Last month in CRM Software – CRM market news review for September 2012

In summary: duelling conferences, the implications of Dreamforce, and guerrilla marketing at Oracle OpenWorld

It’s perhaps counter intuitive that at a time of rising fuel costs, restricted budgets, environmental concerns, and a plethora of technologies designed to make face to face meetings largely unnecessary, that live events and conferences should become one of the key weapons of choice in the battles between the CRM vendors.

In September we saw Salesforce.com’s Dreamforce conference go head to head with Oracle’s OpenWorld event. Both were held in San Francisco, albeit not at the same time. And, in the true chest-thumping spirit of the rivalry between the two vendors, both were clearly striving to be bigger, better, and bolder than the other.

Last year it was pretty much neck and neck between the two with around 45,000 attendees apiece. But last year relations between the two companies were somewhat closer. As the story goes, Marc Benioff, Salesforce.com’s chief executive, was scheduled to give a keynote address at OpenWorld 2011. That speech however was rescheduled at short notice, it’s suggested because of some critical posts following Oracle CEO, Larry Ellison’s opening address, which in turn resulted in Marc Benioff arranging his own impromptu keynote at a local restaurant.

Perhaps unsurprisingly, Marc Benioff recently confirmed he has not been invited to attend OpenWorld 2012, and it would seem that last year’s events may have motivated Salesforce to go bigger than ever (though the potential vulnerability of Oracle’s Siebel base may have had more to do with it), claiming 90,000 registered attendees for this year’s event. Guest presenters included Sir Richard Branson, Jeff Immelt, General Colin Powell, Tony Robbins, and the Red Hot Chili Peppers headlined the entertainment side of things.

With Oracle OpenWorld expecting ‘only’ 50,000 attendees, it’s hard not to be impressed by Salesforce’s stats, particularly bearing in mind the relative sizes of the companies. With revenues of £37 billion, Oracle dwarfs Salesforce as they close in on $3 billion. That said, Salesforce is growing revenues at thirty odd per cent per annum, and Oracle, based on its first quarter figures released in September, was down 2% on the same period last year.

The significance of Dreamforce is less about scale though, and more about the steer it gives as to Salesforce’s future plans. While this is important for its customers and prospects, its impact is felt across the industry as competitors variously respond to the new products and initiatives it unveils.

This year’s new product announcements included Touch, a new mobile interface, initially for the iPad, with Android and iPhone to follow; Social Key which will fill out the business contact data available through its Data.com site with related social profiles; Chatter Communities for partners and service allowing users to create community sites for their products and services; Work.com, a social performance management platform based on its 2011 acquisition of Rypple; Chatterbox, a Dropbox type application for the enterprise; Salesforce Identify, to enable single sign-on for multiple cloud based applications; and Marketing Cloud, which Marc Benioff has identified as their next billion dollar market, and blends together its Radian6 and Buddy Media acquisitions.

Box and Okta were presumably somewhat shocked to discover they had a large, well-funded, highly motivated, new competitor, but overall Dreamforce doesn’t seem to have contained too many major surprises. The key themes seem to be the continued expansion outside the core CRM offering to appeal both to the larger enterprise, but also presumably to offer more cross-sell opportunities to its existing customer base.

Social capabilities continue to be interwoven into an ever expanding range of products. One presumes the social enterprise branding was being played down however, given the decision earlier in the month to abandon its trade mark application following protests from organisations in the social sector (i.e. organisations which support social causes). Given the heavy investment in the term in the last year or so, this must have been a painful decision.

The likelihood though is that the impact of Dreamforce will be felt more keenly over the coming months. If marketing cloud is indeed going to reach its billion dollar potential then it seems likely that Salesforce will need to fill out the offering, and most commentators are expecting them to make further acquisitions in the space with Marketo and Eloqua seemingly the most talked about. It will also be interesting to see how much further Salesforce ventures into the human resources space.

The challenge for Salesforce will be whether they can broaden their product offering and attract enterprise customers, without damaging their appeal to the lower end of the CRM market. SugarCRM, who recently announced their SugarCon 2013 event, which will take place in New York in April next year, and Zoho, who announced a new marketing campaign management application, will be two of several vendors waiting to profit if they fail to pull it off.

Elsewhere, Zendesk, the cloud-based customer services provider, announced $60 million of new financing, which suggests its prospects weren’t too badly dinged by Salesforce.com’s acquisition of Assistly last year.

Finally, Rimini Street, which provides third party maintenance and support for enterprise applications such as Siebel and PeopleSoft, used Oracle OpenWorld as the opportunity for a little guerrilla marketing. Their adverts placed on San Francisco taxis inviting people to tweet using #OOW to win a prize, is likely to further inflame tensions between the two companies whose legal dispute is likely to reach court next year.

I will cover OpenWorld in more detail next month, but that concludes my take on the news for September. If I’ve missed or misunderstood anything significant please feel free to comment!