CRM - January 2009 - (Page 16)

CRM TRENDS AND NEWS ANALYSIS C worth asking: Is there a price war going on in SaaS CRM? “I think there is a good prospect of that happening,” says Jeffrey Kaplan, managing director of SaaS consultancy ThinkStrategies. The success of the SaaS model has led to an increasingly crowded marketplace. Some of them are large vendors with the resources to play with price. “Companies like Microsoft will try to undercut the market; NetSuite recently tried to do that.” Jim Steele, Salesforce.com’s chief customer officer and president of international operations, seems unfazed. “When I joined [this company], we were competing against Siebel [Systems], SAP, and other traditional software vendors—we were the lowA turbulent economy is driving some on-demand vendors to reduce fees. cost alternative,” he says. “That Is a price war looming in software-as-a-service? was back in 2001, before the ommon wisdom in this in- Salesforce.com. Entellium, a hybrid Internet bubble burst, before 9/11—those dustry tells us that CRM and vendor of both installed and SaaS events came along and changed people’s related technologies are a applications, collapsed amid falsified outlook, like today. Customers are very must-have, with price a de- revenue figures—thanks in part to a sensitive to cost and value.” Even so, Salesforce.com—now one of cidedly secondary concern compared to bottom-dollar price structure—and functionality. Yet when software-as-a- finally filed for bankruptcy in early the higher-priced SaaS vendors—seems service (SaaS) became a viable means of December. (See “The Rave Is Over,” content to let its competitors bloody each other over pricing. Steele delivering CRM, one of the selling Insight, December 2008.) notes that, at the company’s A handful of open-source “There’s a lot of points of that business model was its third-quarter earnings call, reduced cost versus traditional soft- CRM providers have also markup for Marc Benioff, the company’s ware. It was the birth of a generaliza- started pitching SaaS users, [Salesforce.com]. cofounder, chairman, and focusing in part on price bention: Any SaaS will save you money. Yet even in light of that generaliza- efits. Concursive (formerly We’re due for some chief executive officer, made clear his intention to hold the tion, there has been activity on the known as Centric CRM) price pressure.” line on pricing. “Price is one SaaS-pricing front. When Microsoft upped the ante by offering Dynamics CRM Online launched in one year of free service for up to 100 of the criteria, not the most compelling,” early 2008, its monthly cost per user users, and promising future charges at Steele says. “Versus other SaaS vendors, undercut every major player in the in- “half of the rates of competing on- we talk about our track record, our partner ecosystem, and our customers. We dustry. By the end of the year, Net- demand CRM offerings.” With the array of competitive mar- get a premium because of those factors.” Suite had announced two other major While Salesforce.com, like most comdiscounting initiatives, in targeted keting pitches on the table, not to menefforts to lure users of SAP R/3 and tion the global economic nosedive, it’s panies in any industry, is willing to make The Shots Heard ’Round the World 16 CUSTOMER RELATIONSHIP MANAGEMENT | JANUARY 2009 www.destinationCRM.com http://www.Salesforce.com http://www.Salesforce.com http://www.Salesforce.com http://www.nxtbook.com/nxtbooks/crmmedia/crm1208/index.php?startid=16 http://www.nxtbook.com/nxtbooks/crmmedia/crm1208/index.php?startid=16 http://www.Salesforce.com http://www.Salesforce.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - January 2009

CRM - January 2009 Contents Front Office Feedback Reality Check Customer Centricity The Tipping Point The Shots Heard ’Round the World 30,000-Foot Views Of the Cloud Stuffing the Ballot Box— With Complaints The Marketing Line for ’09 CRM on Twitter Technology Helps Insurance Weather the Storm Required Reading The Google-ization of CRM The Feedback Funnel Email: What’s Inside? Shake Your Moneymakers Lead Sweet Lead Incentives at the Speed of Lightpath Sales Contentment for Content Management A Worthwhile Excursion Into Call Recording Secret of My Success Re:Tooling Connect Pint of View

CRM - January 2009

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