Midmarket Companies Draw CRM Attention - InformationWeek

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Midmarket Companies Draw CRM Attention

Vendors expand industry offerings that require little customization

Midsize companies are the latest target for customer-relationship management software companies. Several vendors are expanding their midmarket offerings, viewed by the industry as having the best potential for growth.

The biggest battle line is between the smaller CRM vendors that have focused on the midmarket in the past and the enterprise-level vendors that have only recently set their sights on it. Vendors such as FrontRange Solutions Inc. and Pivotal Corp. say products from PeopleSoft, SAP, and Siebel Systems are too complex and expensive for companies with annual revenue between $50 million and $500 million.

FrontRange last week introduced GoldMine CustomerIQ, software that's aimed at manufacturers and the wealth-management sector of financial services. CustomerIQ is intended to reduce the amount of time and money companies spend on customization. Additional vertical applications will come later, says FrontRange chief technology officer Raj Patel. Meanwhile, Pivotal unveiled Contact Center, software designed for service representatives at midsize companies.

Sales of CRM applications are down 6% this year compared with last year, according to Gartner, and most large companies already have CRM apps installed. But only 20% of midsize companies have an executive-level CRM strategy. The larger vendors say the market that they're pursuing, businesses in the $200 million to $500 million range, need the technical sophistication and strong services organizations they can offer. SAP next week plans to release an update to its CRM software, including products customized for specific industries to appeal to midmarket companies.

This means business-technology managers have many options. A company expecting to grow from a midsize business into a large one might be better off buying something to "grow into" from the larger companies, says Gartner analyst Joe Outlaw. But the big vendors still have more work to do, he adds, as many midmarket companies find their offerings too difficult to implement and customize.

Jim Searles, senior VP of professional development and product management at D.A. Davidson & Co., a $100 million-a-year investment brokerage, says companies his size want to do as little customization as possible. He's an early adopter of CustomerIQ and worked with FrontRange to develop the wealth-management version. Says Searles, "It's specific to our industry, and the things we can customize will be very easy for our IT people."

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