Last month in CRM Software – CRM news review for February 2013


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In summary: ACT and SalesLogix change hands, SugarCRM revenues up 60%,’s positioning looks to be changing, and Forrester incurs Oracle’s wrath….

Two of the big CRM brands were on the move in February, with Sage selling Act and SalesLogix to email marketing company Swiftpage as part of a rationalisation of its product portfolio. Act, founded in 1986 by Pat Sullivan and Mike Muhney, was one of the pioneers of the contact management market, and SalesLogix, also founded by Pat Sullivan following the sales of Act to Symantec, was one of the early movers in the CRM mid-market, that later came to be dominated by and Microsoft CRM.

Sage acquired the two products as part of its $260 million purchase of Interact Commerce in 2001 (SalesLogix having reacquired Act in 1999), and later added what became Sage CRM as part of its acquisition of Accpac in 2004. The products perhaps never sat easily with the rest of Sage’s largely financial product line up, or indeed with each other – SalesLogix and SageCRM serving a similar customer base.

It looks as if Sage will focus its CRM energies on Sage CRM, recently announcing the release of version 7.2 which includes new mobile capabilities and social functionality including integration with social collaboration tool, Yammer.

Sage’s move looks likely to give impetus to all three products, and it will be interesting to see how this impacts the competitive landscape in the SMB market over the next few years.

One company which seems to be making great strides in this area at the moment is SugarCRM, who announced their year-end numbers in February. These included revenue growth up 60% over the previous year and a doubling of subscriber numbers. No specific figures were given so it’s difficult to determine how revenues stack up against their competitors, but if rumours of an impending IPO prove to be true we’ll have some visibility soon.

The two big challenges Sugar faces are, firstly, whether it can build a channel of third party implementers with the experience and gravitas to implement complex systems – which is essential if the company is to succeed in the mid and enterprise markets it aspires to. Sugar recruited 130 new partners in 2012, which looks promising, but the key will be whether it can attract the quality and depth of capability it needs.

The second is its own business model. Much of Sugar’s success has been down to the penetration of its open source version. This freemium approach, while clearly effective, has the added complication when selling subscriptions of its commercial offering, that there’s an ever present competitor in its free community edition. This is not only a potential problem with smaller, price sensitive, opportunities, but also in situations where high user numbers are involved, because customers may feel it’s more cost-effective to develop missing functionality rather than pay for a license. It will be interesting to see if SugarCRM looks to restrict its open source licensing in due course. released their Q4 figures on 28 February, posting revenue of $835 million, and maintaining their metronomic record of 30 odd per cent year on year gains. Salesforce CEO, Marc Benioff, also used the earnings call to spell out their intent to make further acquisitions particularly in the marketing space, with, I suspect, marketing automation and email campaign management applications featuring highly on their shopping list.

The company did make one acquisition in the month, purchasing EntropySoft, a French developer of content integration and migration technology. Terms weren’t revealed and it remains to be seen whether the purchase was for the technology or the team.

Some of the results of Salesforce’s 2012 acquisition of GoInstant were apparent in the February unveiling of Service Cloud Mobile whose co-browsing functionality will allow support agents to guide a customer around an application running on their mobile device. Other capabilities in the release included access to customer communities, mobile chat, and Service Cloud Touch which allows agents mobile access to resolve issues on the go.

February also appeared to provide further evidence that Salesforce is tweaking it’s positioning to down play its previous emphasis on social. Marc Benioff presented the keynote at a customer event at the Waldorf Astoria in New York on the topic of becoming a customer oriented company. The presentation was widely reported, and while there’s danger in reading too much into a one-off event, the customer centred concept certainly looks more concrete and understandable than the rather more ambiguous notion of the social enterprise. And I suspect we will see more emphasis on the basics of sales, service and marketing in the coming months.

Finally, on the Salesforce front, Marc Benioff’s talents for grabbing a headline clearly remain undiminished, using Twitter to inform ex-Yammer employees, laid off in a recent round of redundancies following the company’s 2012 acquisition by Microsoft, that Salesforce is hiring and inviting them to send him their CV’s.

Any suggestions that the redundancies were indicative that Yammer was in any way misfiring seemed to be quickly dispelled with the announcement later in the month that the company had tripled its sales in 2012, and quadrupled them in the fourth quarter, increasing its user base to 7 million.

Microsoft also announced in February the availability of improved integration with Yammer for Dynamics CRM Online. The CRM application will also now work on the iPad (though not mini) through the Safari browser. It looks as though these, and other features rolled out to online users as part of Microsoft’s December update, are likely to be available to on-premise users later in the year as part of the Orion release.

In other news, Forrester drew the wrath of Oracle by issuing a report that suggested 65% of customers had no plans to migrate to Oracle’s new generation of Fusion applications. Oracle issued a stinging three page rebuttal which amongst a range of points criticised the recency of the survey, sample size, and suggested a skewing of the questions to the negative.

Finally, in a move that sure to interest third party maintenance provider Rimini Street, SAP announced that it would be increasing the rate for new maintenance contracts signed after July 15 from 18 to 19%.

Anyway, that concludes my take on the news for February 2013. If I’ve missed or misunderstood anything significant please feel free to comment!

Republished with author's permission from original post.


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