Mid Market CRM - Vendor Strategies For A New Frontier

Mid-Market CRM: Vendor
Strategies for a New

Frontier
Laurie McCabe, VP SMB Insights

and Solutions
&
Sau Lam, Industry Analyst
September 2006
_____________
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Market Trends Report
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Section
Report Highlights
Section 1: U.S. Medium Businesses: A Demographic Snapshot
Section 2: U.S. MB CRM Market Dynamics
Section 3: Key Differences between U.S. CRM and Non-CRM Medium Businesses
11
Section 4: Putting the Mid-Market CRM Playing Field in Context
12
Section 5: Core Product Offerings and Trends
15
Section 6: Beyond the Basics--Tapping into Specific Requirements
21
Section 7: Channel Strategies
26
Section 8: Summary and Conclusions

Figure 1: U.S. MB Revenues Comparison Across Employee Size
29
6
Figure 2: U.S. MB Employee Demographics Comparison Across Employee Size
Figure 3: U.S. MB Company Demographics Comparison Across Employee Size
Figure 4: U.S. MB Total CRM Spending Growth
Figure 5: U.S. MB Total CRM Spending Top Four Verticals
Figure 6: Types of CRM Solutions Implemented By Employee Size
Figure 7: U.S. MB Total CRM Spend Forecasts
10
Figure 8: Key Differences between U.S. CRM and Non-CRM Medium Businesses
13
Figure 9: Use of Internet Applications Among U.S. CRM and Non-CRM Medium
Businesses
12
Table 1: CRM Vendors Definitions of Medium Business and Sweet Spots
13
Table 2: Comparison of CRM Vendors Market Positioning
14
Table 3: Comparison of CRM Products and Pricing
16-17
Table 4: Comparison of CRM Vendor Service and Support Options
19-20
Table 5: Comparison of CRM Vendors Industry Strategy
22
Table 6: Comparison of CRM Vendor Mobility Capabilities
23
Table 7: CRM Vendors Integration Strategies/Capabilities
25
Table 8: Comparison of CRM Vendors Channel Approaches, Partners and

Programs
Table 9: Comparison of MB CRM Brand Leaders
Table 10: Comparison of MB CRM Brand Challengers
Vendor Profiles
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Mid-Market CRM: Vendor Strategies for a New Frontier

Report Highlights
The medium business (MB) market is still under-penetrated in terms of CRM adoption, but MBs are increasingly
recognizing that they need to improve and extend customer relationship management capabilities. AMI estimates
that U.S. MB spending on CRM will grow at 9% over the next five years.
Over the past few years, an increasing number of CRM solutions have come to market that fit MBs needs across
the spectrum, from simple to more sophisticated. However, most companies will look first to brand name market
leaders. salesforce.com, by virtue of its strong growth trajectory, comprehensive solution set and marketing muscle, is the biggest brand in the CRM space today, giving it an immediate edge in consideration. Microsoft CRM,
Sage and RightNow are also enjoying strong growth. Their status as public companies with solid financials and
greater name brand recognition gives them an advantage, although they tend to appeal to different types of customers, for different reasons.
Challengers have a tougher time getting into consideration. However, Entellium, Maximizer, NetSuite and
SugarCRM, often provide customers with very attractive alternatives, offering more aggressive pricing, extra services or other value-added differentiators to entice customers to their solutions.
Although each vendor must tailor its approach to its current market position, offerings and strategic direction to
accelerate market growth, and expand its own market share, but all vendors need to:
Zero in on real MB product and service requirements.

Clearly communicate a unique value proposition, focusing on their best-fit MB segments.
Tune up channel initiatives to tune into market sweet spots and overcome product and/or go-to-market
deficiencies.
Make it easy for MBs to figure out total cost-of-ownership (TCO) to appeal to MBs pragmatic nature
with visible, transparent pricing and TCO data.
Strive for on demand integration, delivering with a crisp integration story that simply works, and works
simply.
By staying focused on these objectives, vendors can continue to help MBs overcome many of the barriers that
have stalled productive CRM adoption in the past, and differentiate their solutions in this very crowded market.
Executive Summary
The medium business (MB) market is still under-penetrated in terms of CRM adoption. Of the roughly 35% of MBs
that use CRM solutions, about one-quarter use homegrown solutions; one-quarter use custom developed CRM
solutions; and one-quarter use packaged CRM solutions. About one-quarter MBs currently use a patchwork quilt of
homegrown solutions for CRM functions. Many MBs dont see CRM as a strategic priority: 48% view CRM as not
important or somewhat important--compared with 52% that view it as important or very important.
However, MBs are increasingly recognizing that they need to improve and extend customer relationship management capabilities with IT-based solutions. AMI estimates that U.S. MBs will spend over $1.0 billion this year on
CRM solutions, and that MB spending on CRM will grow at 9% over the next five years. However, one size does
not fit all, and MB CRM requirements will fit somewhere along a spectrum from simple to more sophisticated, as
follows:
MBs with basic CRM needs: These customers are often deploying a true CRM solution for the first time. They
have simpler CRM requirements, and tend to have less in-house CRM process expertise and technical proficiency.
In most cases, the need to streamline the sales processas opposed to marketing or service automation--is the
primary driver for buying a CRM solution. As first time buyers, they are likely to be more cost-conscious and riskadverse, and less tolerant of complexity, whether in products, pricing and packaging, or services.
MBs with more complex CRM needs: These customers CRM requirements align more closely with those of large
businesses. With more in-house CRM business process expertise and technical resources available, they engage
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in a more rigorous solution evaluation process. While some are first time CRM buyers, many are looking to replace
an existing CRM system or contact management solution that has run out of horsepower with one that provides
greater flexibility, scalability and functionality. Service and/or marketing automation capabilities are likely to be as
or even more important than SFA. Their requirements for integration, mobility, vertical tailoring and other functionality are specific and sophisticated.
CRM vendors are making CRM solutions more accessible and affordable for MBs across this spectrum. Subscription-based software-as-a-service (SaaS) solutions reduce upfront costs, minimize maintenance, and provide familiar, Web-based interfaces. Other CRM entrants, such as Entellium, Maximizer, and SugarCRM, are targeting costconscious MBs with lower pricing than their rivals. However, most customers will look first at the obvious suspectsvendors with brand power and marketing clout. When all else is equal, all of these MB CRM leaders can
leverage brand strength and marketing power to gain consideration in a greater percentage of deals, and often,
when all is equal, to seal the deal against lesser-known challengers.
salesforce.com, by virtue of its strong growth trajectory, comprehensive solution set and marketing muscle, is the
biggest brand in the CRM space today, giving it an immediate edge in consideration. Though not as splashy as
salesforce.com, Microsoft CRM, Sage and RightNow are also strong brands in the MB space. These vendors are
enjoying strong growth, and their status as public companies with solid financials and greater name brand recognition gives them an advantage. Microsoft and Sage also have large partner networks, providing another leg up onto
MB short lists, although they tend to appeal to different types of customers, for different reasons.
Because theyre not as well known as their rivals, MB CRM challengers have a tougher time getting into consideration. However, with all the attention that vendors and media are lavishing on the CRM space, MBs are becoming more educated about CRM and their choices. Challengers, including Entellium, Maximizer, NetSuite and SugarCRM, often provide customers with very attractive alternatives, offering more aggressive pricing, extra services
or other value-added differentiators to entice customers to their solutions. If challengers strengths map closely to a
given customers requirements, their solutions may provide a better fit than MB CRM leaders.
While each vendor must tailor its approach to its current market position, offerings and strategic direction to accelerate market growth, and expand its own market share, all vendors need to:
Zero in on real MB product and service requirementsas opposed to fancy bells and whistles--as they attempt
to differentiate against the competition.
Clearly communicate a unique value proposition. While a couple of vendors have a good shot at capturing a
broad swath of the volume MB CRM market, most will need to carefully position and focus their sales and marketing energies on their best-fit MB customer segments.
Tune up channel initiatives. Vendors need to refresh channel program and partnerships, tapping into partnerships that will help them to best tune into their market sweet spots and overcome their own product and/or goto-market deficiencies.
Make it easy for MBs to figure out total cost-of-ownership (TCO). Sure, everyone has a sticker price, but with
multiple solutions and service options, and varying infrastructure, IT and consulting requirements (not to mention confusing Web sites), it can be tough to figure out what the true price tag is. Appeal to MBs pragmatic
nature with visible, transparent pricing and TCO data.
Strive for on demand integration. MBs are always going to need to integrate CRM with something else. All
vendors (even those that advocate a pre-integrated suite approach) need to pursue all routes that facilitate
integrationpre-built connectors, open APIs, standards-based Web services--to ease integration obstacles.
Vendors that identify, prioritize and develop the most valuable CRM integration points will have an edge.
Those with a crisp integration story that simply works, and works simply, will win MB hearts and minds.
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Mid-Market CRM: Vendor Strategies for a New Frontier

For many customer relationship management (CRM) vendors, the large enterprise market is too
saturated, and the small business market is too dispersed and difficult to reach. However, these
vendors view the medium business (MB) market as just right--for a few key reasons. For starters,
although only 35% of MBs currently use CRM solutions, many are anxious to streamline CRM
processes: AMI-Partners forecasts that MB spending on CRM will grow at a healthy pace of 9.0%
over the next five years. MBs also have more potential CRM usersand typically, more technical and
business savvy than small businessesadding to their allure for vendors.
But, while the mid-market holds common appeal, CRM vendors take different tacks in key areas,
such as:
SMB focus and positioning. Some vendors focus exclusively on the SMB space; others
are oriented towards the upper mid-market and large business. Each vendor tailors its value
proposition to align with its target customer segment(s).
Core products, packaging and pricing: All vendors included in this report include the
CRM staplessales force, marketing and service managementin their offerings. But,
pricing, packaging, delivery models and service and support offerings vary extensively from
vendor to vendors.
Beyond the basics: Vendors attempt to differentiate beyond core CRM by adding and
enhancing capabilities in areas such as integration, mobility and industry-specific versions.
Channels. Vendors such as Microsoft and Sage rely heavily on traditional IT channels
partners to go-to-market, while others focus more on direct and/or non-traditional channels
to generate demand and close business.
In this report, we begin with an overview of U.S. medium businesses, which AMI defines as
companies with 100-999 employees, based on data from our 2005-2006 Medium Business Survey
and most recent Global Model forecasts. We analyze MB demographics, and data and trends
regarding MB adoption of CRM solutions. Then, we compare the mid-market strategies of the eight
CRM vendors interviewed for this report: Entellium, Maximizer, Microsoft, NetSuite, RightNow, Sage,
salesforce.com and SugarCRM. We examine commonalities and differences in product, marketing,
and channels strategies, and conclude with our analysis of their capabilities and prospects. The
appendix provides a detailed profile for each vendor featured in the report.
Section 1: U.S. Medium Businesses: A Demographic Snapshot
AMI estimates that that there are about 97,868 MBs in the U.S. As shown in Figure 1, U.S. MBs
generate an average of $69.53 million in revenues annually for a total of $6.81 trillion across all MBs.
Other revenue highlights include:
While 73% of MBs report experiencing revenue growth over the last 12 months, only 13% of
MBs report they are expecting a revenue increase within the next 12 months.
Last year the average MBs revenue grew by 8%, over the next 12 months; MBs expect
revenues to grow by 10% in the upcoming year.
Over half (57%) of all revenue MBs collect is derived from B2B sales.
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Figure 1
U.S. MB Revenues Comparison Across Employee Size
Average Annual Revenues per Biz

Revenue per Employee
Revenue Growth
% of Biz Experiencing Growth
Avg. LTM
% of Biz Expecting 20+ Growth
Avg. NTM
Revenue Generation by Customer

Type
Consumers
SBs (1-9 Empls)
MBs (100-999 Empls)
LBs (1000+ Empls)
Gov't & Edu. Institutions
All MBs
100100-249
Employees
250250-499
Employees
500500-999
Employees
$69,533,537
$47,341,806
$108,099,927
$156,569,426
$261,663
$271,300
73%
73%
8% 13% 10%
8% 13% 10%
8% 12% 10%
10%
16%
34%
$209,485
80%
7% 11% 9%
9%
9%
18%
$293,645
70%
34%
12%
18%
27%
32%
30%
17% 22%
17% 24%
5%
27%
4%
24%
32%
34%
37%
39%
18%
22%
13%
18%
Revenue Generation by Location

International/ Export
Interstate
Within same state
Local
N = 352
Base = 97,868 PC MBs
Source: AMI-Partners (www.ami-partners.com) 2006
AMI-Partners
6%
8%
32%
39%
30%
23%
32%
30%
2005 (U.S.) (MB) Slide Code (055)
As indicated on Figure 2, U.S. MBs average 266 employees per business. In addition:
6% of MBs have employees abroad; larger MBs are more likely to have employees abroad.
Among these firms, the average number of offshore employees is 12.3 per firm.
38% of MBs have telecommuting employees, and 79% have a mobile workforce. Overall, 2.6%
of the PC MB workforce telecommutes, and 11% are mobile. Larger MBswith 250 to 999
employeesare more likely to have both telecommuters and mobile workers than smaller MB
counterparts.
74% of all MBs have multiple locations.
Figure 2
U.S. MB Employee Demographics Comparison Across

Employee Size
100100-249
Employees
All MBs
250250-499
Employees
500500-999
Employees
747.4
368.1
Average # of Employees
265.7
174.5
Average Number of Planned

Employees
26.10
22.44
28.04
53.37
Businesses w/FT Employees

located in other countries
6%
6%
8%
8%
Avg. # of Employees Located

OffShore
12.34
4.92
22.59
47.21
% of Biz supplying computing or

networking gear to employees
52%
50%
53%
Telecommuting
Telecommuting
Penetration
% of workforce that
telecommutes
2.6%
2.5%
2.8%
38%
36%
42%
50%
% of Biz w/mobile employees
79%
76%
83%
93%
% of Biz workforce that is mobile
11%
11%
13%
13%
N = 352
69%
3.4%
AMI-Partners
2005 (U.S.) (MB) Slide Code (053)

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Almost three quarters of MBs have multiple locations, with an average of 6.7 sites each. An additional 33% of U.S.
MBs are planning on opening additional sites next year, as shown on Figure 3.
Figure 3
U.S. MB Company Demographics Comparison Across

Employee Size
All MBs
100100-249
Employees
250250-499
Employees
500500-999
Employees
74%
69%
84%
91%
Current:
6.66
5.48
8.23
12.36
Planned:
0.51
0.41
0.61
1.11
16%
14%
19%
22%
27%
10%
24%
11%
23%
9%
47%
50%
36%
7%
38%
1.3
1.2
1.5
1.5
33%
32%
33%
37%
Businesses w/Multiple
Locations
Avg. # of sites
Headquarters Location
Small Town/Rural (<50K)
Small City/Town (50K-100K)
Medium City (100K-1M)
Major Metro (1M+)
Company Relocation
46%
% of Biz
Relocated
Avg. # of Yrs.
Since Relocation
Average Age of Business
16.81
16.51
17.43
17.82
% of Biz that are subsidiaries
10%
8%
15%
13%
N = 352
AMI-Partners
2005 (U.S.) (MB) Slide Code (054)

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Section 2: U.S. MB CRM Market Dynamics

While MBs may not have millions of dollars to spend on CRM solutions, they are increasingly recognizing that they
need to improve and extend customer relationship management capabilities with IT-based solutions. AMI estimates
that U.S. MBs will spend over $1.0 billion this year on CRM solutions, and that MB spending on CRM will grow at 9%
over the next five years, as shown in Figure 4. Professional services, healthcare, discrete manufacturing and retail
sectors lead in CRM spending, as shown in Figure 5.
Figure 4
U.S. MB Total CRM Spending Growth

$M
2010
Total==$1,483
$1,483
Total
$1,500
CAGR = 8.5%
2005
Total==$985
$985
Total
$1,000
$1,109
CAGR = 5.1%
$374
CAGR = 25.6%
$865
$500
$120
$0
CRM2005
as SaaS Spend ($M)
2010
CRM Spend
($M)
AMI-Partners
Figure 5
U.S. MB Total CRM Spending Top Four Verticals

Professional Services
$M
Healthcare
$300
$300
$250
$250
$200
$200
$150
$150
$277
$243
$100
$100
$180
$161
$50
$50
$0
$0
2005
2010
2005
Discrete Manufacturing
$250
2010
Retail
$180
$170
$200
$160
$150
$150
$140
$229
$100
$169
$153
$130
$120
$50
$110
2005
2005
2010
$123
$100
$0
AMI-Partners

2010
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However, the MB market is still under-penetrated in terms of CRM adoption. Currently, only 35% of MBs use CRM
solutions. Of these, about one-quarter use homegrown solutions; one-quarter use custom developed CRM solutions;
and one-quarter use packaged CRM solutions, as indicated on Figure 6. About 8% of MBs now use on demand,
SaaS CRM solutions. Interestingly, adoption of SaaS CRM is significantly higher in manufacturing and retail than in
other industries.
Figure 6
Types of CRM Solutions Implemented By Employee Size

100%
Custom developed for us by our
ISV/VAR/software developer
90%
27%
27%
8%
11%
24%
30%
80%
On demand, hosted softwareas-service subscriptions such
as salesforce.com, RightNow,
Siebel CRM On Demand, etc.
70%
0%
60%
Internally deployed and
managed server-based
solutions such as SalesLogix,
Microsoft CRM, Siebel, Oracle,
etc.
50%
23%
30%
25%
26%
40%
Desktop contact management
solutions such as ACT! or
GoldMine
30%
7%
17%
14%
12%
24%
20%
Homegrown solutions based on
Excel, Access, Outlook, etc.
10%
30%
25%
24%
15%
0%
Total
100-249
250-499
500-999
Employees
AMI-Partners
MBs that invest in CRM do so to increase sales and customer retention, and to operate more profitably. By
streamlining and automating key customer interaction functions, they can more rapidly track changes in sales trends,
and more quickly identify new customer demands and needs.
On the supply side, software-as-a-service (SaaS) CRM solutions have made CRM more accessible. Subscriptionbased SaaS solutions decrease barriers to adoption, by reducing upfront costs, minimizing maintenance, and
providing familiar, Web-based interfaces. Furthermore, newer CRM entrants, such as Entellium and SugarCRM, are
targeting cost-conscious MBs with lower annual subscription fees than more well-known players, such as
salesforce.com. Currently, CRM as SaaS spending accounts for only 14% of total CRM spending. But, by 2010, this
will jump to 25%, dramatically outpacing packaged CRM software, as indicated on Figure 7.

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Figure 7
U.S. MB Total CRM Spend Forecasts

In $mils
Total Spending
CAGR
$985
$1,091
$1,194
$1,291
$1,388
$1,483
8.5%
$1,600
$1,400
$1,200
$1,000
$1,109
5.1%
$1,078
$800
$1,039
$992
$600
$935
$865
$400
$200
$120
$157
$203
2005
2006
2007
$252
$309
2008
2009
$374
25.6%
$-
CRM as SaaS Spend
2010
CRM Spend
AMI-Partners
Other factors are also fueling adoption and spending, including:
Increasing interest in using the Internet to improve operations and better serve customers.
Requirements to integrate customer relationship management across multiple locations, and/or across
multiple functions (such as sales, marketing and customer service)
Pressure to compete more effectively with larger companies.
Requirements to meet evolving business needs and regulatory requirements.
But barriers to CRM adoption still exist. A large percentage of MBs arent ready to relinquish older ways of tracking
and storing customer information. About one-quarter MBs currently use a patchwork quilt of homegrown solutions
(primarily personal productivity software such as Excel, Access and Outlook) for CRM functions. Many MBs simply
dont see CRM as a strategic priority: 48% view CRM as not important or somewhat important--compared with 52%
that view it as important or very important.
Lack of cross-organizational involvement in the solution evaluation process, and ensuing low user adoption rates
can also stop a CRM deployment in it tracks. In some instances, MBs deploy a CRM solution only to find that sales
and marketing personnel dont use it because of cumbersome interfaces, poor training, lack of management support,
or just resistance to learning something new. Additional obstacles include:
10
Lack of in-house expertise to evaluate, implement and manage more comprehensive business software.
The average medium business has just 3.6 IT staff in-house.
More CRM solution choices also lead to more confusion about what the right solution is.
Limited in-house business process expertise and limited access/funding for external consultants to
ensure a smooth, productive deployment.

Section 3: Key Differences between U.S. CRM and Non-CRM Medium Businesses
AMI-Partners survey findings reveal that CRM MBs distinguish themselves from non-CRM MBs in several significant
ways, as shown on Figure 8.
Figure 8
Key Differences between U.S. CRM and Non-CRM Medium

Businesses
Have
HaveWAH
WAHEmployees
Employees
Have
HaveMultiple
MultipleLocations
Locations
100.0%
50.0%
80.0%
40.0%
30.0%
45.8%
60.0%
34.7%
20.0%
83.2%
68.0%
40.0%
10.0%
20.0%
0.0%
0.0%
CRM MBs
Non-CRM MBs
CRM MBs
ERP
ERPUse
Use
Non-CRM MBs
Hosted/SaaS
Hosted/SaaS
ApplicationsUse
Use
Hosted/SaaSApplications
52.9%
30.0%
42.3%
50.4%
20.0%
31.8%
27.7%
21.2%
15.2%
10.0%
20.9%
10.6%
0.0%
0.0%
CRM MBs
Non-CRM MBs
CRM MBs
Non-CRM MBs
AMI-Partners
CRM MBs are considerably more likely to have a higher percentage of work at home employees and have more
locations than non-CRM counterparts, suggesting that CRM MBs have more diverse operational requirements than
non-CRM MBs. In addition, CRM MBs spend, on average, about 1 times more than non-CRM MBs on Web site
hosting, with CRM MBs spending about $561/month, versus $385/month for non-CRM MBs.
CRM MBs are also more than twice as likely to use ERP solutions than non-CRM MBs (50% vs. 21%), and almost
twice as likely to adopt on-demand/hosted applications as non-CRM MBs (28% vs. 15%). In fact, CRM MBs are more
liable to use a range of Internet-based business applications than their non-CRM counterparts, as illustrated on
Figure 9, implying that CRM MBs are more comfortable with, and more reliant on the Internet to support day-to-day
business operations.
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Figure 9
Use of Internet Applications Among U.S. CRM and Non-CRM

Medium Businesses
Order entry from rem ote locations/branch offices/custom er sites
56.2%
33.8%
Manage sales leads and keep custom er accounts updated
CRM MBs
49.7%
25.2%
Provide custom er service/support via FAQs, or account login, etc.
22.9%
40.8%
40.9%
Instant Messaging ( Such as Yahoo, AOL, MSN)
Track Shipping, Order fulfillm ent and / or inverntory m anagem ent
42.8%
25.3%
Accounting Services
22.2%
HR Services
41.1%
46.5%
28.3%
Banking/Billing Services, conduct m onetary transactions w ith suppliers/clients
73.5%
51.7%
Online procurem ent
56.0%
36.6%
Back-up or store com pany data/files at service provider location
24.7%
13.1%
Make telephone calls over the Internet
0%
57.2%
38.0%
Em ployee education and training/online classes
52.7%
41.0%
Recruit/hire em ployees online
Web casting (presentations) via the Internet to custom ers, etc.
Non-CRM MBs
37.2%
12.2%
20.5%
11.0%
10%
20%
27.7%
30%
40%
50%
60%
70%
80%
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Section 4: Putting the Mid-Market CRM Playing Field in Context

Over the last few years, the CRM playing field has expanded dramatically, as new vendors have entered the
market, and existing players have launched new offerings formulated for MB requirements. In some ways, these
vendors appear to have little in common beyond the fact that they want to sell CRM to MBs.
Their definitions of MBs vary widelyand so do their market sweet spots, as indicated in Table 1. Most vendors
focus their marketing efforts on SMBs, but a few, including Microsoft, Sage, salesforce.com and RightNow, also
target large enterprises at the division or even corporate level. Of course, Oracle and SAP (who were not
interviewed for this report) have historically served the large enterprise market, but have launched aggressive
attempts to lure MBs to their solutions over the past few years as well.
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Table 1: CRM Vendors Definitions of Medium Business and Sweet Spots

Vendor
Entellium
Medium Business Definition

50-1000 employees
Target Market Profile
Primary target is businesses with 25 to 1,000 employees, especially IT-resource constrained SMBs.
95% of customers are mid-market; rest are departments of large
enterprises
Primary targets are small offices/home offices (SOHO) and SMB.
Also targets and has customers in high tech, real estate, financial
services and professional services industries in larger businesses.
100-1,000 employees; companies w/ $50M $1B in annual

revenues
50-250 seats
250-1,000 employees
SMBs and divisions of large enterprises

SMBs (60% of customers are small, 40% are medium).
Specifically targets wholesale/distribution, professional services
and software companies with industry-specific editions.
RightNow
Less than $1B in

revenue
Sage
100-999 employees
100-999 employees
5-500 seats
Large and medium businesses, government and education.

Approximately 45% of revenues are from mid-sized organizations.
Sweet spot is companies with 1 to 1000 employees, but also has
large enterprise customers, mostly at the divisional level.
SMBs (66% of customers) to large enterprises, across all industries.
5 to 500 seats is the primary target.
Also targets and has customers in divisions of large companies
and government agencies.
Maximizer Software
Microsoft
NetSuite
Salesforce.com
SugarCRM
Each vendor tailors it value proposition and positioning to tune into targeted customer segments, and play on its
strengths, as shown on Table 2. For example, appealing to the vast installed base of Office and Outlook users,
Microsoft emphasizes integration capabilities and look-and-feel similarities between MS CRM and these solutions.
NetSuite, meanwhile, underscores the fact that it provides a pre-integrated front and back office solution built on a
common code base; and SugarCRM highlights open source community advantages. Of course, each vendor also
differentiates its product, packaging and service strategies, as examined in Sections 5 and 6.
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Table 2: Comparison of CRM Vendors Market Positioning

Vendor
Market Positioning
Entellium
Aims to deliver on the original promise of hosted CRM: affordability, simplicity, speed
of deployment and service. Strong focus on user adoption, and workflow automation.
Maximizer Software
Proven, adaptable and affordable CRM and Contact Management solutions to help
SMBs improve sales, streamline marketing, and enhance customer service & support.
Microsoft
Designed to partner with Outlook and Office, Microsoft CRM, and built on widely
adopted Microsoft technologies, MS CRM delivers lower training costs, broader user
adoption, less application-switching, higher productivity, rapid return on investment,
low deployment and support costs; and easy scalability.
Integrated front and back office suite: the first and only Web-based application to offer
everything in a single, integrated solution.
NetSuite CRM provides CRM capabilities that companies need, with greater
power and ease than other solutions.
NetSuite CRM+: the only Web-based CRM system with a true 360-degree view of
all customer data and interactions.
NetSuite
RightNow
Sage
Salesforce.com
SugarCRM
RightNow applies its depth in the customer service and call center areas to its comprehensive CRM suite, providing companies with best-practices expertise and integrated solutions. RightNow delivers customer experience breakthroughs by automatically and continuously developing relevant knowledge and delivering it at every point
of action.
The only family of CRM products designed specifically for the needs of SMBs. It includes ACT! by Sage for individuals, small businesses and enterprise workgroups;
Sage CRM that provides hosted and on-premise CRM for SMBs; and Sage CRM
SalesLogix that which provides full suite, customizable CRM for mid-sized businesses
and small enterprises.
The Leader in On-Demand Customer Relationship Management because it delivers
integrated, completely customizable enterprise applications for companies of all sizes;
is easy to learn and use; can be up and running in weeks or days; provides customers
with fast, tangible ROI.
The commercial open source CRM provider that leverages the strength of open
source to for greater customization and economies whichever way the customer
wants: on premise, SaaS or as an appliance.
Vendors channel strategies span a range of approaches and partner typesfrom traditional resellers and systems
integrators to the open source community to telcos and retail partners.
Beyond these variations, however, we can group these CRM players into a few high-level categories, based on
their heritage and direction:
1. Mid-market packaged CRM incumbents. After acquiring Great Plains (along with Solomon) and Navision to
build its mid-market financials and ERP portfolio, Microsoft built and launched Microsoft CRM in 2003, and
recently announce plans to offer its own MS CRM Live on demand version of the software in 2007. Meanwhile,
Sage Software acquired ACCPAC, netting ACCPACs online, software-as-services accounting and CRM
offerings. Sage has also introduced offerings and migration programs to help ACT! customers move up to its
mid-market CRM offerings, SalesLogix and ACCPAC CRM (which has since been renamed Sage CRM).
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Maximzer, a 20-year veteran of the CRM industry, also provides packaged CRM, but has yet to announce
plans for on demand offerings.
2. Incumbent subscription-based software-as-services (SaaS) vendors. The first wave of CRM-focused
SaaS vendors, including salesforce.com, RightNow, UpShot and Salesnet, charted a new course in the late
1990s. Their goal was to upset the existing software applecart by promising customers faster, cheaper and
easier to use business applications, built as multi-tenant, subscription-based services. Market demand for
SaaS CRM has been growing ever since, propelling salesforce.com and RightNow to become public
companies. As these two vendors grow, theyve embarked on their own shopping sprees: this year, RightNow
acquired Salesnet to enhance its sales force automation capabilities, and salesforce.com acquired Sendia to
bolster its wireless capabilities. With no shortage of CRM add-on solutions (examples include Xactly, which
provides sales force compensation, and RingLead Declone, a service that prevents duplicates by matching
and updating existing contact lists), and competitive pressures mounting, these CRM vendors are likely to
continue looking for acquisitions that yield competitive advantage.
3. Recent CRM arrivals. Entellium and SugarCRM are the newest kids on the CRM block. Entellium offers MBs
refreshingly simple pricing, packaging and service, and concentrates on making its solutions as easy to use as
possible. Meanwhile, SugarCRM has built its applications on Linux, Apache, mySQL, PHP (LAMP) stack,
extending open source cost and flexibility benefits to MBs, via on-premise, SaaS and appliance options.
4. Large enterprise vendors with offerings designed for the mid-market. Though not a focus of this report,
SAP and Oracle-Siebel are increasingly targeting medium businesses. In the dotcom glory days, these
vendors stripped down their offerings, without real consideration to different midsize business requirements.
Since then, these vendors have created second, third or even fourth iterations of their MB CRM campaigns
and solutions. For instance, Siebel created Seibel CRM On Demand, and then acquired UpShot, to provide
the mid-market with a SaaS offering. Oracle subsequently acquired Siebel, and is sorting through its now
multiple CRM offerings (Oracle, Siebel, Siebel CRM On Demand and PeopleSoft) to rationalize positioning for
the market. SAP acquired Business One to give smaller companies a less complex suite offering (including
CRM) at a lower price point, and launched its hosted SAP CRM solution.
In the next few sections, we take a more detailed look at the strategies and tactics vendors are using to
differentiate themselves in order to expand their share of MB business.
Section 5: Core Product Offerings and Trends
Not every vendor interviewed for this report began life with a full complement of CRM staples--sales, marketing
and customer service. But, today, all provide an integrated CRM suite. By providing an integrated suite, vendors
give customers an easier way to manage and collaborate across these different functions. An integrated suite also
helps vendors to dig deeper into an account and gain a bigger share of spending. And, when customers rely on
one vendor for integrated cross-functional CRM, the harder it is to make a switch to rival offerings.
As discussed more fully in Section 6, NetSuite (along with SAP Business One) has taken the suite approach one
step further, providing an integrated front and back office suites. And Microsoft and Sage offer a plethora of back
office solutions to complement their CRM products; in addition, Sage ACCPAC and Sage CRM are built on the
same code base, offering many integration advantages. On the flip side, however, many mid-market customers
are just getting their feet wet in CRM waters. Most of these customers start with SFA, and many use standalone
SFA products. Sage, with ACT!, and Maximizer, with Maximizer 9, have long offered MBs this option, along with
their more comprehensive CRM suites.
While a review of specific features is beyond the scope of this report, Table 3 compares vendors core product
offerings, and below, we discuss some of the key tactics that vendors are employing to differentiate their CRM
offerings.
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Table 3: Comparison of CRM Products and Pricing

Vendor
CRM Solutions and Pricing
Customer Premise: NA
Entellium
SaaS: Suite includes sales force automation, customer service, marketing automation; workflow/
automation, embedded analytics: $60/user/month.
Individual modules: 50/user/month.
No contract, pay as you go policy with monthly billing after first 90 days of service; 5 seat minimum.
MaxiCustomer Premise:
mizer
Maximizer 9: for SOHO, small business. Includes contact and opportunity management; reporting;
Software
Microsoft Office, Outlook integration, accounting link (QuickBooks) and eCommerce. $299/user.
Maximizer Enterprise 9: for SMBs and divisions of larger cos. Includes contact & account, lead,
sales force, marketing, customer service & support case and partner relationship management;
business intelligence; workflow automation; Microsoft Office, Outlook, Exchange integrtration accounting link (QuickBooks) and eCommerce. From $499 to $799/user.
Optional Partner Portal: $499.
SaaS: NA
Microsoft
NetSuite
RightNow
Sage
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Customer Premise: Sales force automation, marketing automation, customer service, Microsoft CRM
for Outlook, workflow, integration, reporting, and analysis. Pricing (includes license + 1 year of software assurance support):
Small Business Edition (SBE): U.S. $440-499 per user; $528-599 per server
Professional Edition: U.S. $622-880 per user; $1,244-1761 per server
External Connector (for Professional Edition): U.S. $8,830-12,500 per server
SaaS: Offers above as a hosted solution via partners. Wholesale price to partners: $24.95 per month
per subscriber; partner marks up for customers. Flat rate and no time commitment
CRM Live SaaS from Microsoft direct: slated for 2Q 2007; pricing TBD.
SaaS:
NetSuite: Integrates ERP, CRM, e-commerce, partner collaboration. Designed for midsize companies (under 500 employees). From $499/month plus $99/user/month.
NetSuite Small Business: For businesses with under 20 employees, Integrates sales, service, accounting and Web presence. From $99/month plus $49/user/month.
NetSuite CRM: CRM sales and marketing functions. From $79/user/ month.
NetSuite CRM+: Adds order and incentive management; project tracking, analytics; customer portal and partner management; cross-sell/up-sell. From $129/user/month.
Vertical Editions: Wholesale/Distribution, Professional Services, Software.
Customer Premise: same as SaaS offering.
SaaS: Integrated CRM suite includes multi-channel customer service and support, sales force automation, multi-channel marketing automation, portfolio of voice-enabled CRM applications.
Pricing based on modules, users and interactions. Monthly, term or perpetual license options. Average selling price in Q106 was $140,000.
Customers can move hosted to on-premise or vice versa. Approximately 87% of customers are
hosted; there is no additional charge for hosting.
Customer Premise:
ACT! by Sage: Contact and customer management for individuals, small businesses, workgroups
and divisions of larger companies. $299-$399/user.
Sage CRM for 30 users or less: sales & marketing automation, customer care, option to purchase
integration server and SOLO. Access, synchronization for Microsoft Outlook, wireless PDA, offline
synchronization.
Sage CRM for 31 + users: Above plus integration server, wireless PDA access, CTI toolkit, option
to purchase SOLO and Web self-service. Access, synchronization for Microsoft Outlook, wireless
PDA, offline synchronization. $595-$795/user.
Sage CRM SalesLogix: Fully customizable development platform provides integrated sales, marketing and customer service automation for moderate to highly complex organizations. $995$1095/user.
SaaS: SageCRM.com: Integrated sales, marketing and support solutions; configurable business process automation; browser-based interface; $69/user/month. (20%-30% of Sage CRM customers use
SageCRM.com).
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SaaS: Sales and partner relationship management, marketing automation, service & support,
analytics and data quality management.
Enterprise Edition: For larger/more complex businesses. Supports multiple divisions and
processes, workflow automation, product line forecasting, revenue allocation. $125/user/
month.
Professional Edition: For companies of all sizes. Includes sales force automation, marketing automation, and customer service and support. $65/user/month.
Team Edition: For small business. View, update and share information, activities and
events in real time from any Internet-connected computer. $995 for up to 5 users/year.
Unlimited Edition: Greater access to AppExchange network of services, apps, tools and
components, spanning CRM-related solutions to finance, HR and industry-specific applications.
CRM Editions: On-demand, Offline, Wireless, Offline PDA, Outlook, Office.
Customer Premise: Sales management, marketing automation, customer support, reporting
and collaboration.
SugarOpen source: on premise only. Provides lead tracking, contact, opportunity, account
management; activities and tasks, marketing campaigns, shared calendar, email processing, dashboard charting, project and case management, bug tracking, employee directory,
RSS syndication, web portals. FREE.
SugarProfessional: Above plus cross-module reporting, campaign reporting, MS Outlook
integration, sales forecasting, document management, product catalog, quoting, contract
management, team management, wireless access, workflow management, access control,
multiple deployment options. $239/user /year.
SugarEnterprise: Above plus Oracle 10g and 9i support, offline client sync and SQL reporting. $449/user/year.
SaaS:
SugarProfessional, same as above. $480/user/year.
SugarEnteprise same as above. $900/user/year.
(Approx. 40% of customers are SaaS; 50-55% on premise; 5% appliance)
salesforce.com
SugarCRM
Delivery Models
As Microsofts recent SaaS conversion underscores (the vendor announced that it plans to launch a Microsoft
hosted MS CRM Live in the second quarter of 2007) SaaS has passed the tipping point in the CRM world. Built as
multi-tenant, Web-based subscription services from the get go, SaaS can provide MBs with economies of scale
and skill that yield faster, less expensive and easier deployments and maintenance.
As more vendors embrace the SaaS model, it becomes less of a differentiator. However, vendors still distinguish
themselves, in part, on the types of delivery models they offer, as follows:
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On-demand zealots. Pure-play SaaS vendors such as Saleforce.com, Entellium and NetSuite
maintain that the on demand way is the way. By building, running, maintaining and servicing all
customers on a common code base, version and infrastructure, they can amortize costs and provide
the best economies of skill for mid-market customers. These vendors position packaged CRM as a
dinosaur, emphasizing on demand benefits such as low up-front costs, anywhere, anytime, access,
real time visibility, rapid deployment, ease-of-use and more responsive support as key SaaS selling
pointsand reasons why subscriber rates are growing at a double-digit pace.
Conventional packaged software vendors that now support choice. Most traditional CRM

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vendors are evolving to offer a combination of software-as-service and/or application hosting

alternatives in addition to packaged software. Hybrid players include Microsoft, Sage and SAP, who
posit that providing customers with a choice between SaaS and on-premise CRM products is the best
route. Although Sage jumped into the SaaS world a few years ago with SageCRM (formerly ACCPAC
CRM), Microsoft and SAP just recently announced their SaaS options and plans. Clearly, these
vendors recognized that they would be at a competitive disadvantage without a SaaS solution.
However, Microsoft and SAP still tend to position SaaS as an interim solution, one a company would
use until it grows into running CRM in house. They continue to promote the benefits greater
customization, flexibility, control, and lower ongoing costs as benefits of their packaged software
options.
Next generation agnostics that have always offered choice. RightNow and SugarCRM fit this
profile, offering a choice of delivery options from the start, and the option to switch back and forth
between SaaS and on-premise options. SugarCRM indicates that about 40% of its customers use the
on demand version, and about 50% of its customers use its on-premise, fully customizable solutions.
The remainder chooses its pre-configured, on premise appliance. Although on demand option is the
fastest growing segment, for SugarCRM, it continues to see plenty of headroom in on premise
deployments. RightNow has also given customers a choice since its inception in 1997. Over the
years, however, customers have increasingly favored SaaS. Today, approximately 90% of new
customers opt for SaaS, and about 87% of all RightNow customers use its on demand solution.
Pure-play packaged CRM vendors. Vendors such as Maximizer, as well as others not featured in
this report, have stayed on the packaged CRM course. Seeing enough opportunity in the in this area
to provide steady growth for at least the next few years, theyve held back on making the major
technical and business investments necessary to bring a true, SaaS product to market. Instead, they
focus their energies on marketing to customers that want an on-premise solution, and on
strengthening capabilities such as ease-of-deployment and use, integration, and wireless and offline
capabilities in their packaged products, and continue to enjoy solid growth.
Pricing and Packaging

As a new kid on the block, how do you compete with existing, well-known players? Newer and less well-know
vendors are undercutting bigger players to appeal to budget-conscious mid-market customers. For example:
Entellium, offers its CRM solutions both as individual modules (marketing, sales force automation,
services) for $50 per user per month, or as a bundled offering for just $60 per user per month. Pricing
includes implementation and training, and 24/7 support.
SugarCRM takes advantage of its open source roots to lure customers with the most aggressive CRM
pricing in our line-up. For example, at $480 per user per year or about $40 a month,
SugarProfessional Edition is the most affordable SaaS CRM solution.
Maximizer trumps packaged CRM rivals on pricing, offering Maximizer Enterprise 9 solution for $299
per user license.
Established vendors use pricing as a competitive weapon as well. In July, Microsoft announced it would bundle
MS CRM Server, Professional Edition with each Microsoft ERP sale beginning in August. Microsoft is also offering
a free MS CRM server to its existing ERP customers currently on maintenance contracts. With this offer, Microsoft
hopes to remove at least one obstacle to deploying MS CRM (customers must still purchase user licenses,
maintenance and services), potentially motivating thousands of its ERP customers to join the MS CRM installed
base.
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On the packaging side, vendors slice and dice their solutions in many ways to appeal to different market
segments and budgets. Most vendors sell their solutions either as full suites, and sell individual modules
separately, to provide MBs with flexible options. Many vendors, including Microsoft, salesforce.com, and
SugarCRM, also offer different editions, which differ in terms of features and the number of users they support,
in efforts to hit the nail on the head for different target segments.
Service and Support
Prompt service and support are critical for maintaining customer satisfaction and loyalty. Most vendors offer
standard service and support components, including technical support, maintenance and training, bundled into
the yearly subscription service, or for the first year of the license, as noted on Table 4. Most often, vendors
provide optional, fee-based support for customers that want faster or more personalized support resources.
Micosofts Deluxe Support Services plan, for instance, offers an on-site supportability review and report,
priority status on support requests delivered by Senior Support Professionals, 1 hour guaranteed response
time on support requests, managed newsgroups and 20% discounts on eCourses.
Table 4: Comparison of CRM Vendor Service and Support Options
Vendor
Entellium
Maximizer
Software
Service and Support Options
Microsoft
Implementation, deployment and training included with 90-day contract.

Free real-time, unlimited access to global customer support via Live Chat, 24x7x365.
Automatic rebate if Entellium doesnt meet 99.7% uptime guarantee.
Free data export anytime, within 30 days of termination of service.
Standard License & Maintenance Agreement (LMA) 20% of MSRP (with a minimum of
$1,000).
Support is not bundled w/licenses, but complimentary half hour is included w/purchase.
$35 per 30 minutes for contract customer support for the following products: Maximizer, Accounting Link for QuickBooks products, ecBuilder, MaxLink. $100 per 30 minutes for Maximizer Enterprise Pervasive Workgroup, MaxExchange, MaxSync.
Additional services: training, business process consultation, software implementation,
customization/integration and 1-800 technical support line. Fees based on daily rates
and custom work basis.
Full Packaged Product (FFP) Maintenance,included with purchase (available first year
only). Product updates, transformational assurance, customerSource; online training
benefits; discounts on Flex Support.
Software Assurance (SA): 25% of customers system list price (for Open, Open Value,
Select and Enterprise Agreements). 2 tech support incidents, 3 hour guaranteed response time; discounts on Flex Support; managed newsgroups; online training; 2 Microsoft CRM eCourses; product updates, transformational assurance, customerSource.
Deluxe Support Services: Starts at $25,000 + 25% (SA). Technical Services Account
Management; on-site supportability review and report, support coverage defined by the
clients Software Assurance or FPP Maintenance enrollment; 24/7 support access for
severity 1 issues, priority status on support requests; 1 hour guaranteed response time
on support requests, managed newsgroups 20% Discount on eCourses.
Customers enrolled in a service plan
Customers not enrolled in a service plan
Per-Incident
$125 USD
$175 USD
5-Pack
$600 USD
$850 USD
Flex Support
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NetSuite
RightNow
Sage
Salesforce.com
SugarCRM
60-Day free support with purchase of NetSuite; customers can submit unlimited e-mail
cases. Support hours are M-F, 6 a.m. to 4 p.m. (PST).
After first 60 days: standard support includes: 24/7 self-service support via online tools
(NetAnswers Knowledge Base, User Guides, Help, Glossary, Tips, Free Training Clinics,
etc.).
Net CARE Silver Support: priority call queuing calls; unlimited cases and calls.
Price: 22% of annual subscription. Respond to call within 1 business day.
Net CARE Gold Support: extended support hours; "front of the line" queuing; unlimited
cases; telephone support via toll free line. Weekend e-mail support, limited phone support on weekends of major release. Price: 27% of annual subscription. Respond to calls
within 6 hours.
Basic Support: included in solution price;includes 24x7 Web-based self-service, email
support, 24x7 access to RightNow Site Status Page.
Preferred Support: includes 24x7 phone support, priority handling of submitted incidents
(in addition to what is included in Basic). Pricing: 18% of software sold.
Premier Support: Includes a technical account team (in addition to what is included in
Basic and Preferred). Pricing: 25% of software sold.
Standard maintenance & support contracts: Access to new software, SupportOnline
Web site with KnowledgeBase, Web-based ticket/issue submittal and phone access to
Tech Support. Price: 20% of MSRP of software purchased (10% for maintenance and
10% for support).
Additional programs: in-person and online product training, provided by business partners; basic per-incident support plans.
Sages Priority Software Support: annual subscription-based service; unlimited access
to support reps and 1-hour call back.
onDemand Support plan: available per incident or by the 5-pack (3 hour call back, $125
per case, $525 for 5 case resolutions).
Basic Support: Basic customer support via multiple channels.
Premier Support: Increases in access and response times, plus personalized service
and best practices.
Premier Support with Administration: Management of application by an experienced
Salesforce administrator, plus benefits of Premier Support.
Standard Support: 4 business hours maximum response time for Priority 1 cases, unlimited cases, email, support portal, pro help forums, included in any editions that customers buy.
Extended Support: 2 business hours maximum response time for Priority 1 cases; unlimited cases. Email, support portal, pro help forums, live phone support during business
hours. 15% of the total license deal or $1,000/year, whichever is greater.
Premium support: 1-hour maximum response time for Priority 1 cases; 24x7xx365;
unlimited cases. Email, support portal, pro help forums, live phone support during business hours, after hours phone support available for Priority 1 cases, assigned support
representative and quarterly account reviews. 25% of the total license deal or $4,000/
year, whichever is greater.
SaaS vendors, by the nature of their offering, must tightly link solutions and the services required to support them.
NetSuite, RightNow, salesforce.com and SugarCRM bundle basic service and support into their SaaS subscription
fees, and provide optional plans for customers that want a higher level of support. Upstart Entellium is taking support
a step further, providing free real-time, unlimited access to global customer support via Live Chat, 24/7, for all
Entellium subscribers. Entellium also prides itself on offering the industrys most competitive service level standards
by guaranteeing an automatic rebate if it fails to meet 99.7% uptime.
Because responsive, comprehensive and superior service can ultimately provide more differentiation and customer
loyalty than product differentiationparticularly as products become more commoditizedpressure will mount for
vendors to create more innovative, value-add services options.
Section 6: Beyond the Basics--Tapping into Specific Requirements

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What are vendors doing to differentiate themselves beyond core CRM capabilities, packaging and delivery
models? Although we could look at multiple areas, weve chosen threeindustry-specific CRM, mobility and
integrationthat vendors are investing in to spur adoption of their CRM solutions in the mid-market space.
Industry Specific CRM
Industry specific enterprise resource planning (ERP) solutions have been around for a long time. In contrast, CRM
has historically been cast as a horizontal function. However, the vertical bug is biting CRM vendors too. By
aligning their solutions with specific vertical needs, they hope to provide under-resourced MBs with a way to
further cut time and costs for deploying their solutions. Some are taking a do-it-yourself approach and others are
relying on partners, as detailed in Table 5.
Industry-specific do-it-yourselfers: These vendors believe that spot-on solutions catered to specific
verticals serve target segments more effectively than horizontal CRM. By building industry-specific language
and processes into each edition, they purport to save customers time and money. NetSuite, for example,
offers vertical CRM editions for professional services, wholesale/distribution and software industries. For
example, the companys Wholesale/Distribution Edition comes with features such as advanced inventory with
bin management, landed cost for detailed warehouse management, and tracking, drop shipment returns
management. NetSuite indicates that this customization is paying off, as 40% of its overall sales are from
these three verticals. Maximizer offers out-of-the box templates for financial services, hi-tech software and real
estate industries. Although Oracle/Siebel declined to be interviewed for this report, Siebel CRM On Demand
also provides four industry specific versions.
Partner proponents. Microsoft, Salesforce.com and Sage leverage business partnerstypically a mix of
developer, VAR and system integrator typesto add industry expertise and tailoring. Microsoft and Sage have
strong existing partner networks, and rely heavily on VARs and SIs to customize their CRM solutions for
customers. Developer partners also figure into vendors vertical market equations. salesforce.coms
AppExchange platform and marketplace, for example, enables buyers and sellers to archive, sell and share
applications. More than 40 of the 350-plus AppExchange solutions address industry-specific needs.
salesforce.com recently introduced AppExchange OEM Edition, an on-demand platform that partners can use
to develop and deliver new on-demand applications. MyLoanBiz, for instance, is built entirely on AppExchange
OEM Edition, providing loan officers with an on-demand application to help manage all aspects of the loan
business.
Both Entellium and SugarCRM have taken unique approaches. SugarCRM relies on partners and customers drive
delivery of vertical capabilities. They can tailor via configuration via SugarStudio, or use APIs for deeper
customization. SugarCRMs open source community can share via SugarForge, through which SugarCRM offers
Sugar Suite extensions, modules, language packs, themes, and a range of support and information services.
Entellium takes a different tack entirely. In its view, companies need to tailor solutions based on they way they
sellvia direct feet on the street sales reps, inside telesales, indirect and distribution channels, etc. Entellium
designs specific features that relate to the requirements of these different channels, and, at the same time, can roll
up for a complete customer view across all channels.
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Table 5: Comparison of CRM Vendors Industry Strategy

Vendor
Entellium
Maximizer Software
Microsoft
NetSuite
RightNow
Sage
salesforce.com
SugarCRM
Industry Strategy
Tailors its solutions for the ways a company sellsdirect, telesales, indirect, etc. instead
of by industry. Solutions are designed to meet these different channel needs, and roll up
for a complete view across channels.
Offers out-of-the box vertical templates for the financial services, hi-tech software and
real estate industries.
Works with partners (both ISVs and Solution Providers) that design vertical solutions that
integrate with MS CRM.
Offers vertical Editions for services, software and wholesale/distribution companies.
Does not offer industry-specific applications, but has a high concentration of customers
in public sector, financial services, retail / CPG, high tech, telecomm and services.
Addresses vertical CRM requirements predominantly through business partners, who
apply their experience and core competencies in the industries in which they specialize.
ACT! by Sage for Real Estate was introduced May 2006 as a first packaged, industryspecific product, based on substantial adoption of ACT! in the real estate industry.
Addresses vertical requirements with AppExchange, its an online marketplace, where
buyers and sellers can archive, sell and share applications. 40+ AppExchange solutions
address industry-specific needs.
AppExchange OEM Edition enables partners to develop and deliver new on-demand applications, including industry-specific ones.
Relies on partners to design solutions tailored to the needs of different verticals, such as
healthcare, financials, etc.
Although many companies will continue to find horizontal CRM perfectly satisfactory, industry-specific CRM is a
trend that is here to stay. Vertical editions give vendors a way to differentiate in the market, and if done well,
industry-specific CRM gives customers a quicker route to a short list, and a solution that more readily and
inexpensively conforms to their specific business requirements. However, there are so many verticals and microverticals--along with individual company nuances--that demand for one-on-on vertical tailoring should also be in
demand for a long time.
CRM Mobility Solutions
MB demand for easily extending applications to remote, geographically dispersed and mobile users is rising. As
mentioned in Section 1, 38% of MBs have telecommuting employees, and 79% have a mobile workforce, and of
course, sales people, by their very nature, are often on the go. In addition, high-speed data networks and mobile
devices are increasingly ubiquitous, and the technology to package and deliver information via mobile devices is
improving. These forces are driving CRM vendors to beef up mobility and offline synchronization capabilities.
SaaS solution vendors have offered offline synchronization capabilities for a while now. This enables customers to
store sales and customer information on their disconnected laptop, and bi-directionally update changes when they
reconnect. Meanwhile, all vendors are keen to extend wireless access, but capabilities and pricing varies, as shown
on Table 6. For instance:
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Entellium provides eMobile, an extension of Entellium eSalesForce, for $25/user/month. Customers

who buy Entellium solutions via Verizon can add wireless access for $10 per user per month.

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Maximizer users can use any PDA with a browser to connect to and access all company contact
information via Maximizers wireless portal (which is included in the Enterprise product) and
through the employee portal.
Microsoft CRM Mobile is available on all devices that run Windows Mobile.
Sages CRM solutions have mobile synchronization to most handhelds, with full CRM applications
on mobile devices such as Blackberry, Windows Mobile Pocket PC and Windows SmartPhone
devices. Pricing for Sage CRM SalesLogix Mobile for Pocket PC, Blackberry, and SmartPhones,
for example, is $395 per user license.
salesforce.com offers AppExchange Mobile, priced at $50 per user per month, enabling mobile
access to Salesforce CRM or AppExhange apps from any mobile device.
Table 6: Comparison of CRM Vendor Mobility Capabilities

Vendor
Entellium
Maximizer Software
Microsoft
NetSuite
RightNow
Sage
Salesforce.com
SugarCRM
Offline and wireless capabilities
Entellium eMobile: $25 per/user/month.

Offline synchronization for disconnected laptops.
Maximizer 9 access: Palm PDA synchronization and Maximizer.
Enterprise 9 access: wireless online PDA (BlackBerry, Treo, Pocket
PC), and Palm PDA synchronization.
Microsoft CRM Mobile: available in all devices that run Windows Mobile.
New open-source client for mobile devices available August 2006.
Working with two wireless solution vendors; not yet publicly announced.
Offline synchronization for NetSuite CRM.
Wireless integration via professional services (e.g. send an alert to a
Blackberry when an inquiry is created).
Mobile synchronization to most handhelds; full CRM applications on
Blackberry, Windows Mobile Pocket PC, Windows SmartPhone devices.
Corum Mobile Platform to develop Sage CRM SalesLogix Mobile capabilities for Pocket PC and Blackberry; J2X to develop ACT! capabilities
with Blackberry.
ACT! add-on solution with Sprint subscription service: $24.95/month,
$239/year per user
Sage CRM SalesLogix Mobile for Pocket PC, Blackberry, and SmartPhones: $395/year per user.
Offline Edition: disconnected laptop synchronization.
Offline PDA Edition: offline access to salesforce CRM via Pocket PC or
Palm OS device.
AppExchange Mobile: mobile access to salesforce CRM or AppExhange
apps from any mobile device.
Offline synchronization, bi-directional synch with SugarEnterprise.
Working with SONA mobile for full wireless client user interface, to be
available in a few months.
Although a few vendors currently lag in this area, packaged wireless options are on their way to becoming a
staple. SugarCRM is working with SONA mobile for a full wireless client user interface (due later this year),
and NetSuite is working with two wireless solution providers. RightNow currently provides wireless integration
via its professional services organization, but its recent acquisition of Salesnet (which has strong mobility
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functionality) should help RightNow to make this a standard offering soon.

Integration
Most MBs deploy back office solutions, such as accounting and financials, before CRM. Ideally, they want to
eliminate redundant data entry and gain a complete view of their customersmaking solid integration capabilities a
must for CRM vendors.
Over the years, vendors have tackled this challenge in many ways, with everything from one-off integrations to
integrated suite solutions to product-specific connectors. Since the late 1990s, XML and Web services related
technologies and standards have gradually been making it easier and cheaper to integrate applications, and vendors
are progressively incorporating Web services and service-oriented architecture (SOA) frameworks, tools, procedures
and workflows into their applications. But, while this eases some integration issues, many remain. After all, these
technologies and standards are still developing, and customers are usingand vendors are still selling and
supportinglegacy applications that were built long before Web services came to the forefront.
And, while Web services and standards are making it easier to integrate best-of-breed solutions, pre-integrated
business solution suites are likely to afford integration benefits for the near future. In addition, suites that are more
comprehensive enable vendors to enter other application markets, and increase account presence and customer
spending. As a result, as indicated on Table 7, vendors tend to align their integration strategies with pragmatic
interests as well as longer-term Web services integration goals. For instance:
Vendors with pre-integrated front and back-office suites, such as NetSuite and SAP Business One,
contend that since business transactions are tightly coupled, applications should also be tightly linked.
Because their applications are on a common code base, they provide a single, integrated system of
record. NetSuite, for instance, believes that while standards-based, Web-services integration eases some
integration woes, pre-integrated suites, standardized on a single system of record, will always be easier
and more cost-effective for customers.
Vendors with different back and front office solutions. Microsoft and Sage have a full complement of
back office solutions, but each has multiple products and different code bases within its portfolio. These
vendors offer connectors to help customers link their CRM solutions to both their own back office
products, and to other popular brands. For instance, Sage offers 20 packaged integrations, providing
standardized integration with other Sage and third-party accounting and financials solutions. Today,
Microsoft uses its .NET platform for integration, and is developing deeper support for Web services. It
also provides prepackaged connectors and templates for connecting its solutions with its own and thirdparty ERP and financials solutions. In the future, Microsofts Dynamics will provide deeper support for
Web services, and easier information exchange via XML.
Standalone CRM solutions. Entellium, Maximizer, RightNow and SugarCRM also invest heavily in this
area. SugarCRM, for instance, provides open access to its code, posts validated plug-ins and connectors
to its library, and rewards contributors. RightNow uses Web services based intelligent agents and other
tools to create re-usable integration templates. Maximizer provides an out-of-the-box integration for Intuit
QuickBooks, and plans to do more of these for other popular SMB brands. It also offers an integrator
toolkit for financials and ERP applications.
Though their approaches vary for practical reasons, all of these vendors recognize that integration capabilitiesor
lack thereofwill make or break many mid-market deals. Most MBs are unlikely to rip and replace their legacy back
office solutions until they run out of steam, and CRM vendorseven if they offer both front and back office
solutionsneed to be able to easily integrate with a wide array of mid-market back ERP and accounting solutions.
In reality, the age-old debate over integrated suites v. best-of-breed isnt likely to end any time, and customers
preference for these approaches is likely to remain split. All vendors will need to keep pace with standards-based
integration trends, offer a modular approach for customers that want to mix and match, and strive toward the goal of
delivering true, turnkey integration. Meanwhile, for new companies, without legacy applications, and companies that
have decided to replace legacy applications, the integrated suite approach is likely to be very attractive.
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Table 7: CRM Vendors Integration Strategies/Capabilities

Vendor
Integration Strategy/Capabilities
Entellium
Uses Web services for integration.
Pre-built "connectors" between Entellium and SMB financial packages, desktop apps, etc.
CRM smart client allows customers to use power of desktop for instant business intelligence.
Maximizer Soft Uses Integrator toolkit (supports all major programming languages) to enable partners to
ware
do custom ERP integrations.
Out of the box interface for Intuit QuickBooks.
Intends to add nine additional out of the box integrators.
Microsoft
.NET platform integrates MS CRM more tightly with other MBS and partner solutions and
with MS Office suite as part of the MS integrated innovation strategy.
Direct integration to MS Dynamics GP available now; MS Dynamics AX will ship this year.
Connectors to Siebel CRM SAP, Oracle, PeopleSoft, and others available via MS CRM
BizTalk adaptor this fall.
NetSuite
Web services-based NetFlex platform for integration with third-party apps, customization,
extension, and building new apps.
Advocates pre-integrated suite approach via NetSuite pre-integrated front and back-office
solutions.
RightNow
Integration capabilities built on an XML and Web services.
Five integration methods: XML API, External Events and Email Event Handlers, Data
Transfer Utilities, Pass Through Authentication, and Application Portal.
Actively involved with the WS-I (Web Services Interoperability Organization).
Has performed more than 150 integrations including CTI, order management, billing, credit
card processing, and others.
Packaged integrations:SAP, Remedy, Siebel, PeopleSoft, Clarify, Kana, eGain, Onyx and
Cybersource. Packaged CTI integrations include Avaya, Five9 and SimpliCTI.
Sage
Supports integration in 3 ways:
Designs its own products to integrate with each other; uses open standards to allow customers to do integration themselves
Integration platforms link products via standard integration (CRM Solutions provides 20
standardized packaged integration solutions)
Discrete integration plans between product lines built around non-standard data fields or
customizations that need to be integrated.
25
Salesforce.com
SugarCRM
Supports integrated data viewing (i.e. dashboards), application integration, business process integration, and service-based integration via Sage Application Integration Services
(AIS) standards. Native product interfaces for Sage CRM products are used to build adaptors that plug into AIS, and provide access to the applications data, determine data
changes, and access business logic in an application.
Web services enabled APIs and AppExchange platform for integration, application extension, and building new applications. Supports integration with enterprise applications, including SAP, PeopleSoft, Oracle, other third-party solutions, homegrown applications, portals.
Solutions built on open Linux, Apache, mySQL, PHP (LAMP) stack; PHP SOAP layer is
built into its offerings. Sugar provides open access to code, posts validated plug-ins to its
library, and provides rewards for contributors. It plans to continue to expand its library of
plug-ins.

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Section 7: Channel Strategies

Finding the right channel strategy is critical for vendors that want to succeed in the mid-market, but the job isnt
easy. MBs have more complex solution and integration requirements than small businesses, but lack the IT
expertise and financial resources of a large company. Many vendors struggle to come up with a profitable,
successful channels formula that provides MBs with the attention they need.
To meet this challenge, most of the CRM vendors that we interviewed employ both direct sales and indirect
channel partners. However, the degree to which they utilize partners varies significantly. Not surprisingly, vendors
with a traditional, packaged software legacy tend to favor a traditional, partner-centric approach. Meanwhile,
although newer SaaS vendorsas well as open source vendor SugarCRMrelied heavily on evangelistic, direct
sales model to jump start their businesses, many are now building indirect channels programs to accelerate
growth. Instead of concentrating on traditional IT VARs and SIs, however, some are choosing to pursue
relationships with broader range of channel types, including retail, telcos and the open source community.
In some cases, vendors fit more than one of the following categories, but we can categorize them based on their
primary focus, as discussed below and indicated on Table 8.
Partner-centric vendors
Partner-centric vendors rely heavily on traditional VARs and SIs to drive sales. Vendors should find an
increasingly receptive channel as traditional IT channel players continue to shift from reselling commodity
hardware and software to solutions that provide opportunities to sell higher value add services. AMI-Partners
2005-2006 U.S. Channel Partner survey indicates that the percentage of partners offering customization services
for packaged software jumped from 49% in 2004 to 62% in 2005.
Microsoft indicates that 100% of its SMB sales are via its 1,500 active CRM partners worldwide.
(Note: Microsoft intends to sell MS CRM Live directly to SMBs when it launches in 2007). Microsofts
CRM go-to-market resources include 100 sales and technical specialists, 50 marketing program
managers, 400 account teams covering over 10,000 accounts and 450 partner account managers.
This investment is paying off: Microsoft reported that its CRM customer base has surpassed 7,500,
growing more than 100% since 2004.
Sage sells over 90% of its solutions via partners, and invests in multiple recruiting, marketing and
sales support programs. Some of Sages more unique programs include its 100/100 Program, which
helps 100 select business partners find, hire and train 100 field executives in 100 days; and its Fast
Track for Growth Program, which provides smaller partners that dont have a dedicated sales staff
with sales training, lead generation support, mentoring relationships, and help developing a custom
sales and marketing plan.
Channel Pragmatists
These vendors favor direct channels, with heavy emphasis on the Web, telesales and/or feet-on-the street sales
reps. However, they also leverage a variety of channel partners to help expand market reach. Since SaaS
solutions dont require hardware and software implementation, vendors such as NetSuite and RightNow are more
likely to strike mutually productive deals with business process consultants and SIs than with conventional VARs,
who rely on hardware for the majority of their total revenues and sell the highest percentage packaged software
among all channel types. In contrast, Maximizers packaged solution aligns well with VAR business models and
expertise.
26
Maximizer has found that some midsize customers want a direct relationship with supplier; by
providing this relationship, Maximizer gains a competitive advantage. While 68% of Maximizers sales
are direct sales, and 32% are via partners, the vendor estimates that partners influence about 60% of
its sales. To avoid channel conflict, Maximizer enables partners to secure accounts theyve
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identified, and farms out qualified leads to partners.
RightNow relies heavily on direct sales, which account for about 90% of its revenues. However, the
vendors service and referral partner program offers revenue opportunities for consultants, systems
integrators and solutions providers that sell RightNow's solutions to their customers and/or provide
complementary solutions and professional services to RightNow customers. For instance, outsourced
call center partners can use RightNow as a platform to provide customer care solutions to their clients.
NetSuite, with 200+ mid-market VAR and boutique partners, has long viewed the channel as a critical
on ramp to a volume SMB business, and has aggressively pursued traditional VARs and SIs for the
past few years. NetSuite targets classic mid-market VARs, and large enterprise VARs that want to
move into SMB. NetSuite pays active VARs recurring revenue for the life of the contract (roughly 3045% of service, depending on volume). Today, these partners drive about 25% of NetSuites sales,
with 75% of sales driven through direct friend referrals or search engine placement. NetSuite
recently reinforced its June agreement with CompUSA, in which CompUSAs 220 business centers,
1,100 dedicated business service representatives, and 20,000 independent partners (local VARs and
business solution providers) will resell NetSuite solutions. The partnership potentially provides
NetSuite with the local presence, personal touch and the training resources required to help bring its
solutions to a broader SMB audience.
Channel Innovators
Some vendors including Entellium, salesforce.com, NetSuite and SugarCRM are pursuing the channel road less
taken. While they may also have programs for traditional VARs, they are as or more focused on forging new types
of channel relationshipsfor different reasons:
27
Entellium avoids the traditional VAR channel. Instead, Entellium, whose sales to date have primarily been
via direct telesales and the Web, intends to partner with existing SMB brand holders, exemplified with its
first such partner, Verizon Wireless. Through this relationship, Verizons 5,000 sales reps will sell
Entellium to Verizons SMB base. Entellium believes that while Verizonand other non-IT brand holders
might find it difficult to sell more complex CRM solutions, they will find Entellium's portfolio relatively simple
enough to sell.
salesforce.coms strategy is to attract influencers, such as SIs, sales methodology firms, consulting
firmsand most visiblyother SaaS developer partners. salesforce.coms sales are 100% direct, but the
vendor sells jointly with AppExchange partners; consulting partners that provide complementary technical
and business consulting services; and marketing and referral partners that introduce its CRM solutions to
their customers earn a percentage of revenues for referred accounts. AppExchange is clearly
salesforce.coms channel centerpiece: the vendor has more than AppExchange 300 partners that
distribute their applications on its AppExchange platform. AMI Partners research reveals that software
developers derive the highest percentage of revenue from MBs (23%) among channel partners,
underscoring the potential that AppExchange has in the mid-market.
SugarCRM finds that the open source community is its best lead source. Open source evangelists test
and pilot SugarCRM, and many go on to decide to they advanced functionality and a commercial
relationship drastically abbreviating the sales process and reducing the cost of sales. In fact, SugarCRM
sees a direct correlation between downloads and revenues, and on average, a one to two month sales
cycle. The vendors inside, inbound sales team closes about 60% to 70% of all sales. SugarCRM also has
commercial, revenue sharing partnerships with open source players that provide translations and vertical
functionality, and also resell the solution; many also contribute code back (not all do this). SugarCRM
works with these partners to support their sales efforts, and intends to put more programs and process in
place to support this channel. AMI-Partners research indicates that although Microsoft Windows still
dominates, 43% of medium business focused channel partners now support the Linux platform, boding
well for SugarCRMs channel initiatives.
Table 8: Comparison of CRM Vendors Channel Approaches, Partners and Programs

Channel-Centric
Vendors
Microsoft
100% indirect SMB
sales. Microsoftdriven, partnerassisted sales in large
business.
Sage
90%+ indirect sales.
Channel Partners
Channel Programs/Resources
VAR, SI, Hoster, Reseller and ISV

partners.
1,500+ MS CRM partners worldwide.
Includes Gold, Certified and Registered partners.
Business process experts, industry specialists, technology and
integration specialists.
23,000 certified Sage partners
worldwide; 60,000 consultants
refer CRM business from accountancy world.
Resources include: 100 sales and technical sales specialists; 50 marketing

program managers; 400 account
teams; 450 partner account managers.
Multiple programs include Fast Track

for Consultants,
100/100 Program, Fast Track for
Growth, Hiring Assistance, Marketing
Alliance Program, Cross Product Referral Program.
400 partners worldwide

Maximizer Enterprise: Reseller
channel (certified reseller business partners (VARs) and sales
agents (referrals); direct Sales.
Maximizer: direct inside sales;
eStore; retail (Staples, Business
Depot, etc.); distribution (i.e.
Ingram Micro).
200+ VAR and boutique firms,
CPA, Payroll Services firms.
CompUSA partnership: leverages CompUSAs 1,100 dedicated business service reps,
20,000 independent consultants, 220 business centers.
Programs for:
Certified solution providers
Authorized sales agents
Certified consulting partners
Authorized resellers
Consultants, system integrators

and solutions providers and outsourced call centers.
Solution Provider: certified NetSuite

Partners that offer pre/post-sales services.
Referral: revenue sharing referral program.
NetFlex: helps partners extend NetSuite with NetFlex Web services platform.
Service & Referral Partners: for partners providing RightNow solutions and/
or complementary solutions and professional services.
Telcos and SMB Brand Holders, i.e. major credit holders,

software companies and others
with strong brand equity and
SMB installed base.
Solutions Partners: create solutions on the AppExchange platform.

Consulting Partners: trained and
certified in implementation best
practices; provide complementary technical and business services.
Marketing & Referral Partners:
introduce salesforce.coms solutions to customers and earn a
percentage of revenues.
Channel Pragmatist Vendors

Maximizer
68% direct sales; 32%
indirect.
NetSuite
indirect.
RightNow
indirect.
Channel Innovator Vendors

Entellium
70% direct; 30% indirect.
Salesforce.com
90% direct
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Verizon Wireless (5/06) Jointly targeting

wholesale, distribution, healthcare, construction, professional services.
Partnerships with other telcos and
SMB brand holders in process.
AppExchange: platform and marketplace for on-demand applications. ondemand platform. More than 300 applications are available.
AppExchange OEM Edition: allows
ISVs and partners to build, sell, and
deliver on-demand applications built on
the AppExchange platform.

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SugarCRM
60%-70% direct via inside inbound telesales
team.
Recruits partners that:

Are more technically advanced/
skilled
Share OSS strategic vision
Provide implementation, integration capabilities
Provide consulting capabilities
120 partners in more than 30
countries around world.
Open source community for

lead generation.
Channel group works with
partners on revenue sharing
commercial relationships.
The good news for vendors using indirect channels is that according to AMIs 2005-2006 U.S. Channel
Partners study, total SMB channel partner revenue grew over 13% to $132 billion. In addition, channel
partners are shifting their focus somewhat from small business to medium business. The proportion of
revenues that channel partners derive from SBs decreased from 2004 to 2005, while the proportion of
revenues from MBs increased slightly, reflecting MB customers greater demand for applications and services.
However, as competition for mid-market CRM customers soars, vendors investments to identify, recruit and
sustain productive sales partnerships will intensify. In general, partners in highest demand will be those with:
Existing presence and customer relationships in the mid-market;

Experience selling, servicing and supporting mid-market customers in the CRM space;
Industry-specific expertise, applications or services that complement the vendors solutions;
Commitment to train and/or certify sales people on the vendors applications, and proactively
engage in joint sales and marketing activities; and
Commitment to integrate their solutions/services with the vendors.
That said, each vendor will align their channel mix based to their strategic market objectives and the relative
complexity of selling and deploying each solution. For example, Entellium, which prides itself on having a very
easy, turnkey solution, will continue to concentrate its partnering energies on telcos and SMB brand holders
that can significantly extend its reach. Others, such as Microsoft and Sage, whose solutions require more
implementation and integration expertise, will continue to focus on building partnerships with vendors that can
provide these services. Meanwhile, salesforce.com is likely to put a premium on demand application
developers to further its AppExchange platform and marketplace goals.
Section 8: Summary and Conclusions
Many vendors provide strong CRM solutions targeted at MB customers. However, one size does not fit all
either from a market or vendor perspective. Although larger MBs often have more sophisticated needs than
smaller firms, size is just one factor in the equation. MB CRM requirements will fit somewhere along a
spectrum from simple to more sophisticated, as follows:
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MBs with basic CRM needs: These customers are often deploying a true CRM solution for the
first time. They have more basic CRM requirements, and tend to have less in-house CRM process
expertise and technical proficiency. In most cases, the need to streamline the sales processas
opposed to marketing or service automation--is the primary driver for buying a CRM solution. As
first time buyers, theyre likely to be more cost-conscious and risk-adverse, and less tolerant of
complexity, whether in products, pricing and packaging, or services.
MBs with more complex CRM needs: These customers CRM requirements align more closely
with those of large businesses. With more in-house CRM business process expertise and
technical resources available, they engage in a more rigorous solution evaluation process. While
some are first time CRM buyers, many are looking to replace an existing CRM system or contact

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management solution that has run out of horsepower with one that provides greater flexibility, scalability
and functionality. Service and/or marketing automation capabilities are likely to be as or even more
important than SFA. Their requirements for integration, mobility, vertical tailoring and other functionality
are specific and sophisticated.
As the array of CRM providers and solutions expands, MBs are increasingly likely to find can a solution that meets
their specific requirements. However, most customers will look first at the obvious suspectsCRM vendors with brand
power and marketing clout. When all else is equal, all of these MB CRM leaders can leverage brand strength and
marketing power to gain consideration in a greater percentage of deals, and often, when all is equal, to seal the deal
against lesser-known challengers.
salesforce.com, by virtue of its strong growth trajectory, comprehensive solution set and marketing muscle, is the
biggest brand in the CRM space today, giving it an immediate edge in consideration, across the MB spectrum. Though
not as splashy as salesforce.com, Microsoft CRM, Sage and RightNow are also strong brands in the MB space. These
vendors are enjoying strong growth, and their status as public companies with solid financials and greater name brand
recognition gives them an advantage. Microsoft and Sage also have large partner networks, providing another leg up
onto MB short lists, although they tend to appeal to different types of customers, for different reasons, as shown on
Table 9.
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Table 9: Comparison of MB CRM Brand Leaders

MB CRM Brand Leaders
Vendor
Microsoft CRM
RightNow
Sage
Salesforce.com
MB Strengths
Overall Microsoft
brand
Strong channel and
ISV network
Pre-integration with
Great Plains Dynamics
Choice of on demand
or on premise
Deep service and call
center capabilities
24/7 email support
included in basic support
Strong integration
capabilities
Web services-based
platform
Range of CRM solutions
Choice of on premise
and on demand
Sage CRM available
standalone or preintegrated with ACCPAC suite
Strong channels network
20 standardized integration solutions
Market leader
AppExchange marketplace
Web services-based
platform
Strong developer and
consulting partner
network
MB Weaknesses
On demand solution
not yet available
Lacks pre-integration
with other MBS and
third-party back office
solutions
Lacks brand awareness for SFA consideration

Lacks extensive channels coverage
Lacks turnkey wireless solution
Difficult to position
and market multiple
CRM offerings
Must support multiple
technologies, platforms, versions, etc.
Lacks on premise option

Steep pricing jump
from Team Edition to
Professional Edition
Options/pricing becoming complicated
Best MB Customer Fit

Invested in .NET platform, MBS
back office solutions
In-house IT resources to deploy/
manage
Effective existing relationship with
MBS solutions provider
Larger/more sophisticated customer
Service/call center needs dominate
Wants flexibility to move between
on demand and on premise
Requires voice enablement
Wants direct relationship with
CRM vendor
Currently use Sage back office

solution(s)
Effective existing relationship with
Sage solution provider
Wants pre-integrated front and
back office functionality (Sage
CRM and ACCPAC)
Larger/more sophisticated MB that
wants fully customizable CRM
(SalesLogix)
Requires on demand solution
Because theyre not as well-known as their rivals, MB CRM challengers, as indicated on Table 10, have a tougher
time getting into consideration in the first place. However, with all the attention that vendors and media are lavishing
on the CRM space, MBs are becoming more educated about CRM and their choices. Challengers, as shown in Table
10, often provide customers with very attractive alternatives, offering more aggressive pricing, extra services or other
value-added differentiators to entice customers to their solutions. If challengers strengths map closely to a given
customers requirements, their solutions may provide a better fit than MB CRM leaders.
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Table 10: Comparison of MB CRM Brand Challengers

MB CRM Brand Challengers
Vendor
Entellium
MB Strengths
Maximizer
Software
NetSuite
SugarCRM
32
MB Weaknesses
Simplicity of
deployment and
ease of use
24/7 service
included in subscription price
Affordable
pricing
Affordable
pricing
Solid existing
installed base
Strong
financials
Good channels
coverage
Offers CRM
separately and
in pre-integrated
suite
Broad local
channel reach
via CompUSA
Web servicesbased platform
Choice of on
demand or on
premise
deployment
Open access to
open source
code, plug-in
library
Affordable
pricing leader
Open source
community
sales and
development
Lacks broad
market awareness
Insufficient
channels coverage
Best MB Customer Fit
Lacks broad
market awareness
Lacks SaaS
offering
Has yet to announce wireless

solutions
Lacks broad market awareness in
CRM
Does not provide
on premise alternative
Lacks broad
market awareness
Lacks turnkey
wireless capability
Lacks IT staff
Limited budget for upfront investment
Wants an on demand solution
Requires simplicity
Needs out-of-the box QuickBooks
integration
Needs easy, affordable mobile
solution
Requires an on premise solution
Requires simplicity
Wants CRM tuned to financial
services, hi-tech or real estate
Needs out-of-the box QuickBooks
integration
Needs choice of mobile solutions
Ready/planning to replace legacy

financials/ERP
Wants single system of record
Wants on demand solution
E-commerce is a key business component
Wants CRM tuned to software, services, wholesale/distribution
Needs out-of-the box
Does not have immediate wireless
needs
Familiar with open source/need to
customize (for on premise)
Budget-conscious buyers
Wants open source, on demand
solution
Does not have immediate wireless
needs

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As examined earlier in this report, MB CRM market is still under-penetrated, with plenty of headroom. What do
vendors need to do to accelerate market growth, and expand their own market share? While each vendor
must of course, tailor its approach to its current market position, offerings and strategic direction, all vendors
need to:
Zero in on real MB product and service requirementsas opposed to fancy bells and whistles-as they attempt to differentiate against the competition. SaaS vendors, with their closed loop
customer relationship, can probably do this more efficiently than packaged CRM competitors.
Clearly communicate a unique value proposition. While a couple of vendors have a good shot
at capturing a broad swath of the volume MB CRM market, most will need to carefully position and
focus their sales and marketing energies on their best-fit MB customer segments.
Tune up channel initiatives. The business applications channel landscape has been changing
for a while now, and SaaS, open source, and an expanding array of CRM vendors will continue to
cause changes, and increased competition, for a limited universe of effective partners. Vendors
need to ensure that they are capitalizing on these changes, refreshing programs and partnerships,
and tapping into partnerships that will help them to best tune into their market sweet spots and
overcome their own product and/or go-to-market deficiencies.
Make it easy for MBs to figure out total cost-of-ownership (TCO). Sure, everyone has a
sticker price, but with multiple solutions and service options, and varying infrastructure, IT and
consulting requirements (not to mention confusing Web sites), it can be tough to figure out what
the true price tag is. Appeal to MBs pragmatic nature with visible, transparent pricing and TCO
data.
Strive for on demand integration. MBs are always going to need to integrate CRM with
something else. All vendors (even those that advocate a pre-integrated suite approach) need to
pursue all routes that facilitate integrationpre-built connectors, open APIs, standards-based Web
services--to ease integration obstacles. Vendors that identify, prioritize and develop the most
valuable CRM integration points will have an edge. Those with a crisp integration story that simply
works, and works simply, will win MB hearts and minds.
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Vendor Profiles
Entellium
Date Founded
2000
HQ Locations
Seattle, WA
International location(s)
Western Europe, Asia Pacific and Mexico
Vendor URL
www.entellium.com
Public/Private
Private. Funded by Ignition Partners.
Performance metrics
Target market(s)
100% SaaS.
Delivery Options
CRM Solution Description
Over 200% year-to-year subscriber growth

Less than 7% in churn rate
Businesses with 25-1,000 employees, especially IT resource
constrained mid-market companies.
Entellium targets VPs of sales, service and marketing with a
user effectiveness message during the selling process.
95% of customers are mid-market (defined by Entellium as
cos. with 50 to 1000 employees).
Entellium offers a full-featured modular CRM suite (Sales Force

Automation, Customer Service, Marketing Automation). Core focus: helping mid-market companies acquire more qualified leads
at a lower cost, win more selling opportunities vs. competitors,
keeping their customers happier longer, at a lower cost. Product
areas of focus include user interface, workflow/automation and
embedded analytics.
Entellium suite: $60/user/month.
$50/user/month for individual modules. Entellium has a no contract, pay as you go policy with a minimum of 90 days of service.
Wireless Accessibility
Key Partners
Channel strategy
Future development plans
Entellium eMobile, an extension of Entellium eSalesForce for an

additional $25 per month.
Telcos, with Verizon Wireless as its first partners. Entellium expects to partner with other telcos and SMB brand holders, which
could include major credit holders, software companies and others that have strong brand equity and a large SMB installed base.
70% of its total sales come from direct telesales and the remaining 30% coming from partnerships with telcos and other SMB
brand holders.
Add more telco partners

Look to partner with SMB brand holders
Make its products available in multiple languages
Focus more on verticalizing based upon sales role: inside
sales, major accounts, etc.
Source: AMI-Partners based on information from vendor
34

AMI-Partners
& Solutions

Vendor Profiles
Maximizer Software
Date Founded
1995
HQ Locations
Vancouver, Canada
Americas, Europe/Middle East/Africa (EMEA), and Asia
Vendor URL
www.maximizer.com
Public/Private
Public (Toronto Stock Exchange: MAX)
Performance metrics
170 employees worldwide

7,500 Maximizer Enterprise customers
Over one million Maximizer licenses shipped
$17.5 million in revenues for 2005 and profitable for past three consecutive years
Small offices/Home offices (SOHO), Small businesses and Mid-size businesses
Maximizer Software targets and has large customer bases in the high
tech, real estate, financial services and professional firm verticals
100% customer premise though many customers choose to have the system hosted by Maximizer Softwares business partners to achieve a
hosted deployment
Maximizer 9 CRM solution designed for individuals, home office and
small businesses
Maximizer Enterprise 9 CRM solution designed for small to mid-sided
businesses and divisions of large corporations. Typical implementation
time is approximately 1 week with moderate customization
Maximizer - $299
Max Enterprise W/G CRM - $499
Max Enterprise Client Server CRM - $599
Max Enterprise Client Server eCRM - $799
Partner Portal - $499
Maximizer also offers out-of-the box vertical templates for the financial
services, hi-tech software and real estate industries.
Maximizer 9 can be accessed via Palm PDA synchronization and Maximizer Enterprise 9 can be accessed via wireless online PDA (BlackBerry,
Treo, Pocket PC), and Palm PDA synchronization
Target market(s)
Delivery Options
Key Partners
Channel strategy
Maximizer has more than 400 partners worldwide

Technology partners include Microsoft, Business Objects, RIM /
BlackBerry, Intuit, Pervasive, Vineyarsoft, Palm
Worldwide 32% of revenues from the channel and 68% direct: EMEA
(Europe, Middle East and Africa) is 100% direct.
Maximizer sells through 4 types of business partners:

Certified solution providers
Authorized sales agents
Certified consulting partners
Authorized resellers
Launch version 9.5 of Maximizer Enterprise in Summer of 2006
Enhance portal functionality and deeper integration with Microsoft Office
Release Windows 5 PDA application for Maximizer Enterprise CRM
Build additional brand awareness and publicize customer successes

35

AMI-Partners
& Solutions

Vendor Profiles
Microsoft Business Solutions
HQ Locations
Microsoft Business Solutions established in 2002: MS CRM product

launched in January 2003
Redmond, WA
Worldwide
Vendor URL
www.microsoft.com
Public/Private
Public
Performance metrics
Microsoft does not split out MS CRM revenues; however it does state that
Microsoft Business Solutions (MBS) revenue for Q3 FY 2006 was $216
million; 21% growth y-y. Other MBS data points include:
300K customers
Approximately 10K selling partners
58K registered ISV Partners
Date Founded
Target market(s)
Delivery Options
Microsoft CRM specific metrics:

Over 7,000 customers
Over 180,000 users
Over 1,500 partners
Available in 22 languages
Small and medium businesses and divisions of large enterprises.
Mid-market 50 to 250 seats
SMB sweet spot 50 + seats
90+% customer premise.
Microsoft offers a complete CRM suite that leverages
the Microsoft platform, and includes marketing, sales and customer service.
On-Premise Solutions: license + 1 year of SA
Small Business Edition (SBE): US $440-$499 per user; $528-$599 per
server
Professional Edition: US $622-$880 per user; $1244-$1761 per server
Hosted Solutions: flat rate and not time commitment
Subscription Pricing (price to hosting partner): US $24.95 per month per
subscriber wholesale pricing to service provider (service provider marks
this up for end-user pricing).
Microsoft CRM Mobile is available in all devices that run Windows Mobile.
Key Partners
Over 1,500 active MS CRM partners worldwide including VAR, SI, Hoster,
Reseller and ISV partners.
Hosting partners include major telecoms in Europe and vendors
such as Navisite, Streamline and EchoPass in the U.S.
Total Microsoft Partner Program Numbers (Not CRM specific)
WW
Gold
Certified
Registered
Total
36
7,822
19,355
332,306
359,483
US
2,344
6,645
129,199
138,188

AMI-Partners
& Solutions

Vendor Profiles
Microsoft Business Solutions
Channel strategy
Partner-driven sales in SMB; primarily Microsoft-driven (and partnerassisted) sale in enterprise

MS CRM Go-To-Market Resources include:
100 sales specialist & technical sales specialists
50 marketing program managers
400 account teams covering over 10,000 accounts
450 partner account manager
Planning for 90% growth rate in FY07 & FY08
Next major release (Titan); multi-tenancy, multi-currency, business
intelligence and reporting improvements, data management
(update, purge, migration), improved integration and features with
Office 2007
Roll MS CRM out in China with emphasis on hosting.
Work with VARs and ISVs for industry specific solutions.
37

AMI-Partners
& Solutions

Vendor Profiles
NetSuite
Date Founded
1998
HQ Locations
2955 Campus Drive, Suite 100, San Mateo, CA 94403
Ontario, Canada; Sydney, Australia/New Zealand; United Kingdom; Singapore; Hong Kong; Tokyo, Japan
www.netsuite.com
Vendor URL
Public/Private
Performance metrics
Target market(s)
Delivery Options
38
Private (Investors: Larry Ellison, StarVest Partners L.P., ADP

and UBS). Approximately $100M in investments.
Turned cash-flow positive in February 2004
24 consecutive quarters of growth
Over 7,500 customer accounts
States average new deal size is about $30,000/year
AMI estimates 2005 revenues of $45 million
Size: SMBs (Small=60%, Midsize=40%)
Verticals: Wholesale/distributor, professional business services,
and Software companies
Geographic markets: North America (90%), Europe (10%), and
APAC (less than 1%)
100% SaaS.
Solutions include CRM; order management and fulfillment; inventory management; finance; ecommerce and Website management; and employee productivity.
NetSuite: Flagship product integrates ERP, CRM, e-commerce
and partner collaboration capabilities. Designed for midsize
companies (less than 500 employees). Pricing begins at
$499/month plus $99/ user/month.
NetSuite Small Business: Designed for smaller businesses with
under 20 employees, one complete application that integrates front and back office, managing sales, service, accounting and Web presence. Pricing begins at $99/month
plus $49/user/month.
NetSuite CRM: Includes the traditional CRM capabilities needed
to manage marketing through customer acquisition. Pricing
begins at $79/user/ month.
NetSuite CRM+: NetSuite CRM plus order management, crosssell/up-sell, incentive management, project tracking, analytics, customer portal and partner management. Pricing
begins at $129/user/month
Vertical Editions for: Services, Wholesale/Distribution, and Software Companies.
NetFlex platform: Enables customization and extension of
NetSuite.
SuiteScript platform and toolset: JavaScript-based for flexible business process customization.
Working with two wireless solution vendors, but not yet publicly
announced.

AMI-Partners
& Solutions

Vendor Profiles
NetSuite
Reseller/VAR program: 200+ VARs and boutique firms
such as Clifton Gunderson, (CPA and consulting firm), Skytek Corporation, Initiative One, LSTechnologies. NetSuite
targets classic mid-market VARs, and large enterprise VARs
that want to move into SMB. NetSuite pays active VARs recurring revenue for the life of the contract (roughly 30-45% of
service, depending on volume).
Key Partners
Channel strategy
Partner Referral program: for CPAs and other trusted advisors to small business. NetSuite pays referral partners a
one-time fee based on the annual contract value.
Direct sales and VARs.
Approximately 25% of sales through channels.
Generates most direct sales via friend referrals and search
engine placement.
NetFlex and Suitescript help developers extend and customize NetSuite solutions.
Develop partnerships with payroll service providers.
Add more vertical partners and NetSuite branded vertical
solutions.
Finishing translation engine. Targeting early next year for
release of Chinese and Japanese translation capabilities. (currently available in 7 languages)
Expand channel program, especially in EMEA and APAC.
The Happiest Customers program: Determine happiest
customers and analyze for patterns to refine marketing.
Campaign more aggressively against salesforce.com to
boost consideration.
Focus on providing more robust capabilities and partner capabilities
39

AMI-Partners
& Solutions

Vendor Profiles
RightNow
Date Founded
1997
HQ Locations
40 Enterprise Blvd.
P.O. Box 9300
Bozeman, MT 59718-9300
U.K., Germany, Australia, Japan
Vendor URL
www.rightnow.com
Public/Private
IPO in August 2004 (NASDAQ: RNOW)
Performance metrics
1,500 + customers
Total revenue increased 41%, from $61.8 million in 2004 to
$87.1 million in 2005,
33 consecutive quarters of growth, with bookings growth of
40% in 2005 from 2004 and 71% in Q1'06 over Q1'05
Q1 2006: RightNow formed the backbone of more than 280
million customer interactions, an increase of 69% over
Q1'05. We have now served a total of more than 1.8 billion
customer interactions.
Small, medium and large enterprises
50% customers: less than $1B in revenue
41% customers: more than $1B in revenue
9% customers: government/education
Approx. 90% of new RightNow customers opt for hosted.
Approx. 87% of all customers are hosted.
Customers can move from hosted to on-premise, or vice-versa.
RightNow CRM 7.5: integrated CRM suite includes:
RightNow Service, multi-channel customer service and
support
RightNow Sales, a sales force automation application
RightNow Marketing, a multi-channel marketing automation application
RightNow Voice, portfolio of voice-enabled CRM applications
Target market(s)
Delivery Options
Key Partners
40
Pricing based on modules, users and interactions. Customers

can choose from monthly, term or perpetual license. Average
selling price in Q106 was $140,000
Wireless integration via professional services (e.g. send an
alert to a Blackberry when an inquiry is created).
Partners include: Convergys, West Corporation, ICT Group,
Aspen Systems, KPN. SI partners include: Cambridge Technology Partners, RightAnswers, Sierra Atlantic, TLConsulting,
Working Solutions. SI/VAR partners in EMEA include: Arragon,
BT, Butcher Suter, CapGemini, Datapoint, Deloitte, Dimension
Data, IMNET, Infoco/Unisys, KPN, Javelin Group, Lagan,
Northgate, PA Consulting, Paul Eric, Pearson, Portals, Proffcom, Protein, SNT, Star, Steria, Syntegra, TietoEnator, TWA.
In Japan, RightNow has an extensive reseller relationship with
next COM. In New Zealand, RightNow has an extensive reseller relationship with Datamail.
AMI-Partners
& Solutions

Vendor Profiles
Channel strategy
RightNow
No OEM partners, 90% direct; 10% indirect.
RightNow's Service & Referral Partner Program offers revenue
opportunities for consultants, systems integrators and solutions
providers interested in providing RightNow's solutions to their
customers and/or providing complementary solutions and professional services to RightNow customers.
Outsourced call centers can leverage RightNow solutions to
provide higher-value, lower-cost customer care solutions to
their clients.
Continue to develop solutions that help companies deliver an
improved customer experience while also reducing costs
Continue to develop close ties with call centers/contact centers
to displace legacy vendors (90% of its revenue from call/
contact centers)
Continue to invest in voice recognition technology and solutions.
Integrate Salenet into RightNow suite (recent acquisition)
41

AMI-Partners
& Solutions

Vendor Profiles
Sage
Date Founded
1981
HQ Locations
Newcastle Upon Tyne, United Kingdom
Vendor URL
North America, South America, Australia, Spain, France and Germany

www.sage.com
Public/Private
Public London Stock Exchange (LSE)
Performance metrics
Target market(s)
Delivery Options
25 years of SME focus

5.0 million SME customers
50,000+ corporate CRM business customers
23,000 application solution business partners
Sage Group FY05 Revenues: $1.4 Billion (14% Growth)
Sage Software (N.A.) FY05 Revenues: $584.7 Million (14%
Growth; 41% of Global)
Businesses of all sizes
Sweet spot, 1-1000 employees
90+% customer premise.
The Sage CRM Solutions portfolio includes:
ACT! by Sage
Contact and customer management for individuals, small businesses, functionally defined workgroups and divisions of larger
companies.
Sage CRM / SageCRM.com
Out-of-the-box sales, marketing and support solutions; configurable business process automation. Browser-based interface; available via SaaS and on-premise models.
Sage CRM SalesLogix
Fully customizable development platform provides integrated
sales, marketing and customer service automation solutions for
moderate to highly complex organizations. Sage CRM SalesLogix
ACT! by Sage
Sage CRM
SageCRM.com
Sage CRM SalesLogix
$299 - $399 / User

$595 - $795 / User
$69 / User / Month
$995 - $1095 / User
Sage Migrator: enables ACT! by Sage data migration to Sage

CRM, SageCRM.com and Sage CRM SalesLogix. Also enables
migration from Goldmine to all Sage CRM Solutions; other competitive migration paths are in development.
42

AMI-Partners
& Solutions

Vendor Profiles
Sage
Mobile synchronization to most handhelds as well as full CRM applications on the Blackberry, Windows Mobile Pocket PC, and Windows SmartPhone devices. In addition to its own wireless technology development, Sage works with the Corum Mobile Platform to
develop Sage CRM SalesLogix Mobile capabilities for Pocket PC
and Blackberry and works with J2X to develop ACT! capabilities
with Blackberry.
ACT! Add-on solution with Sprint subscription service: $24.95/
month, $239/year per user
Key Partners
Channel strategy
Sage CRM SalesLogix Mobile for Pocket PC, Blackberry, and

SmartPhones: $395/year per user
23,000 certified Sage business partners worldwide; 60,000 consultants who refer CRM business from the accountancy world.
Sage sells through business partners. Sage believes that the market requires a high touch model and not just a technology enabled
model. Many businesses do not have time or resources to become
experts in CRM and stop their day-to-day activities to concentrate
on deploying a CRM solution. Views the strength of its channel
model and its CRM Solutions business partners CRM expertise as
a key differentiator.
Continue its migration strategy by adding additional competitive

migrators to its Sage CRM Solutions product family.
Continue to offer purpose built, mature solutions that collectively cover the broadest addressable market.
43

AMI-Partners
& Solutions

Vendor Profiles
salesforce.com
Date Founded
HQ Locations
Vendor URL
Public/Private
Performance metrics
Target market(s)
1999
San Francisco, CA
Worldwide
www.salesforce.com
Public (NYSE: CRM)
24,800 customers
501,000 subscribers
FY 2006 revenues of USD $309.9mil, up from FY2005: USD
$176.4mil
1,300 employees
SMB (66% of business) to Large Enterprises: includes Business
Services, Communications & Media, Distribution & retail, Education
& Non-Profit, Energy, Financial Services, Healthcare, Technology,
Manufacturing, Pharmaceuticals & Life Sciences, Real Estate,
Travel & Transportation cos.

SaaS: Sales and partner relationship management, marketing automation, service & support, analytics and data quality management.
Enterprise Edition: For larger/more complex businesses. Supports
multiple divisions and processes, workflow automation, product line
forecasting, revenue allocation. $125/user/month.
Professional Edition: For companies of all sizes. Includes sales
force automation, marketing automation, and customer service and
support. $65/user/month.
Team Edition: For small business. Enables users to view, update
and share information, activities and events in real time from any
Internet-connected computer. $995 for up to 5 users/year.
Unlimited Edition: Offers greater access to AppExchange network
of services, apps, tools and components, spanning CRM-related
solutions to finance, HR and industry-specific applications.
CRM Editions: On-demand, Offline, Wireless, Offline PDA, Outlook,
Office.
AppExchange on demand platform with over 350 AppExchange
applications, 8,600+ installed applications and 122K+ test drive.
44

AMI-Partners
& Solutions

Vendor Profiles
salesforce.com
Offline Edition makes sales and customer information available
on a disconnected laptop. When reconnected to the Internet,
changes are updated.
Offline PDA Edition provides offline Salesforce access via Pocket
PC or Palm OS device
AppExchange Mobile enables mobile access to Salesforce CRM
or AppExhange apps from any mobile devices.
Key Partners
Channel strategy
Salesforce.com has more than 100 partners that distribute their

applications on its AppExchange platform. Over 300 applications
on offer on the applications exchange
States sales are 100% direct, but often jointly sells with:
Solutions partners: for developers to create solutions around
the salesforce.com via Sforce Web services API., Sforce developers, two-tier program.
Consulting partners: partners trained and certified in implementation best practices, and provide complementary technical and business consulting services.
Marketing & Referral Partners: introduce salesforce.com's industry-leading CRM solutions to their customers and earn a
percentage of revenues for referred accounts,
45
Continue its strategy of penetrating larger accounts, but maintain its focus on the SMB market.
Planning to achieve The Billion Dollar Dream
Improving its search platform for marketing using Googles
search technology
Continue to expand internationally

AMI-Partners
& Solutions

Vendor Profiles
SugarCRM
Date Founded
2004
HQ Locations
10050 North Wolfe Road, SW2-130

Cupertino, CA 95014
None
Vendor URL
www.sugarcrm.com
Public/Private
Private.
Secured S Series A & B financing from Draper Fisher Jurvetson
(DFJ). Secured Series Silicon Valley venture capital firm, Walden
International. Raised $26M in funding
70 employees
600 + customers in five quarters of selling
Done 40 Salesforce.com replacements in the last year
120 + partners in more than 30 countries
1.5M downloads
14,000 + project members
4,500 + developers
40+ languages
200 + extension projects
"Companies of all sizes." 5 500 users is primary target, but divisions/departments of larger companies and government agencies
are also target markets.
Performance metrics
Target market(s)
Delivery Options
SaaS (approx. 40% of customers)

On premise (approx. 50-55% of customers)
Appliance (approx. 5% of customers)
CRM solution with distributed, open source (LAMP) product development or full source code availability for all products offered.
Sugar On-Demand is the hosted version of the core CRM application, Sugar Professional.
Sugar On-Demand offers all of the Sugar Sales Professional functionality, complete with online access to the full source code enabling solution customizations.
Key Partners
46
SugarOpen source free, can only be used on premise.

SugarProfessional - $239/user /year on premise, $480/user/
year on demand
SugarEnterprise - $449/user/year on premise, $900/user/year
on demand
SugarForge: location to download new modules, power tools, language packs and more. All created by the Sugar Open Source
community
Offline client synchronization, bi-directional synch with SugarEnterprise
Working with SONA mobile for full wireless client user interface, will be available in a few months.
120 partners in more than 30 countries including U.S., Australia,
Austria, Belgium, Brazil, Canada, Chile, France, Germany, Mexico,
Netherlands, Romania, Spain, U.K.
AMI-Partners
& Solutions

Vendor Profiles
SugarCRM
Channel strategy
Customers can purchase direct via SugarCRM Web site. Inside

sales team answers pre-sales questions.
Launched partner network 11/04. Focused on recruiting partners
that:
Are more technically advanced/skilled
Share OSS strategic vision
Provide implementation, integration capabilities
Provide consulting capabilities
Sugar pays partners commission as percentage of sales.
Developer Zone: helps developers customize SugarCRM, fix
bugs, translate to other languages and/or add new features.
Focus on and refine current partner programs, recruit new

partners, develop training and best practices programs to
help them be successful.
Reach out to different verticals in different ways: financial
services, high tech and government
47

& Solutions
AMI-Partners
Access Markets International (AMI) Partners, Inc.,

Company Profile
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy,

venture capital, and actionable market intelligence focusing on global small and medium
business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with
the highest quality data, business planning and go-to-market solutions. AMI was founded in
1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly a
group vice president at IDC. Since its inception, the firm has built a world-class management
team, each with ten to fifteen years experience in IT, telecom, online communications or
multimedia.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT,
Internet, telecommunications and business services companies over the last ten years. The
firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its
annual retainership services based on global SMB tracking surveys in more than 20 countries;
and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and
Asia-Pacific. The firm invests significantly in collecting survey-based information from several
thousand SMBs annually, and is considered the premier source for global SMB trends and
analysis.
For more information on AMI-Partners or our global SMB surveys, please visit www.amipartners.com, e-mail ask_ami@ami-partners.com or call 212-944-5100.
48

Mid Market CRM - Vendor Strategies For A New Frontier

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Mid Market CRM - Vendor Strategies For A New Frontier

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Mid-Market CRM: Vendor

Strategies for a New

Laurie McCabe, VP SMB Insights

Market Trends Report

Section 1: U.S. Medium Businesses: A Demographic Snapshot

Section 2: U.S. MB CRM Market Dynamics

Section 4: Putting the Mid-Market CRM Playing Field in Context

Section 5: Core Product Offerings and Trends

Section 6: Beyond the Basics--Tapping into Specific Requirements

Section 7: Channel Strategies

Section 8: Summary and Conclusions

Figure 2: U.S. MB Employee Demographics Comparison Across Employee Size

Figure 3: U.S. MB Company Demographics Comparison Across Employee Size

Figure 4: U.S. MB Total CRM Spending Growth

Figure 5: U.S. MB Total CRM Spending Top Four Verticals

Figure 6: Types of CRM Solutions Implemented By Employee Size

Figure 7: U.S. MB Total CRM Spend Forecasts

Table 1: CRM Vendors Definitions of Medium Business and Sweet Spots

Table 2: Comparison of CRM Vendors Market Positioning

Table 3: Comparison of CRM Products and Pricing

Table 4: Comparison of CRM Vendor Service and Support Options

Table 5: Comparison of CRM Vendors Industry Strategy

Table 6: Comparison of CRM Vendor Mobility Capabilities

Table 7: CRM Vendors Integration Strategies/Capabilities

Table 8: Comparison of CRM Vendors Channel Approaches, Partners and