Software giant Oracle has never been one to shy away from acquisition. In 2005 alone, the Redwood Shores, Calif.-based company gobbled no less than nine competitors. When Oracle President Charles Phillips was asked at a press briefing whether its rival, Salesforce.com, was next on the company's shopping list, Phillips' appetite for acquisition turned to competitive aggression. "In this case, it may be more fun to crush them," he replied.
If such rhetoric seems harsh, it's because Phillips is embroiled in one of Silicon Valley's hottest battles. From powerhouses such as Oracle and SAP to up-and-comers like Salesforce.com and RightNow Technologies, vendors are scrambling to corner the market on customer relationship management (CRM). It's easy to understand why. The global CRM applications market will reach $16 billion in revenue by 2009, up from around $11 billion in 2004, according to AMR Research.
Not bad for a technology that for a while looked as if it were about to fade into dot-bomb obscurity along with wearable computers and online pet food shopping. CRM software helps companies manage customer relationships in a variety of ways, from tracking customer preferences and buying habits, to automating service requests and customer complaints, to granting a company's marketing department access to information on competitors and industry trends. But early incarnations of CRM software were often difficult to implement and demanded a sizable IT investment. With only 16 percent of CRM initiatives demonstrating value, as estimated by AMR Research back in 2003, CRM quickly lost its acronym-du-jour appeal.
Making a Comeback
Today, CRM is not only making a comeback but is a battleground for some of the most successful software executives. Oracle, SAP, Salesforce.com, RightNow Technologies and NetSuite are only a few of the vendors clamoring for top billing as companies loosen their purse strings to establish stronger relations with their customers. Moreover, there's no limit to the measures vendors are taking to establish a foothold in this market. From Oracle's acquisition of San Mateo, Calif.-based Siebel Systems to Salesforce.com's unveiling of a new software platform, CRM is in the midst of a rebirth that is pitting software executives--many of whom are Oracle alumni--against one another as they struggle to redefine the old acronym.
Driving CRM's resurrection is the concept of on-demand services. On-demand is the delivery...