Looking at 2005 Through the Rearview Mirror: Did I Make You Laugh?


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Ever notice how year-end reviews and a pundit’s previous forward-looking prognostications rarely synch up? Of course not! Analysts and pundits are great at predicting the future but lousy at coming back a year later to review how they did. Well, I’m different. I don’t care if I was wrong last year, as long as I was funny. Here are a few of my prognostications from 2004 and how they look today.

Oracle will try to buy China. Yes, I said it and I’m darn proud of it. They came up short, of course, but they gave it a good try by gobbling up PeopleSoft and coming to terms with Siebel. But now it appears that Oracle has a lot of redundant applications that it needs to knit together or at least continue to support through end of life. Might some of the Oracle shareholders get a little testy in 2006 about all this over-buying? Hmmm.

Government regulation of spyware and other dangerous software will make the Internet more safe, secure and convenient for users. As they say in Brooklyn, forggedaboudit. There was a bill winding its way through Congress that was so watered down, it was drawing camels everywhere it went. As documented by me and others previously (notably Benjamin Edelman), there’s more than $100 million in venture funding in some of the largest companies that make spyware. But don’t expect this administration to take any action against this “new industry”.

Customer loyalty (aka retention) will replace customer satisfaction as the primary driver in vendors’ mindsets and ROI as an indicator of software implementation success will be de-emphasized as vendors focus on growth instead of cost avoidance. Wow! I said that?! I might have been a little early, but these are pretty good if I do say so. Unbeknown to me at the time, Don Peppers and Martha Rogers had a book incubating that was published in May. The title, you might recall, is Return on Customer, and it’s all about ROC replacing ROI as the indicator of success. It also makes a convincing case for installing loyalty and retention, instead of mere satisfaction, in the Holy Grail position in the board room. Who would have thunk it?

The voice of the customer will get louder. Of course, if you want to drive loyalty and all the rest, you need to find better ways of asking customers what they want. This idea made cover stories in magazines like Forbes and BusinessWeek, so I am counting this as another prediction fulfilled.

More established software vendors will bite the bullet and begin to offer hosted solutions. Lots of stuff happening in this direction. Salesforce.com, RightNow, NetSuite, even Siebel and many others are laughing all the way to the bank. SAP intimated it was going to do something and Microsoft is still pooh-poohing the idea, so it must be timely. Hurry up or salesforce.com is going to eat your lunch.

Hosted CRM will see continued growth and diversification. You need to look only as far as salesforce.com’s burgeoning partner ecosystem to know this is true. Add to that SFDC’s introduction of Appforce and ApplicationExchange and you have all the makings of a major disruptive innovation in enterprise software. Fasten your seatbelts in ’06.

Wireless technologies will continue improving and take CRM off the desktop and to the customer. OK, not a homerun, but lots of base hits being made here. Steady growth is good. Also watch for the rise of the IP all-in-one service for phone, Internet, call center services and much more from companies like Five9.

Venture capital and more emerging companies will see a better market. Nope, this dog didn’t hunt well at all. There was an article in the business section of the Boston Globe (my home town paper) the other day that said enterprises didn’t want to buy from start-ups right now and VC’s were putting more of their money into late-stage companies for quicker and more assured returns. Fair enough. That’s the behavior you see at the end of a cycle or the very beginning of a new one. There just aren’t a lot of places where you can park a few million bucks right now, but that’s changing. All you need to do is look at SFDC’s partner ecosystem to see there’s a lot of innovation happening. The thing is, though, that as long as these guys can sell through ApplicationExchange, the need for VC money to build a sales and marketing infrastructure is greatly reduced. There are some assumptions here that can’t be proven yet, but it is certainly possible that we are returning to a time when start-ups can be self-funding.

There, that’s it for now. Let’s do this again in about a year.

Denis Pombriant
Beagle Research Group, LLC
Denis Pombriant is a well-known thought leader in CRM and the founder and managing principal of the Beagle Research Group, LLC, a CRM market research firm and consultancy.


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