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April 29, 2004
SAP looks ahead - Hosted CRM not the answer
SAP is choosing not to get into on-demand CRM, a market Siebel has attacked aggressively in recent months in response to the success of upstart hosted CRM vendor Salesforce.com. McDermott says SAP's customers want their CRM systems to be integrated with other enterprise apps and linked to business processes--and that it's only a matter of time before hosted CRM customers look at what they've got and determine it's a standalone sales-force-automation tool. He questions whether hosted CRM vendors will be able to retain their customers for long.
I was in a discussion last night with some discussing this very topic. He's interviewing for my old job managing SFA at a local company, and was wondering why my former company hadn't looked into hosted solutions like SalesForce.com or salesnet.com. I gave roughly the same answer that Bill McDermott did -- that is CRM and SFA systems are at their peak when integrated with other enterprise apps and supporting the departments that support sales & marketing, and linked to business processes. Hosted apps (not web-based versions of standalone apps - don't confuse the issue here!) are not the way to go for a lot of companies.
[via InformationWeek]
Why do a hosted apps offer any less integration capabilities than their packaged software alternatives? Is there some secret technology that only operates within a firewall than can't be used to integrate with services across the Internet? Of course not. In fact, Web services - which SAP and other acknowledge is the future - are designed with explicitly that in mind. And on demand services (by virtue of not being constrained by legacy client server roots) are ahead of the pack in offering such capabilities - most traditional enterprise apps (SAP included) aren't even built on a Java or .NET platform!
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