Industry readies for Microsoft CRM

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Despite the recent spate of CRM activity—in which companies such as E.piphany Inc., Banter Inc., Blue Martini Software Inc. and G2X Inc. have unveiled their latest system refinements and new product entries—there may be a shakeout ahead for providers of customer relationship management systems.

The scheduled fourth-quarter release of Microsoft Corp.’s CRM application, which is targeted at midsize businesses and is based on the company’s .NET programming platform, will likely add to the current jockeying among CRM players.

"Microsoft will eventually move into the CRM space and compete against its [current] software partners," predicted Michael McNerney, group manager, e-business development at Sun Microsystems Inc.

Sun, whose programming platform is based on "open standards," which include Sun, Java and extensible markup language (XML), announced in late August its Sun iForce CRM Network Program. The program is intended to allow CRM providers to work on open standards that promote integrated, Web-based CRM solutions.

Some would argue Sun’s idea is to compete with Microsoft’s soon-to-be-released Web-based CRM products. But McNerney said it’s not an either/or proposition. Sun’s customers mix and match applications, and the network could potentially bring together the fragmented marketplace without "a monolithic software approach," he said.

Systems integration within and across software is a huge issue. "We’re seeing 60% of the CRM budget spent on integration costs," said McNerney, whose clients include AT&T Corp., BellSouth Corp. and Bank of America Corp. He estimates that marketers use 13 different software applications in a typical CRM solution.

In Microsoft’s favor is its track record of simplifying applications for mid-tier users, said Guy Creese, a CRM analyst at Aberdeen Group. "If someone wants to know about CRM on the analytics side, it’s probably easier to learn about CRM from someone like Microsoft than from someone like Siebel." On the other hand, "[Microsoft] also doesn’t have all of the enterprise know-how and capabilities that some of the other software companies do."

Many industry players say CRM software providers are currently ahead of Microsoft in terms of application sophistication, especially since its product hasn’t officially launched. For example, E.piphany’s E.piphany Service 6, released last month, integrates contact center, e-mail and Web customer databases and scripting language for cross-selling. Customers include IBM’s e-business division.

Some companies are aligning their businesses with Microsoft to join forces or at least be compatible with the software giant’s applications.

Banter, a language technology company that automates responses to written communication from customers, integrated .NET into its CRM server platform. Astea International Inc.’s Alliance Enterprise Version 6.0 debuted last month with enhanced mobile, multilingual and CRM capabilities that function within the .NET framework. And Clarus Corp., a b-to-b e-commerce software company, created Clarus Net, a collection of Web services and tools built on .NET.

Still others are carving a niche for themselves by marketing industry-specific Web-based CRM solutions. G2X primarily serves the insurance and immigration services markets with Agility, its system integration application. G2X CEO Greg Rorke said he is not concerned about competing with Microsoft.

"Our cost structure is so low that we don’t think .NET will have any impact on us," he said. "You have to be vertically relevant. If you’re a horizontal application writer, you’re in trouble."

Likewise, Blue Martini Software unveiled Blue Martini 5 for Manufacturers last month. The vertical solution handles marketing, lead management and order tracking and automates processes such as proposal generation.

"We’re announcing the new enhancements in this solution
because manufacturers have been investing in ERP [enterprise resource planning] and supply chain management, but it hasn’t helped them with direct interactions with their b-to-b customers," said Jason Garoutte, senior product manager.

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