Crm Vendor Guide

G00227602

The Concise Social CRM Vendor Guide, 2012
Published: 6 December 2011

Analyst(s): Michael Maoz, Ed Thompson, Adam Sarner, Jenny Sussin

Despite its moving boundaries, there is one absolute about social CRM: It
will be mandatory, not optional, for most organizations. Entering 2012,
Gartner is tracking 106 vendors in the social CRM market, down from 116
in 3Q10. These vendorsare tracked based on their mention in client
inquiries, making the list somewhat concise. Despite the addition of some
new vendors to the list, there were also a number of acquisitions that
winnowed the market, something we expect to be a trend that will intensify
during the next two years. Most recently, there was Oracle's announcement
that it will acquire RightNow for $1.54 billion (see"Oracle to Acquire
RightNow Technologies, Boost Cloud Portfolio"), following salesforce.com's
acquisitions of Radian6 and Assistly.
We anticipate that, by 2014, a social CRM application suite will emerge that
integrates peer-to-peer community capabilities with established CRM
applications to broaden customer participation in business processes.
Social CRM is a business strategy, rather than atechnology. It benefits the
business by fostering engagement, participation and interaction among
customers, prospects and partners. A business benefit is the support of
sales, marketing and customer service processes. Stakeholders should use
this research to cut through the confusion and to select a shortlist of
vendors best-suited to realize their organizations' social CRM potential.

KeyFindings
■

The third wave of social CRM vendor consolidation, in which business software vendors and
outsourcers seek capabilities through acquisition, will accelerate. Mergers and acquisitions
(M&As), new entries, and exits of software vendors are and will remain common, and we expect
rapid consolidation and simplification of the market to continue.

■

Spending by buyers has increasedsubstantially, with many vendors growing revenue by 50%
to 100% in 2012, but social CRM remains a small subset of the total CRM application market.

■

Location-based services, analytical solutions, and deeper integration with traditional CRM
processes and social network services (like Facebook and Twitter) will be the focus of social
CRM R&D in 2012.

■

The continued dominance ofmobility and one-to-many interactions accelerate the way people
meet, greet and work with others, and increase the number of contacts.

■

We expect the worldwide market for social CRM software licenses, maintenance and
subscriptions to be approximately $820 million for 2011, which is a 30% growth rate over 2010.
That represents approximately 7% of the overall CRM market. The market forpackaged
software, or software as a service (SaaS), social CRM offerings is highly fragmented, populated
by a few vendors with revenue of $50 million to $125 million, followed by a majority of niche
vendors with annual revenues of under $1 million, and that are unprofitable, despite growth.

■

This research looks at off-the-shelf software and SaaS subscriptions, and does not include inhousedevelopment or consumer services, like Google or Facebook.

Recommendations
■

Define a purpose for your social CRM project based on what it can do to assist and engage
customers, and how it can improve a key business metric, such as loyalty, client defection
rates, cost to serve, increased revenue and lead generation.

■

Success in procuring and deploying social CRM systems is achieved bythose companies that
describe the intended use of the system in relation to a CRM business function, such as
marketing, sales and customer service.

■

Use social CRM software to enable a shift in investment from known to unknown customers.
Focus on the biggest influencers.

■

Look at solution providers that allow you to create online environments as a way to orchestrate
customer...