However, founder and CEO of hosted CRM supplier RightNow Technologies Inc, Greg Gianforte, rejected the criticism and SAP’s approach, suggesting that it represents an attempt to save an outmoded way of operating. Chopping its application up into bite-sized pieces is not going to save SAP’s bacon because they still insist that all elements have to be used with its costly and impractical NetWeaver platform, negating the flexibility of choosing which applications to run, he said. Maybe this complex, technology approach to CRM is why SAP has more than 3,000 customers but only 1,000 that are live.
He added: As for hosted CRM companies being dismissed as commodity CRM, what can I say? I agree that at the low end where Salesforce.com plays, selling to very small companies, the market is commoditizing. But at RightNow, 30%-40% of our revenues come from companies with greater that $1bn in revenue – definitely not small fry. And as for questions around scalability, maybe I should invite Mr Leiner to our numerous data centers which have delivered over 1 billion customer interactions worldwide. He is just not facing the facts, hosted delivery is the future of enterprise software.
SAP recently acknowledged the importance of the hosted model and said it is planning to launch a hosted CRM service. Timescales and details are absent, raising the question over whether CEO Henning Kagermann released the news at the most recent SAP earnings call as a place-holder in order to prevent its customers from straying while it got its own hosted plans in order.
Predictably, the battle lines between traditional software vendors like SAP and hosted service providers like RightNow have been strengthening for some time, but there is a new front emerging as hosted vendors act to build their profile at the expense of their peers. Market acceptance of the hosted model has moved on so that where it was a clear case of hosted versus on-premise, hosted suppliers are now playing up their strengths in order to undermine other hosted players, specifically market leader Salesforce.com.
Although he disagrees with SAP’s CRM and applications stance, Gianforte aligns with the German giant in maintaining that Salesforce.com is a commodity CRM provider, something Salesforce.com would roundly disagree with.
Meanwhile, hosted business applications suite provider NetSuite Inc has taken to publicizing new customers who have ousted Salesforce.com in favor of NetSuite, often citing lack of flexibility in Salesforce.com’s offering according to NetSuite’s Craig Sullivan, combined with the pull of having all data located within one integrated NetSuite system. The company said over 100 companies have switched from Salesforce.com and other legacy accounting applications such as Intacct, Great Plains, QuickBooks, and Peachtree.
