IBM Gloves Up for Public Sector CRM Arena
IBM last week announced its acquisition of Optevia, a Software as a Service systems integrator specializing in Microsoft Dynamics CRM solutions. It will become part of IBM Global Business Services.
Optevia specializes in the public sector market in the UK, where it is based. Its focus is on emergency services, central and local government, health authorities, and housing and social enterprises.
"As a part of our ongoing strategy to establish IBM GBS as a premier global digital consultancy and accelerate GBS leadership in the next generation cloud CRM solutions space, Microsoft solution implementations will increasingly require transformational consulting services based on unique client industry insight," said Peter Rousseau, an associate partner in IBM Global Business Services' UK public sector practice.
"IBM GBS has been successful in this area and needs to continue the expansion of its position with global reach, deep industry expertise and industry-specific assets," he told CRM Buyer. "Optevia's expertise and assets deliver this step change for IBM GBS."
Where IBM Is Taking Optevia
IBM has "a broad portfolio of CRM vendors we partner with and support," Rosseau said. "This will continue."
Notably, it has a strategic alliance with SugarCRM.
Optevia is a systems integrator, and "I see this more as IBM increasing its bench in CRM implementation rather than moving away from Sugar," noted Rebecca Wettemann, VP of research at Nucleus Research.
Optevia's strong reputation in the UK public sector will provide immediate access to "a pool of specialty sales and delivery experts in the rapidly evolving cloud CRM space," Rosseau said. It "will increase the GBS Dynamics practice in Europe."
Further, the acquisition will provide "immediate access differentiating code-based assets that are scalable into the broader Europe and North America regions to help drive increased win rates and accelerated time to value for our clients."
The purchase "gives IBM more bench strength in implementing CRM, particularly in the public sector," Wettemann told CRM Buyer. CRM in government "is a special case, not just in the way it's implemented -- citizens instead of customers -- but [also] in the way it's purchased."
Stretching Could Hurt
Optevia's focus on the UK public sector makes it likely there will be "some challenges in expanding that model beyond Europe with different public sector buying cycles," Wettemann said, "but IBM has government clients all over the world that could be targets for Optevia services."
It may not be a cakewalk for IBM, though, because "this isn't the old days when [it] could show up and dominate," noted Denis Pombriant, principal at Beagle Research. Public sector CRM "is a crowded market."
How IBM Can Make It Work
That said, there's no need to overhaul Optevia's technology for integration, Pombriant observed.
The secret to success will be "building very specific applications that slide in and work. "Government can't handle long delays and cost overruns, so IBM needs to throw fastballs over the plate," he told CRM Buyer.
Scaling shouldn't be a problem, as Optevia offers a SaaS app, "unless [IBM does] something dumb like offering single-tenant hosted services," Pombriant said. "That would be more of a facilities management approach, which would crash and burn."
Impact on Microsoft Dynamics
SugarCRM and Microsoft Dynamics "are competing solutions with different strengths, so it's not inconceivable that Optevia could become part of [IBM's] SugarCRM implementation plan," Nucleus Research's Wettemann surmised.
IBM GBS is a Microsoft Dynamics CRM partner itself, and "I wouldn't see this [purchase] necessarily as bad news for Microsoft, but evidence of the increasing competition in the CRM market and IBM's desire to play a growing role in it," she added.
This is a maturing market, and other companies, like Oracle and Salesforce, have very good solutions, Pombriant pointed out. "Each of them has a better-built-out suite of in-house and partner-developed platform apps for the public sector, so it's going to be a fight."