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Posts from the ‘CRM’ Category

What’s Hot In CRM 2013: Strong Interest In Mobile For Streamlining Sales And Service

Whats Hot in CRM 2013 imageGartner published the report What’s Hot in CRM Applications in 2013, by Ed Thompson on June 20, 2013.  The report covers areas of interest by clients in the four areas of marketing, sales, customer service and e-commerce.

The report states that “the 2013 What’s Hot list was compiled after examining Gartner inquiry volumes by topic. It was then supplemented by asking all Gartner CRM analysts to offer their opinions on what has been generating the most interest during all the client inquiries they have taken since the end of 2012 and in the beginning of 2013.”

Big data, cloud, social, mobile and the Internet of Things are the five catalysts that are driving inquiries in the hottest areas of interest.  Gartner’s Ed Thompson, author of the report, states that “this is where our clients’ interests lie, although not their current CRM spending.”  Technologies highlighted in red are the hottest in terms of interest, shown in the following table Highest CRM Application Priorities for 2013.

What This Says About the Future of CRM

Mobility is just one part of delivering an excellent customer experience.

  • It is surprising that Gartner clients aren’t looking to create a more unified strategy to customer experience across all channels at all times. As the report states, “The refreshing of an aging agent desktop with a new, more intelligent and unifying user interface has shot to the top of the heat charts once more.” The findings of this Gartner analysis make the highly promoted claims of usability by many CRM vendors look overly hyped.  I think usability is the fastest path to greater system adoption of any CRM system, and that has to include mobile.  It is surprising that a related technology in this area didn’t rise farther in the rankings.
  • Second, mobile sales on smartphones and tablets dominate, followed immediately by Social – Internal Collaboration and Social – Integration with Social Data. What is fascinating about this group of four top items in Sales is the indication that the behavior of how sales teams work individually and together is changing fast. Collaboration is a strong catalyst for Return on Investment (ROI) from social technologies and the sequence of these priorities in Sales underscores that.
  • Third, the vision of the mobile-enabled support representative able to be autonomous yet fully supported to solve customer problems is rapidly approaching.  Of all patterns emerging from this data, this is one shows the greatest profit potential.  Service Lifecycle Management (SLM) and the many forms of service management all have very significant profitability associated with them for manufacturers.  The quicker this area of mobility moves, the faster SLM and Maintenance, Repair and Overhaul (MRO) strategies will grow – giving manufacturers and service providers the ability to mine their installed bases for more profits.
  • Fourth, predictive analytics and big data are reordering how marketing strategies are designed, implemented and managed.  Given the increasing complexity of marketing automation systems and the strategies they support, predictive analytics and big data are starting to dominate the conversations I’ve personally had with Chief Marketing Officers (CMOs) and many demand generation professionals.  I expect the predictive analytics aspects of marketing, combined with big data, to accelerate quickly over the next year.
  • Fifth, the rapid adoption of mobile-based platforms including the Apple iPad in the Configure, Price, Quote (CPQ) continues throughout the professional services, discrete and process manufacturing companies I often visit.  One manufacturer I often work with on their CPQ strategies has the ability today to present a completed 3D model of the proposed product, embed it in a quote and e-mail it to the prospect all from an iPad.  The future of CPQ is going to be dominated by mobility and enterprise support for key order management, pricing and product configuration options.
 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Gartner Predicts CRM Will Be A $36B Market By 2017

CRM in 2017The latest enterprise software forecast from Gartner shows Customer Relationship Management (CRM) increasing to a $36.5B worldwide market by 2017, a significant increase from the $20.6B forecasted in Q1 of this year.  CRM also leads all enterprise software categories in projected growth, showing a 15.1% CAGR from 2012 to 2017, also revised up from 9.7% in the Q1 forecast.

The latest round of forecasts published in the report,  Gartner Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update shows CRM eclipsing ERP in worldwide market size in 2017.  The following graph compares the relative growth of CRM, ERP, Business Intelligence (BI), Supply Chain Management and Web Conferencing, Collaboration/Social Software Suites.  Source: Gartner Forecast: Enterprise Software Markets, Worldwide, 2012-2017, 2Q13 Update.  Please click on the image to increase its size for easier reading.

Figure 1 Forecast

Key Take-Aways

Figure 2 Forecast

  • Worldwide enterprise software spending is projected to be $304B in 2013 in the latest forecast, up from $279B in the Q1 forecast. Gartner claims stronger demand for CRM, supply chain management and security are leading to accelerating market growth.
  • ERP spending worldwide is projected to grow from $26.03B in 2013 to $34.3B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 7%.
  • Business Intelligence (BI) worldwide is projected to grow from $14B in 2013 to $18.6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 7.3%.
  • Supply Chain Management (SCM) worldwide is projected to grow from $9.16B in 2013 to $13.6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of 10.4%.
  • Data Integration Tools and Data Quality Tools worldwide are projected to grow from $4B in 2013 to $6B in 2017, attaining a CAGR in the forecast period 2012 – 2017 of  10.3%.

 Bottom Line:  Gartner’s latest forecasts show that enterprises are realizing the most valuable assets they have are solid, long-term customer relationships.  Trust really is the new currency, as my friend Michael Krigsman often says.

2013 CRM Market Share Update: 40% Of CRM Systems Sold Are SaaS-Based

CRM-Market-Share-Analysis-Image-2012Last year, four out of every ten CRM systems sold were SaaS-based, and the trend is accelerating.

In the recent Gartner report  Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012 published April 18, 2013 the authors provide insights into why the worldwide CRM market experienced 12% growth in 2012, three times the average of all enterprise software categories.  Gartner cites demand they are seeing from their enterprise clients for CRM systems that can help acquire customers, analyze and act on customer behaviors, and increase all-channel management performance.  Big data inquiries are also increasing in CRM, driven by the interest enterprise clients have in getting more value from social network data and interactions.

Key take-aways from the report include the following:

  • The CRM worldwide market grew from $16B to $18B attaining a 12.5% growth rate from 2011 to 2012.
  • 80% of all CRM software in 2012 was sold in North America and Western Europe.    North America CRM sales grew 16.6% from 2011 to 2012.  The highest growth regions of CRM sales between 2011 to 2012 included Greater China (26.9%) and Latin America (24.3%).
  • Salesforce.com is the world’s leading CRM software vendor with 14% market share in 2012 ($2.5B in sales), surpassing SAP (12.9%, $2.3B in sales), Oracle (11.1%, 2.01B in sales), Microsoft (6.3%, $1.1B in sales), IBM (3.6%, $649M in sales) and all others.  The top ten vendors worldwide generated $10.9B in sales alone in 2012.

Figure-1-Market-Share-CRM

  • Worldwide CRM software spending by subsegment shows Customer Service and Support leading all categories with 36.8% of all spending in 2012 ($6.6B), followed by CRM Sales (26.3%, $4.7B), Marketing (includes marketing automation) (20%, $3.6B) and e-commerce (16.9%, $3B).   The following chart shows the distribution of revenue by category:

CRM-Software-Subsegments

  • 40% of all CRM software sold in 2012 worldwide was SaaS-based.  Gartner states that they are seeing their enterprise clients seek out easier-to-deploy CRM systems compared to on-premise alternatives.  The report states that many enterprises are now replacing their legacy systems with SaaS-based CRM systems as well.  Enterprise clients also report that SaaS-based CRM systems are delivering net-new applications that deliver complementary functionality not possible with legacy and previous-generation CRM platforms.
  • Ten fastest growing CRM vendors as measured in revenue Annual Growth Rate (AGR) in 2012 include Zoho (81.2%), Hybris (78.6%), Teradata (70.4%), Bazaarvoice (56.2%), Marketo (54.3%), Kana (44.2%), Demandware (43.9%), IBM (39.4%), Technology One (37.1%) and Neolane (36%).
  • Communications, media and IT services were the biggest spenders on CRM in 2012 due to their call center requirements.  Manufacturing including Consumer Packaged Goods (CPG) was second, and banking & securities were third.

21 Most Admired Companies Making IT A Competitive Advantage

time-and-IT-competitive-advantage1-300x215All enterprises, regardless of what they produce or the services they deliver, are really information businesses.

The accuracy, speed and precision of IT systems means the difference between winning or losing customers, keeping supply chains profitable, and solidly translating new concepts into revenue-producing products and services.  The world’s best-run services businesses have customer-driven IT as part of their DNA; it is very much who these companies are internally.

In the recently published Garter report CEO and Senior Executive Survey 2013: 21 Top Companies Admired for Competitive IT  completed between October and December, 2012, which was part of the 2013 CEO and Senior Business Executive Survey, C-level respondents were asked to name the companies they most admired in terms of their ability to apply IT-related business capabilities for competitive advantage.   Respondents were also asked to limit their responses only to their own and related industries.

391 respondents participated in the survey with 147 being CEOs, 149, CFOs; 49, COOs; and 46 being board members including Chairman of the board and president.  Geographic distribution included 152 respondents from North America; 124 from Europe; 78 from Asia/Pacific; 20 from Brazil; 12 from South Africa; and 5 from the Middle East with minimum company size being $250M in annual sales or above.

The following is the list of the world’s most admired companies using IT for competitive advantage.

Most Admired Companies Making IT A Competitive Advantage

Accenture
Amazon
Apple
Cleveland Clinic
General Electric
Goldman Sachs
Google
Hospital Corporation of America
IBM
Intermountain Healthcare
JP Morgan Chase
Kaiser Permanente
Mayo Clinic
Microsoft
Nestle
Proctor & Gamble
Progressive Insurance
Schlumberger
Target
Toyota
Wells Fargo

Key Take-Aways

  • Customer-driven IT is the single most admired trait of all 21 companies in the list.  Associated with this attribute is the proven ability of these enterprises to manage complex e-commerce systems & platforms, support multichannel management, in addition to continually show the ability to innovate quickly.
  • Enterprises need to consider how the business successes their investments in  IT are enabling can be used for branding and recruitment.   Providing benchmark performance data and stories of how IT helped create entirely new markets and solve customer problems needs to be used for recruiting.  Many of the 21 companies mentioned are doing this, using success stories as a catalyst for driving recruitment efforts for analytics, cloud computing and systems integration experts.
  • Don’t underestimate the disruptive power of cloud computing and mobility to completely re-order enterprise systems quickly.  Gartner mentions that there are enterprises whose IT organizations would have made the list had they not slowed down.  While not directly stated, Gartner warns IT departments to not become complacent over time.  From personal experience working in IT departments however, it is clear that complacency is a leading career hazard.  It’s imperative for CIOs to keep challenging their organizations to stay intensely focused on new developments, seeking out how they can be used to strengthen business strategies.
  • Four of the top five factors that most impressed respondents about the admired companies are customer-related.  Customer-facing IT (15%); followed by an integrated/standardized/unified IT organization and process framework (13%); exceptional use of CRM (11%); customer-centered innovation (9%);  and product design & offerings (9%) are the most mentioned attributes of the highest-performing companies. Multiple responses were allowed to this area of the survey.  The following graphic provides an analysis of which factors most impressed the C-level executives who were respondents to the survey.

What Impressed Business Leaders Most

Roundup of CRM Forecasts and Market Estimates, 2012

CShowing signs of growth through 2013 and beyond, the latest round of CRM forecasts illustrate how quickly behavioral and predictive analytics, greater usability, integration with social media and mobility are transforming this market.

Even with the most usable, easily learned CRM systems, enterprises at times struggle with adoption rates however.  That problem has venture capitalists very interested in finding the next Salesforce.com, which a few have told me will look more like Facebook than a traditional CRM application.

Facebook’s future is going to be defined by how well they manage their migration to mobility, and the same holds true for CRM.  Today there are 110 CRM applications in the Apple App Store and 47 in the Android App Store.  Gartner predicts an exceptional growth rate of 500% by 2014 for mobile CRM.  For CRM vendors to get there from here, they need to make usability and streamlined user experience a high priority.

Key take-aways from the latest CRM forecasts and market estimates are provided below:

  • According to Gartner, Salesforce.com’s worldwide CRM market share was 16.7% in 2011, second only to SAP.  Gartner is predicting Salesforce.com will be the leading CRM vendor worldwide by 2013.
  • SAP continues to be the worldwide leader in CRM software sales, with Salesforce.com ascending to second place according to the latest available data. Oracle was displaced by Salesforce.com in 2011, a trend Gartner and independent analysts have predicted will accelerate through 2013.  The latest market share analysis of the CRM worldwide market is shown below from the latest available report on market share.  Source: Predicts 2013: CRM Goes More Cloud, Becomes an App, Has a New Leader and Changes Name.  The following table provides the most recent CRM worldwide market share analysis from Gartner.

Table A Market Share Analysis

  • The role of CMOs relative to CIOs are changing with respect to who is responsible for defining the needs of an enterprise in the areas of CRM, pricing and channel management strategies.  Gartner did a survey on this earlier in the year and found that 72% of the companies have a Chief Marketing Technologist, growing to 87% by 2014.  A slide showing how the differences in marketing-led versus IT-led is shown below.  You can download the entire slide deck from this location for no charge:  High-Tech Tuesday Webinar:  Profile of Marketing as a Technology Buyer.

responsibility in buying cycle for CRM

  • The much-hyped area of social CRM will attain $1B in worldwide sales by the end of 2012, achieving 8% of all CRM spending this year, as Gartner has predicted often this year.  Gartner sees the revenue breakout of this market as follows: Bazaarvoice generating $130M; Salesforce (BuddyMedia, Radian6, Chatter, Jigsaw), $120M; Oracle (Vitrue, Collective Intellect, RightNow and Involver), approximately $45M; Lithium, $45M; Jive, $40M and the revenues of approximately 250 smaller vendors with revenues of less than $2M in 2012 comprising the remainder of the market size. Predicts 2013: CRM Goes More Cloud, Becomes an App, Has a New Leader and Changes Name.
  • Gartner, Forrester and IDC have predicted that cloud adoption rates by CRM subcategory will vary through 2016.  All agree Sales applications will see the majority of net new sales on the SaaS platform.  Of these research firms, Gartner has the most aggressive forecast of CRM SaaS adoption, projecting 50% of all CRM applications will be Web-based by 2016.  Gartner is also predicting 95% of Web analytics applications will be delivered via the Web by 2016, an uplift from the 40% of sales applications delivered via the cloud today.  Source: Market Trends: SaaS’s Varied Levels of Cannibalization to On-Premises Applications
  • 30% of sales organizations will issue iPads and tablets as the primary device standard issue for salespeople by 2014. From a personal computing device standpoint, tablets will be the fastest-growing segment, with average annual spending growth of 25% through 2016.  Despite this rapid growth, Gartner predicts that by 2015, only 20% of organizations will have launched dedicated mobile applications for customer service use however.  Source: Gartner CRM Vendor Guide, 2013.
  • Gartner predicts that by 2014, public social media networks will be in use by 80% of sales professionals with only 2% adoption rate of social CRM applications in the same time period. Source: Predicts 2013: CRM Sales.
  • Marketing automation will lead CRM application segment growth with a 10.7% compound annual growth (CAGR) through 2016, reaching a total market value of $4.6B.  Sales will continue to be the majority of CRM software revenue reaching $7.9B in 2016.  The following table provides an overview of the CRM Worldwide Software Revenue Forecast from 2009 to 2016.  Source: Gartner CRM Vendor Guide, 2013.

CRM Software Revenue Forecast

  • Throughout 2013, Microsoft will quickly integrate Yammer throughout the entire Office Suite and demonstrate the value of using social graph databases to increase collaboration.  Many have questioned the decision by Microsoft to spend $1.2B for Yammer.  To see the full value of the acquisition, it’s necessary to get beyond SharePoint and look at the architectural elements of Office itself.  Like Facebook, Yammer relies on a social graph database.  For Microsoft, this architectural approach means they will move very quickly to the cloud in 2013, and also be forced to modify the Office architecture as well.  You can find a presentation from 2011 Yammer produced on their integration strategies at this link:  System of Engagement: Yammer Announces Activity Stream API, Open Graph for Enterprise and Yammer Embed

Social infrastructure services

Source: Microsoft’s Changing Social Software Strategy: Yammer, SharePoint and the Role of Cloud Services Within Office

  •  CRM projects lead by consultants and system integrators (SIs) were completed the majority of time for Oracle installations (26%) down from 35% in 2009.  11% of CRM projects completed by consultants and SIs were based on the SAP CRM application suite with 9% based on Microsoft Dynamics CRM.  Salesforce.com has continued to rise in this area, with 16% of all projects completed in 2012, up from 10% during 2009.  The most common projects were customer service and support at 82%; sales, 74%; customer data, 73%; and marketing, 44%.  Projects ranged in size from $500K to over $10M.  The following graphic shows the percentage of projects by large external service providers by year.

percentage of projects by large external service provider

Source: CRM Applications Deployed by Consultancies in 2012 Show Which Skills Are Prevalent

SaaS Adoption Accelerates, Goes Global in the Enterprise

In working with manufacturers and financial services firms over the last year, one point is becoming very clear: SaaS is gaining trust as a solid alternative for global deployments across the enterprise.  And this trend has been accelerating in the last six months.  One case in point is a 4,000 seat SaaS CRM deployment going live in Australia, Europe, and the U.S. by December of this year.

What’s noteworthy about this shift is that just eighteen months ago an Australian-based manufacturer was only considering SaaS for on-premises enhancement of their CRM system.  What changed?  The European and U.S. distribution and sales offices were on nearly 40 different CRM, quoting, proposal and pricing systems.  It was nearly impossible to track global opportunities.

Meanwhile business was booming in Australia and there were up-sell and cross-sell opportunities being missed in the U.S. and European-based headquarters of their prospects. The manufacturer  chose to move to a global SaaS CRM solution quickly.  Uniting all three divisions with a global sales strategy forced the consolidation of 40 different quoting, pricing and CRM systems in the U.S. alone.  What they lost in complexity they are looking to pick up in global customer sales.

Measuring Where SaaS Is Cannibalizing On-Premise Enterprise Applications

Gartner’s Market Trends: SaaS’s Varied Levels of Cannibalization to On-Premises Applications published: 29 October 2012 breaks out the percent of SaaS revenue for ten different enterprise application categories.  The greener the color the greater the adoption.  As was seen with the Australian manufacturer, CRM continues dominate this trend of SaaS cannibalizing on-premise enterprise applications.

Additional take-aways from this report include the following:

  • Perceived lower Total Cost of Ownership (TCO) continues to be the dominant reason enterprises are considering SaaS adoption, with 50% of respondents in 2012 mentioning this as the primary factor in their decision.
  • CRM is leading all other enterprise application areas in net new deployments according to the Gartner study, with the majority of on-premise replacements being in North America and Europe.
  • Gartner projects that by 2016 more than 50% of CRM software revenue will be delivered by SaaS.  As of 2011, 35% of CRM software was delivered on the SaaS platform.  Gartner expects to see SaaS-based CRM grow at three time the rate of on-premise applications.
  • 95% of Web analytics functions are delivered via the SaaS model  whereas only 40% of sales use cloud today according to the findings of this study.
  • The highest adoption rates of SaaS-based applications include sales, customer service, social CRM and marketing automation.
  • SaaS-based ERP will continued to be a small percentage of the total market, attaining 10% cannibalization by 2012.  Forrester has consistently said this is 13%, growing to 16% by 2015.
  • Office suites and digital content creation (DCC) will attain compound annual growth rates (CAGR) of 40.7% and a 32.2% respectively from 2011 through 2016. Gartner is making the assumption consumers and small businesses will continue be the major forces for Web-based office suites through 2013.
  • The four reasons why companies don’t choose SaaS include uncertainty if it is the right deployment option (36%), satisfaction with existing on-premise applications (30%), no further requirements (33%) and locked into their current solution with expensive contractual requirements (14%).

Bottom Line: Enterprises and their need to compete with greater accuracy and speed are driving the cannibalization of on-premise applications faster than many anticipated; enterprise software vendors need to step up and get in front of this if they are going to retain their greatest sources of revenue.

Source:  Market Trends: SaaS’s Varied Levels of Cannibalization to On-Premises Applications Published: 29 October 2012 written by Chad Eschinger, Joanne M. Correia, Yanna Dharmasthira, Tom Eid, Chris Pang, Dan Sommer, Hai Hong Swinehart and Laurie F. Wurster

Using Search Analytics To See Into Gartner’s $232B Big Data Forecast

By combining search analytics and the latest Gartner forecast on big data published last week, it’s possible to get a glimpse into this areas’ highest growth industry sectors.  Big data is consistently a leading search term on Gartner.com, which is the basis of the twelve months of data used for the analysis.

In addition, data from Gartner’s latest report, Big Data Drives Rapid Changes in Infrastructure and $232 Billion in IT Spending Through 2016 by Mark A. Beyer, John-David Lovelock, Dan Sommer, and Merv Adrian is also used.  These authors have done a great job of explaining how big data is rapidly emerging as a market force, not just a single market unto itself.  This distinction pervades their analysis and the following table showing Total IT Spending Driven by Big Data reflects the composite market approach.  Use cases from enterprise software spending, storage management, IT services, social media and search forecasts are the basis of the Enterprise Software Spending for Specified Sub-Markets Forecast.  Social Media Analytics are the basis of the Social Media Revenue Worldwide forecast.

Additional Take-Aways

  • Enterprise software spending for specified sub-markets will attain a 16.65% compound annual growth rate (CAGR) in revenue from 2011 to 2016.
  • Attaining a 96.77% CAGR from 2011 through 2016, Social Media Revenue Is one of the primary use case catalysts of this latest forecast.
  • Big Data IT Services Spending will attain a 10.20% CAGR from 2011 to 2016.
  • $29B will be spent on big data throughout 2012 by IT departments.  Of this figure, $5.5B will be for software sales and the balance for IT services.
  • Gartner is projecting a 45% per year average growth rate for social media, social network analysis and content analysis from 2011 to 2016.
  • Gartner projects a 20 times ratio of IT Services to Software in the short term, dropping as this market matures and more expertise is available.
  • By 2020, big data functionality will be part of the baseline of enterprise software, with enterprise vendors enhancing the value of their applications with it.
  • Organizations are already replacing early implementations of big data solutions – and Gartner is projecting this will continue through 2020.
  • By 2016 spending on Application Infrastructure and Middleware becomes one of the most dominant for big data in Enterprise Software-Specified Sub Markets.

  • $232B is projected to be sold in total across all categories in the forecast from 2011 to 2016. From $24.4B in 2011 to $43.7B in 2016, this presents a 12.42% CAGR in total market growth.

Search Analytics and Big Data

Big data is continually one of the top terms search on Gartner.com, and over the last twelve months, this trend has accelerated.  The following time series graph shows the weekly number of inquiries Gartner clients have made, with the red line being the logarithmic trend.

Banking (25%), Services (15%) and Manufacturing (15%) are the three most active industries in making inquiries about big data to Gartner over the last twelve months.  The majority of these are large organizations (63%) located in North America (59%) and Europe (19%).

What unifies all of these industries from a big data standpoint is how critical the stability of their customer relationships are to their business models.  Banks have become famous for bad service and according to the American Customer Satisfaction Index (ACSI) have shown anemic growth in customer satisfaction in the latest period measured, 2010 to 2011.  The potential for using big data to becoming more attuned to customer expectations and deliver more effective customer experiences in this and all services industries shows great upside.

Bottom line: Companies struggling with flat or dropping rankings on the ACSI need to consider big data strategies based on structured and unstructured customer data.  In adopting this strategy the potential exists to drastically improve customer satisfaction, loyalty, and ultimately profits.

Roundup of Big Data Forecasts and Market Estimates, 2012

From the best-known companies in enterprise software to start-ups, everyone is jumping on the big data bandwagon.

The potential of big data to bring insights and intelligence into enterprises is a strong motivator, where managers are constantly looking for the competitive edge to win in their chosen  markets.  With so much potential to provide enterprises with enhanced analytics, insights and intelligence, it is understandable why this area has such high expectations – and hype – associated with it.

Given the potential big data has to reorder an enterprise and make it more competitive and profitable, it’s understandable why there are so many forecasts and market analyses being done today.  The following is a roundup of the latest big data forecasts and market estimates recently published:

  • As of last month, Gartner had received 12,000 searches over the last twelve months for the term “big data” with the pace increasing.
  • In Hype Cycle for Big Data, 2012, Gartner states that Column-Store DBMS, Cloud Computing, In-Memory Database Management Systems will be the three most transformational technologies in the next five years.  Gartner goes on to predict that Complex Event Processing, Content Analytics, Context-Enriched Services, Hybrid Cloud Computing, Information Capabilities Framework and Telematics round out the technologies the research firm considers transformational.  The Hype Cycle for Big Data is shown below:

  • Predictive modeling is gaining momentum with property and casualty (P&C) companies who are using them to support claims analysis, CRM, risk management, pricing and actuarial workflows, quoting, and underwriting. Web-based quoting systems and pricing optimization strategies are benefiting from investments in predictive modeling as well.   The Priority Matrix for Big Data, 2012 is shown below:

  • Social content is the fastest growing category of new content in the enterprise and will eventually attain 20% market penetration.   Gartner defines social content as unstructured data created, edited and published on corporate blogs, communication and collaboration platforms, in addition to external platforms including Facebook, LinkedIn, Twitter, YouTube and a myriad of others.
  • Gartner reports that 45% as sales management teams identify sales analytics as a priority to help them understand sales performance, market conditions and opportunities.
  • Over 80% of Web Analytics solutions are delivered via Software-as-a-Service (SaaS).  Gartner goes on to estimate that over 90% of the total available market for Web Analytics are already using some form of tools and that Google reported 10 million registrations for Google Analytics alone.  Google also reports 200,000 active users of their free Analytics application.  Gartner also states that the majority of the customers for these systems use two or more Web analytics applications, and less than 50% use the advanced functions including data warehousing, advanced reporting and higher-end customer segmentation features.
  • In the report Market Trends: Big Data Opportunities in Vertical Industries, the following heat map by industry shows that from a volume of data perspective, Banking and Securities, Communications, Media and Services, Government, and Manufacturing and Natural Resources have the greatest potential opportunity for Big Data.

  • Big data: The next frontier for innovation, competition, and productivity is available for download from the McKinsey Global Institute for free.  This is 156 page document authored by McKinsey researchers is excellent.  While it was published last year (June, 2011), if you’re following big data, download a copy as much of the research is still relevant.  McKinsey includes extensive analysis of how big data can deliver value in a manufacturing value chains for example, which is shown below:

Gartner Releases Their Hype Cycle for Cloud Computing, 2012

Enterprises are beginning to change their buying behaviors based on the deployment speed, economics and customization that cloud-based technologies provide.  Gartner cautions however that enterprises are far from abandoning their on-premise models and applications entirely for the cloud.

Based on an analysis of the Gartner Hype Cycle for Cloud Computing, 2012, the best results are being attained by enterprises that focus on a very specific strategy and look to cloud-based technologies to accelerate their performance.  Leading with a strategic framework of goals and objectives increases the probability of cloud-based platform success. Those enterprises that look to cloud platforms only for cost reduction miss out on their full potential.

The Hype Cycle for Cloud Computing, 2012 is shown below:

Cloudwashing and Inflated Enterprise Expectations

While the hype surrounding cloud computing may have peaked, cloudwashing continues to cause confusion and inflated expectations with enterprise buyers.  This just slows down sales cycles, when more straightforward selling could lead to more pilots, sales and a potentially larger market. Cloud vendors who have the expertise gained from delivering cloud platforms on time, under budget, with customer references showing results are starting to overtake those that using cloudwashing as part of their selling strategies.

Additional take-aways from the Gartner Hype Cycle for Cloud Computing include the following:

  • Cloud Email is expected to have a 10% adoption rate in enterprises by 2014, down from the 20% Gartner had forecasted in previous Hype Cycles.  This represents modest growth as the adoption rate of this category had been between 5 and 6% in 2011.
  • Big Data will deliver transformational benefits to enterprises within 2 to 5 years, and by 2015 will enable enterprises adopting this technology to outperform competitors by 20% in every available financial metric.  Gartner defines Big Data as including large volumes processed in streams, in addition to batch.  Integral to Big Data is an extensible services framework that can deploy processing to the data or bring data to the process workflow itself. Gartner also includes more than one asset type of data in their definition, including structured and unstructured content.  The Priority Matrix for Cloud Computing, 2012 is shown below:

  • Master Data Management (MDM) Solutions in the Cloud and Hybrid IT are included in this hype cycle for the first time in 2012.  Gartner reports that MDM Solutions in the Cloud is getting additional interest from Enterprise buyers as part of a continual upward trend of interest in MDM overall.  Dominant vendors in this emerging area include Cognizant, Data Scout, IBM, Informatica, Oracle and Orchestra Networks, are among those with MDM-in-the-cloud solutions.
  • PaaS continues to be one of the most misunderstood aspects of cloud platforms.  The widening gap between enterprise expectations and experiences is most prevalent in this market.  Gartner claims this is attributable to the relatively narrow middleware functions delivered and the consolidation fo vendors and service providers in this market.
  • By 2014 the Personal Cloud will have replaced the personal computer as the center of user’s digital lives.
  • Private Cloud Computing is among the highest interest areas across all cloud computing according to Gartner, with 75% of respondents in Gartner polls saying they plan to pursue a strategy in this area by 2014.  Pilot and production deployments are in process across many different enterprises today, with one of the major goals being the evaluation of virtualization-driven value and benefits.
  • SaaS is rapidly gaining adoption in enterprises, leading Gartner to forecast more than 50% of enterprises will have some form of SaaS-based application strategy by 2015.  Factors driving this adoption are the high priority enterprises are putting on customer relationships, gaining greater insights through analytics, overcoming IT- and capital budget-based limitations, and aligning IT more efficiently to strategic goals.
  • More than 50% of all virtualization workloads are based on the x86 architecture. This is expected to increase to 75% by 2015.  Gartner reports this is a disruptive innovation which is changing the relationship between IT and enterprise where service levels and usage can be tracked.

Bottom line: Gartner’s latest Hype Cycle for Cloud Computing  shows that when cloud-based platforms are aligned with well-defined strategic initiatives and line-of-business objectives, they deliver valuable contributions to an enterprise.  It also shows how Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) are the catalysts of long-term market growth.  The following slide from the presentation  High-Tech Tuesday Webinar: Gartner Worldwide IT Spending Forecast, 2Q12 Update: Cloud Is the Silver Lining (free for download) also makes this point.

What’s Hot in CRM Applications, 2012

Serving the sales force is a mantra and mindset that resonates through the best companies I’ve ever worked with and for.

That priority alone can help galvanize companies who are adrift in multiple, conflicting agendas, strategies and projects.  Uniting around that goal – serving sales and getting them what they need to excel – can turn around even the most downtrodden companies.  And size doesn’t matter, the intensity of focus and commitment to excel  do.

That’s why the latest report from Gartner’s Ed Thompson, What’s “Hot” in CRM Application 2012, published last Thursday resonates with me.  He’s talking about how sales strategies need to be propelled by rapid advances in mobile technology, social CRM, sales content and collaboration, and clienteling to serve the sales force more thoroughly than ever before.  His assessment of what’s hot in CRM is a great foundation for getting behind the mantra of serving the sales force and engraining it into a corporate culture while getting full value from the latest technologies.

Here are the key take-aways from the report:

  • Software-as-a-Service (SaaS) delivery of CRM applications represented 34% of worldwide CRM application spending in 2011.  More than 50% of all Sales Force Automation (SFA) spending is on the SaaS platform.  Gartner clients who are successfully running SaaS are now looking at how to get value from Platform-as-a-Service (PaaS) in the context of selling strategies.
  • CRM spending grew 13% in 2011, fueled analytical, operational and social CRM growth.  Operational CRM represents 80% of all CRM spending and grew 10% in 2011.
  • Analytical CRM, in which Gartner includes predictive analytics and market segmentation analysis, grew a solid 10% in 2011 and is having a very strong year with inquiry traffic.
  • Social CRM grew 30% in 2011 in revenue terms and is 7% of total CRM spending globally as of 2011.   90% of Social CRM spending is originating in Business-to-Consumer (B2C) organizations with the remaining occurring in B2B.
  • Gartner is projecting that CRM will be one of the top three search terms on Gartner.com throughout calendar 2012 based on the trends and volume of calls they are seeing today.
  • CEOs see CRM as their #1 technology-enabled investment in 2012 according the query calls through April, 2012.
  • CRM is ascending rapidly in the priorities of CIOs in 2012, moving from 18th place to eight place  in the latest Gartner analysis.
  • The following table of Highest CRM Application Priorities, 2012 show what’s trending within Sales, Customer Service, E-Commerce and Marketing inquiries Gartner is receiving from its clients.  Consider these as leading indicators of interest.  Over time these areas will need to solidify for forecasts to be completed.
  • Apple iPads are the great maverick buy of 2012 with thousands being purchased by Sales and Marketing management with the immediate requirement of IT integration to these devices.   IT departments are scrambling on the security issues and lack of polices on BYOD.  In enterprise software, iPads are proving to be highly effective as demo platforms for new SaaS-based applications.  They have become the new sales bag of the 21rst century.
  •  High Tech, Life Sciences and Insurance are the three industries with the greatest levels of iPad adoption as of April 2012.  Gartner is predicting that by the end of 2012, 80% of all sales representatives in the pharmaceutical industry will be using iPads for their daily sales tasks.
  • Social or community customer service is the hottest area of growth for post-sales service with high-tech, media, travel, telecommunications, retail and education-based clients dominating client inquiries.
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