Beware Little CRM Tools


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CRM Technology Rule #1

Avoid small CRM software vendors.

When it comes to CRM, 99% of the time, technology doesn’t matter. But here’s when it does matter: You don’t want to be on a rinky-dink little CRM platform and have it go out of business or get bought, choose a beloved, large-scale CRM platform only to see it go to seed.

Having an entire ecosystem is a big deal. People have learned that lesson the hard way with CRM. Even a $5.85 billion company such as Siebel can be bought, and see its fortunes change. What’s happened since Oracle closed its acquisition of Siebel in 2006? Just one major release. Whereas in the same time frame, put out four releases per year, and added such features as Twitter, Facebook and Microsoft Outlook integration.

Cross The CRM Software Chasm

My “avoid small CRM players” argument has been dinged as a “sales pitch.” But I’d argue that it’s really a reality pitch. (And for the record: Innoveer doesn’t sell or profit from the sale of any CRM software purchase.) In my reading of Geoffrey Moore’s Crossing The Chasm, when a market becomes mature, it collapses to a leader that has about 80% market share and earns probably 90% of the market’s revenue. Meanwhile, every other company is fighting for the 10% of revenues left over.

With the market-leader’s dominance comes a related, platform effect, meaning that the market leader naturally attracts and fosters a large ecosystem of third-party experts, who make possible and reinforce the vendor’s success.

Numbers also tell the story. How much does a company spend on CRM software R&D? For, with 6,000 employees, 2010 spending on R&D was $132 million. Compare that to some of the smaller players, such as SugarCRM, which doesn’t disclose revenues but has 154 employees on LinkedIn, or Sword Ciboodle, which has 109 employees on LinkedIn. Do their revenues even add up to what or Microsoft spends on CRM R&D every month?

Preview CRM Success +5 Years

Picking the non-commoditized option is a sure way to hurt yourself. Now, while Moore’s argument is a great, broad-strokes concept, the CRM market is still evolving. Meaning that when it comes to picking the non-commoditized option, we’ve always recommended that companies look at the top options: Oracle CRM On Demand,, and Microsoft CRM Dynamics. For life sciences, also evaluate Cegedim, and if you’re an SAP shop, by all means investigate using SAP for CRM.

Pick The Gorillas Or Start Job-Hunting

If you’re an IT manager, sales executive, or marketing executive, and you pick a solution that’s not the gorilla in that space, you need to have a really good reason for doing so. Otherwise, you’ll be looking for a new job.

For example, before selecting new CRM software, Innoveer client Aggregate Industries asked Gartner Group which CRM vendors it could take a “long journey” with. In other words:

  • Which software vendors will likely still be in business in a few years?
  • How does their functionality compare?
  • Will they maintain their products for the long term?
  • Do they boast an ecosystem of third-party consultants, vendors, support and maintenance options?

Based on the company’s needs, and Gartner’s assessment, Aggregate produced a short list: Oracle CRM On Demand, and — possibly — Microsoft CRM.

CRM Smackdown Draws Heavy Hitters

Both my analysis of cloud versus on-premise CRM software and smackdown of CRM vendors have drawn complaints from smaller CRM vendors, who ask why I’d recommend just the large players.

Here’s the short answer: If you’re going to buy a CRM product, buy it from a company that’s not just going to be around for a while, but also growing and aggressively innovating. Because outside of the market leaders, except in some very specific situations, the little contenders don’t add up.

Learn More

Which CRM software is best? Read our CRM Smackdown to find out.

But to ensure that your CRM program excels, don’t start with technology. Instead, ensure your CRM program achieves your business goals. To help, review our “top 10” marketing, sales or service steps to see how your program compares to best practices and our benchmarks.

Republished with author's permission from original post.

Adam Honig
Adam is the Co-Founder and CEO of Spiro Technologies. He is a recognized thought-leader in sales process and effectiveness, and has previously co-founded three successful technology companies: Innoveer Solutions, C-Bridge, and Open Environment. He is best known for speaking at various conferences including Dreamforce, for pioneering the 'No Jerks' hiring model, and for flying his drone while traveling the world.


  1. I disagree with this generalisation that in fact says go with the big boys. For the average size company this will increase their expense, complexity and risk and we spend a lot of time moving customers off the big names of Salesforce and Microsoft from what the customer considers expensive let downs!

    Agreed not all small CRM players in the space of 500 or so offerings will survive and diligence is key and there are plenty of independent reference points such as G2Crowd, Gleanster, CRM Idol, etc all of who we are rated highly by as we continue to grow successfully and fast. Customers should simply do appropriate diligence and seek 3rd party validations, but not totally avoid smaller party offerings as you indicated.

    Those that you name are priced out of the market for the majority of smaller and average size organisations that make up 98% of the market. We find many customers who have tried such solutions and found the licensing and consulting needed to configure and maintain them so prohibitive their CRM outcome has been unsuccessful. On your foundation we would all be driving one of three brand of car, using one of three brand of TV etc.

    Freedom of choice is the prerogative of the needs of the customer and whilst I believe 500 CRM options is too many 3 is by fa too few.

    Ian Moyse

  2. Ignore a CRM vendor because it is not the biggest vendor? At least it won’t go out of business? Really? I can think of some banks and car companies that fly in the face of that argument.

    People used to say, “No one ever got fired for buying IBM or Microsoft.” While that may have been true, that decision was rarely the most cost effective or provide the best solution. Many of the competitors to IBM and Microsoft did a great job for their clients while they grew larger. Besides, is that the only criteria for selecting a vendor?

    Of course financial stability is a factor in selecting any vendor. But, that should not be the sole reason for selection. That’s just silly.

    My experience is that the larger the CRM vendor, the less responsive they are to the needs of the SMB market. They need large companies to meet their growth targets. Dealing with companies of less than 500 (let alone less than 100) is more trouble than they are worth to these vendors.

    A business should look at whether the CRM product meets their needs AND if the vendor is a strong financially.

    You want a CRM that will actually make a positive difference in your business. An excellent example is Excellent CRM product, willing to work with a client to make the CRM do what is needed to effect business growth and strong financially. Yes, they have larger clients, and they also have smaller companies.


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