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Spring Renewal

Spring Renewal

There was an unmistakable sense of renewal in CRM last month. Marketo bought Crowd Factory. Oracle showed off progress on all fronts. SugarCRM raised the bar, and Salesforce let fly with a new cloud initiative. Last but not least, of course, CRM Idol kicked off its second go-round, giving new companies a chance to shine.

By Denis Pombriant CRM Buyer ECT News Network
05/02/12 5:00 AM PT

I read Chaucer's Canterbury Tales in college (yes, in Middle English and no, it wasn't that long ago), and now every April brings me back to the opening verses about springtime and renewal. This April was especially memorable in our industry, and as the month has just passed I wanted to take a moment to discuss some of the things I witnessed.

Mostly, for me, there was an unmistakable sense of renewal in CRM and in the tech sector more generally. Facebook continued to primp for its assumed-to-be-historic IPO and bought Instagram, a company with an application for mobile devices and not much more than a website otherwise. Facebook paid a billion bucks for Instagram, no doubt a sign of the future. Marketo, heading for its own IPO at some point, bought Crowd Factory, combining marketing solutions into a suite that will offer modern and ultra-modern marketing.

Pressing Onward

Thankfully, there was more innovation than just the M&A variety. I went to a couple of analyst briefing sessions that were interesting for different reasons, and I will have to assume that the events I couldn't fit in were much the same. Oracle held a deep briefing to show off progress on all fronts. The event made me a believer that they have a plan or plans that merge into a powerful vision of engineered systems and software that meets some of the challenges of the social/mobile/analytic/big data world we're moving into at light speed.

SugarCRM raised the bar and showed the world that it is growing rapidly and that its open source approach to business is very much in the mainstream along with operating system, server and database open source projects that support, in one way or another, the innovations in the rest of the industry. It looks to me like Sugar is becoming the go-to CRM that everyone has to include on the shopping list. Open source might not be for everybody, but then again Sugar's growth numbers and recent capital round indicate they just might be.

Salesforce announced its Government Cloud in an effort to capture some of the new business likely to come out of local, state and federal initiatives to cut IT costs and improve constituent service. When government becomes an adopter of a new technology like cloud computing, it's safe to say that it's not a radical departure anymore.

But that doesn't mean we stop innovating. As the Salesforce announcement made clear, the big issue for government will be security and, I would add, up time. So I look for a new era of innovation around both security and fault tolerance as cloud computing works to measure up to a nine-nines reliability standard found in other utilities.

CRM Idol Returns

Finally, sneaking in just under the wire, on April 30, Paul Greenberg announced the second season of CRM Idol, the competition that seeks to discover hot emerging companies with great technology ideas in our space. Full disclosure, I am Paul's friend, but that category includes about half the world. Last year, Idol's first, was a great learning experiment. As one of the founding primary judges (others in the U.S. are Brent Leary, Esteban Kolsky, Jesus Hoyos), I was present for all of it, and I can say we learned a lot.

We got a stellar crop of finalists last year (both in the U.S. and Europe) including Crowd Factory, Stone Cobra, Assistly and Get Satisfaction, which won the contest. Two of the four were bought -- Assistly mid-way through the competition and Crowd Factory last month.

We are expecting big things from this year's group of contestants too. The announcement by Greenberg on Monday is the opening of the season and companies interested in participating should visit the Idol website for details. There are a few rules that make this a real competition among emerging companies -- you can't be too old or too rich, for example -- so check it out.

Being a software entrepreneur is not easy. While you might think that venture funding has eased many of the burdens, raising capital is not easy, though it can be insightful. VCs look not just for new companies or new solutions, but new categories. And what looked hot last year may no longer be attractive. They're always looking for something that has never been seen before that nonetheless sparks interest and fills a need. CRM Idol is like that. The companies that do best are those that don't conform to a pattern but instead break new ground.

If you pay attention to Idol you might get an idea of the future of CRM and possibly other things. Just looking at the Instagram deal tells me potentially that the hottest new companies might be those writing for the smartphone market. That, of course, would be a significant finding -- the kind of thing that will make future Aprils so interesting.


Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant's research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and website. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at denis.pombriant@beagleresearch.com.


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