Can SAP Catch Up in On-Demand CRM? - InformationWeek

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Can SAP Catch Up in On-Demand CRM?

When SAP AG announced it was unveiling an on-demand customer relationship management (CRM) option, it meant we would finally see a head-to-head battle in hosted CRM between SAP and Oracle, which purchased Siebel and its CRM OnDemand last fall. But both enterprise software behemoths are playing catch-up to Salesforce.com.

When SAP AG announced it was unveiling an on-demand customer relationship management (CRM) option, it meant we would finally see a head-to-head battle in hosted CRM between SAP and Oracle, which purchased Siebel and its CRM OnDemand last fall. But both enterprise software behemoths are playing catch-up to Salesforce.com. Even with its CRM OnDemand entering Release 9, Siebel has had moderate success at best with the on-demand offering, and has barely put a dent in Salesforce.com's sales.

[ THE Q.T. ]
Word is another prominent BI analyst is following ex-Gartner analyst Howard Dresner's path and joining a vendor. Rivals are grumbling they'll have to think twice before sharing long-range plans with analysts.

The prospects for these two CRM hosting newcomers are iffy. It's too early to tell if SAP's new solution will be successful, but industry guru Gary Lemke, publisher of CRMAdvocate, has his doubts. "I just don't think offering on-demand solutions is in SAP's DNA," he says. "They are all about big, enterprise applications that take massive resources to install. That is not the on-demand model."

As SAP describes the product, however, it's clear that it's not intended so much as an alternative to its on-premises CRM as it is an entry point. "A hosted, Web-based solution built on the mySAP CRM platform," the company explains, "can help jump-start your CRM project. You can ... move seamlessly to mySAP CRM as your needs evolve, without costly downtime, rework and loss of data."

According to Gartner analyst Robert Desisto, SAP's version of the multitenant model — critical for a vendor to roll out new releases quickly — is somewhat unusual in that it "pushes" versions of software to a shared hardware model with a dedicated database for each customer. "SAP's approach improves the perception of security but does not guarantee improved security or performance over traditional on-demand vendors," says Desisto. "Security and performance improvements can be proved only through customer implementations over time."

Oracle's acquisition of Siebel backs CRM OnDemand with deeper R&D pockets, giving the database giant a big head start in the race against SAP and an immediate ability to compete head-to-head with Salesforce.com. In the near term, however, Forrester Research analyst Liz Herbert argues that Oracle will likely struggle with transitional problems, including losing talent and key relationships, merging architectures across its multitude of products and migrating Siebel CRM OnDemand to an Oracle architecture.

Salesforce.com has had its own challenges, including system outages that caused its hosted apps to be unavailable for five hours in December and for more than one hour twice in February. But Lemke argues that on-premise software may be just as unreliable, if not more so. Salesforce.com also seems to be on to something with its AppExchange, an on-demand application sharing service that provides Salesforce.com-compatible apps that help users get the most out of the data their company has tied up in the hosted app. "There is always a need to have access or present information from back office systems," says Lemke. "And CRM — hosted or in-house — is a great home for analytics, to better understand markets and customers."

— Jeff Morris

[ KEY PERFORMANCE INDICATORS ]
Google Desktop Search

First the Electronic Frontier Foundation and Gartner called Google Desktop's "Search Across Computers" feature a security risk and advised corporate administrators to turn it off. Then a Google product manager echoed the warning. The feature automatically stores copies of data on multiple computers. Google Desktop 3 for Enterprises lets an admin disable the feature.
Data Backup and Archiving

The good news is we're better than the Brits at backup, according to surveys conducted in the U.S. and U.K. by BridgeHead Software. The bad news: We're only slightly better, and both countries back up (for recovery) when they should archive (for retention). The study found 28 percent of U.K. companies do not archive data, while 23 percent of U.S. companies fail to archive information.
IT Wages Up

Hourly wages for highly skilled technology professionals hit record levels in the fourth quarter of 2005, according to the Yoh Index of Technology Wages. Wages increased 3.1 percent overall, compared with Q4 2004. Among the highest paid were SAP functional consultants ($75 per hour), data warehouse architects ($69 an hour) and CRM project managers ($62 per hour).

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