salesforce continues to build their platform to meet the needs of CMOs and customer facing personnel, NetSuite continues to build an integrated platform to meet the needs of fast growing organizations.

NetSuite has a deep history working with small to mid sized enterprises and they’ve carved out a niche without many competitors. Evident at SuiteWorld 2013 was their attempt to continue to move upstream as multi-billion dollar global customers Qualcomm and Williams-Sonoma talked about how they had leveraged NetSuite to rapidly evolve their businesses in the cloud.

New partnerships with AutoDesk and CapGemini also help to add validity to their Enterprise capabilities.

The addition of greater e-commerce capabilities, improved customization and development tools, discreet manufacturing capabilities, and deeper vertical offerings will continue to make them a viable contender for both fast growing SMBs and divisions of large global enterprises.

As an 8 year NetSuite customer told me yesterday, however, “NetSuite is not necessarily best of breed at any one function. However, they are best of breed as an integrated platform to run your business on.” That’s a compelling value proposition for many organizations and is a clue why NetSuite continues to grow at a healthy pace.

In Summary

While the technology vendors were highlighted in this post, companies in all industries are trying to adapt to a new speed of business and are looking for answers on how to prepare their organizations to compete and win in an environment that is increasingly digital.

Trials and experiments are slowly paving the way for emerging best practices, but the paths to a common destination are still being defined in a race towards relevance and market leadership.

To discuss the right strategies for your organization moving forward, please drop me a note.

Disclosure: My travel expenses and conference registrations were paid for by Oracle, Marketo, NetSuite, Lithium, and SAS, respectfully. I have received no request or remuneration for this post and these are my candid views based on my research, observations, and personal experience.

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The Digitization of Human Interactions: From Long Tail to Mass Disruption

February 13, 2012 by 21 Comments
Photo Credit: Ceibs.edu

Photo Credit: ceibs.edu

“Because the purpose of business is to create and keep a customer, the business enterprise has two, and only two, basic functions: Marketing and Innovation.” – Peter Drucker

Last week I had the pleasure of spending some time at Online Marketing Summit at the Hilton San Diego Bayfront Hotel.

Aaron Kahlow founded the conference several years ago and it has seen tremendous growth in just a few years. In fact, it was acquired just a few months ago, and added to the growing list of brands at UBM TechWeb.

We are in the midst of a sizable evolution. That’s no surprise or epiphany to most of us. But peeling a layer or two off of the onion reveals deeper insights about what’s really happening, and more importantly, where senior marketers, should be allocating their money and time.

Marketing’s longtail (online, digital, seo) first became a fringe disruptor of marketing strategies (where we’ve been over the last 15 years or so), and has moved its way steadily towards securing its place as a core component of marketing practice (a few years into this journey now). In some organizations, it leads the way and sets the primary agenda related to an organization’s customer acquisition and retention strategies. For others, that change is quickly coming. Moving forward, “digital” not only will rule marketing, but has the potential to re-define entire business models (think what’s happened to books, music, media).

This once small sliver of the marketing universe is slowly and steadily charging its way to the label enabler of mass disruption.

Considering this phenomenon in 2006, specifically assessing Threadless’ new innovative crowdsourced manufacturing business model, Tim O’Reilly asked “How far off is a future in which the creative economy overflows the thin boundary that separates ‘information’ from ‘stuff’?”

If we consider for a moment the growth of gaming, augmented reality, digital and social network engagement, coupled with the rapidly expanding worlds of mobile and cloud computing, the very fabric of human interactions is being rewired. This clearly has significant implications on one core societal function: commerce, and with it of course, marketing.

Below are 5 key takeaways solidified during my time at #OMS12.

CONTENT STILL REIGNS

The content marketing drum has continued to get louder over the last decade. According to a 2012 study by the Content Marketing Institute;

  • 90% of B2B marketers do some kind of content marketing whether they realize it or not, and
  • 60% of B2B marketers intend to spend more on content marketing in the next 12 months.

It was a central theme at the conference, highlighted at 3 sessions I attended:

“The difference between good and great content marketing,” by Joe Pulizzi
“From Content to Customer” by Joe Chernov
“Integrating Social, SEO & Content” by Lee Odden

(You can find my raw session notes by clicking on the links above. There are plenty of good nuggets in there.)

Despite content marketing’s strong growth, 41% of the marketers in the CMI study said that their greatest challenge was creating content that engages prospects and customers.

I suspect that is because we are witnessing a changing of the guard. Brochureware, product feature catalogues, and brand messages just don’t resonate in a world where attention is the greatest and scarcest of resources.

Experienced marketers are having to unlearn what they know and relearn new tools and methodologies. Many new marketers don’t have the framework and business savvy that comes with experience to put all the pieces together.

Joe Pulluzi and Joe Chernov, respectively, reinforced the idea of creating something of extreme value and then giving it away for free. Social networks allow word of mouth referrals to take place with unprecedented speed and reach, and studies have shown that people are much less likely to share a heavily branded or gated piece of content. In their own words, they underscored the importance of establishing a position of expertise, providing something that is worth their attention, and talking about yourself as little as possible.

Advertisers have long used the concept of product placement for branding purposes within a context that is usually devoid of ads. This philosophy can now be applied across a wide range of mediums and content forms. Subtly branded communities (Proctor & Gamble has several), whitepapers, blogs, eBooks and infographics (HubSpot and Eloqua have done some really good things here) are all ways to fill the top of the funnel.

If you haven’t seen it, DC shoes shows how an experience can be created within a piece of content that resonates with a target audience. It’s a prime example of marketing innovation that has garnered more than 15,000,000 views to date.

Facebook is betting the farm on these principles with their announcement and foray into the world of “Sponsored Stories”, where sponsored content will be embedded within the context of “friends” digital interactions across the web.

While the manifestation of B2C vs. B2B content marketing may ultimately look significantly different, the underlying principles remain the same.

ANALYTICS PLAYING A BIGGER ROLE EVERYWHERE

Ironically, the exponentially increasing amount of digital content and digital interactions is creating overwhelmingly large sets of content, information, and data. Known to many as the issue of “Big Data”, appropriate filters and tools are increasingly important to help decision makers convert massive data sets into meaningful insights, which should ultimately contribute to critical decision making.

Asterdata, acquired last year by TeraData is using its technology to help marketers make sense of unstructured data from varying data sources to better understand the pulse of their marketplace.

The increasingly crowded Social Media Monitoring space was represented at the conference by Radian6, Marketwire Sysomos, and a relatively new entrant to the party named Metavana.

Metavana is particularly interesting for 2 reasons:

1. They claim that their sentiment analysis engine is 90% accurate, which quite frankly is hard to believe, as that practically would far exceed industry norms.
2. In partnership with Satmetrix, they are the exclusive provider of Social NPS – a “Net Promoter Score (NPS) derived from the expressions of sentiment on the social web.”

Claim number 2 is a HUGE (and hard to believe) claim that a previously structured classification (NPS survey response) can now be gleaned from unstructured social signals. These two points alone deserves some time, but this post is already bordering on eBook length, so we’ll save that for another day.

That said, Metavana has an impressive leadership team, and are ones to watch in the space.

DIGITAL FOOTPRINTS PROVIDE DEEPER INSIGHT INTO THE BUYER’S PURCHASING CYCLE

Because more and more of our lives are taking place in the context of a digital medium, digital footprints are being left across the web for marketers to examine. One of the major themes at the conference was the concept of “attribution”, or assigning the proper weight to multiple interactions that may have ultimately contributed to a purchase (or conversion). Up until recently, the “lead source” was typically attributed to the last conversion point, ignoring whether a prospect had had several interactions with an organization across multiple channels prior to that. New technology aims to properly identify, understand and weight each interaction for the amount that it contributed to a purchase or conversion, properly attributing impact of various touches on purchasing related actions during the buying cycle.

Amanda Kahlow, new VP of Consumer Intelligence for Business Online, highlighted how she had developed a program for Cisco, and other organizations, to understand customer and prospect digital signals to ultimately predict purchase behavior. In an interesting narrative about sifting through millions of data points and trying to find patters in the data, their algorithm was ultimately able to predict which prospects and customers were most ready to buy, and what size their order might be. This type of understanding and insight allowed Cisco to:

  • Do better targeted marketing
  • Alert sales, partners, resellers with the right leads and opportunities
  • Measure marketing effectiveness
  • Allow lead scoring to be data driven instead of using arbitrary numbers.

In the end, it’s a story of properly aligning resources with greatest marketplace opportunities in real time to maximize returns for the organization. As more and more buyers interact with digital content, it paves the way for new opportunities for organizations to listen and respond.

FROM BIG, CRUDE, AND MANUAL TO SMALL, MEASURED, AND AUTOMATIC

As a society, we continue to journey down a path from Big, Crude, and Manual to Small, Measured, and Automatic. In the marketing context, that means that we’ve transitioned from broadcast messages with an ask to buy to strategic analysis of buyer’s purchasing journeys and finely articulated responses to each of their actions, with an understanding that there is a detailed set of psychological drivers and interests at each stage of their journey,

It’s the job of marketing (and sales) to understand and align with that journey. The growth of marketing automation, revenue performance management, or whatever the vendors are calling themselves this month, is about automating interactions in the right way, at the right time, on the right channel, in response to prospects signals during the course of their purchasing journeys. Armed with continuous feedback (structured and unstructured, explicit and implicit), marketers increasingly have the opportunity to sense and respond to customer and prospect needs in real time.

WHAT IT ALL MEANS

What’s interesting to me is that the ubiquitousness of digital connection, and increasingly pervasive social network interactions has created a bifurcation in marketing’s focus. The social web has created a seeming “renaissance of transparency”. Being human and real is an often stated mantra for agencies and organizations to follow. The crowd demands it, and is now louder the companies ability to brand themselves. However, more so than ever before, marketing has become data driven, with marketers often moving deeper into the sales cycle, and being held to higher levels of accountability. There is a risk of the left brain taking over too much of the spotlight.

The greatest challenge for marketers today is precisely blending the art of storytelling with the science of analytics for maximum impact in their marketplace.

IN SUMMARY


The conference was great. Many attendees told me they had TOO MUCH to take back and work on. It was nice to catch up with some old friends, meet new ones, and get to know some folks a little better. While we are undergoing a dramatic shift, the old fundamentals of understanding your customer, and responding in a way that resonates is still firmly in place. Technology is changing how our customers behave, communicate, and expect organizations to respond. Organization who do this best will thrive. If these things aren’t yet on your radar, or you’ve shoved social media, content marketing, and/or marketing automation off into a figurative little dark corner within your organization, it may make sense to provide them with a cubicle or office space. Used properly, it holds potential for significant impact. Ignoring these over the long term may relegate your entire organization into that dark insignificant corner.

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CRM Magazine Announces 2009 CRM Market Awards (Social CRM gaining ground)

August 24, 2009 by 2 Comments

This morning, CRM Magazine released their 2009 CRM Market Awards to be announced at the CRM Evolution Conference.

Somewhat surprising recipients appear in the area of Rising Stars include Google, Facebook, Lithium Technologies, and Visible Technologies – internet and social media platforms. In addition to traditional CRM leaders Marc Benioff and Anthony Lye, more social and traditional media stars showed up in the Influentials category including Chris Brogan, Guy Kawasaki, Tony Hsieh, Tim O’Reilly, Jeremiah Owyang, and Ross Mayfield.

One key takeaway for me is this high profile validation of the rapidly merging worlds of Social Media and CRM – recently officially named Social CRM.  Please join the conversation on Twitter by using the #scrm hashtag.

CRM Magazine Announces Winners of 2009 CRM Market Awards

Companies, Customers, and Industry Visionaries Honored for Successes in the CRM Marketplace over the Previous 12 Months

NEW YORK–(BUSINESS WIRE)–CRM magazine, the industry’s leading publication, announced the winners of its 2009 CRM Market Awards here today, in conjunction with the magazine’s CRM Evolution 2009 conference.

With its eighth annual CRM Market Awards, CRM magazine honors the vendors, consultants, and end-user companies that focus on customer relationships and the customer experience through the sophisticated integration of people, processes, and technologies. In each of 10 categories, the magazine named one Market Winner, denoting the highest score compared to its peers. Each category also produced four Market Leader awards and “One to Watch.”

“To stay competitive in a challenging economy, companies must come up with innovative ways to improve their customer relationship efforts. This is exactly what the recipients of the 2009 CRM Market Awards have done,” said David Myron, CRM magazine’s editorial director. “Congratulations to this year’s award recipients for their achievements over the last year. May their CRM efforts continue to succeed.”

Recipients were determined through an extensive three-month process and a proprietary rating formula that involves industry analysts, financial and corporate information, product and functionality assessments, and scores reflecting customer satisfaction.

* Enterprise Suite CRM — Winner: Salesforce.com
Leaders: Microsoft, Oracle, RightNow Technologies, SAP
One to Watch: NetSuite
* Midmarket Suite CRM — Winner: Salesforce.com
Leaders: Microsoft, Oracle, RightNow Technologies, Sage
One to Watch: NetSuite
* Small-Business Suite CRM — Winner: Salesforce.com
Leaders: Maximizer Software, NetSuite, Sage, Zoho
One to Watch: SugarCRM
* Sales Force Automation — Winner: Salesforce.com
Leaders: Microsoft, Oracle, RightNow Technologies, SAP
One to Watch: NetSuite


* Incentive Management — Winner: Xactly
Leaders: Callidus Software, Merced Systems, Synygy, Varicent Software
One to Watch: Makana Solutions
* Marketing Solutions — Winner: SAS Institute
Leaders: Alterian, Eloqua, Silverpop, Unica
One to Watch: Marketo
* Business Intelligence — Winner: IBM’s Cognos Software
Leaders: Information Builders, Oracle, SAP BusinessObjects, SAS Institute
One to Watch: Microsoft
* Data Quality — Winner: SAS Institute’s DataFlux
Leaders: IBM Information Integration Solutions, Informatica, SAP, Trillium Software (Harte-Hanks)
One to Watch: Pitney Bowes Business Insight
* Open-Source CRM — Winner: SugarCRM
Leaders: Compiere, Concursive, SplendidCRM, xTuple
One to Watch: vTiger
* Consultancies — Winner: Deloitte
Leaders: Accenture, Capgemini, Hitachi Consulting, IBM Global Business Services
Ones to Watch: Appirio and Bluewolf

Eight members of the CRM community were named by the magazine as 2009 Influential Leaders: Marc Benioff, cofounder, chairman, and chief executive officer at Salesforce.com; Chris Brogan, president of New Media Labs and social media thought leader; Tony Hsieh, chief executive officer at online-retailing trailblazer Zappos.com; Guy Kawasaki, author and cofounder of aggregation site Alltop; Anthony Lye, senior vice president for CRM at Oracle; Ross Mayfield, chairman, president, and cofounder at collaboration specialist Socialtext; Tim O’Reilly, founder and chief executive officer at publisher and event producer O’Reilly Media; and Jeremiah Owyang, a senior analyst at Forrester Research.

The magazine also named six Rising Stars for the year, including nontraditional CRM players such as social networking behemoth Facebook and search-engine giant Google; information-from-the-cloud upstarts InsideView and Jigsaw; Lithium Technologies, a community-platform provider; and Visible Technologies, which offers brand monitoring and social media analysis.

Lastly, the magazine named four customer implementations as winners of its CRM Elite Award: ISS Belgium, for a large-scale Microsoft Dynamics CRM rollout; NBC Universal, for a sales and marketing effort using Salesforce.com; ShipServ, for its holistic use of Marketo, Salesforce.com, and social media; and Wrigleyville Sports, for its NetSuite e-commerce success.

The 2009 CRM Market Awards are being presented at the CRM Evolution 2009 conference at the Marriott Marquis in New York (http://www.destinationCRM.com/evolution). An expanded version of the results have been published in the September 2009 issue of CRM magazine—available in print and, as of September 1, 2009, in digital NXTBook format (http://www.nxtbook.com/nxtbooks/crmmedia/crm0909/index.php) and online at http://www.destinationCRM.com.

About CRM magazine

CRM magazine is the leading publication of the customer relationship management industry, covering sales, marketing, customer service, and strategy. The magazine also administers and hosts the annual CRM Evolution conference. Each of these properties is designed to serve customer-centric business initiatives, and leaders who recognize CRM as a key strategy for creating enhanced customer value in any industry. For more information about the magazine, its editorial calendar, or CRM in general, please visit us on the Web at http://www.destinationCRM.com, or on Twitter at @CRM (http://twitter.com/CRM) and @destinationCRM (http://twitter.com/destinationCRM). The destinationCRM Web site (which is updated daily) and the monthly magazine are properties of CRM Media, a division of Information Today, Inc.

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