Your CRM tech TL;DR thoughts for 2018
- Summary:
- There was a LOT going on in the CRM market during 2017. Most of it seemed peripheral or tangential but that disguises progress hinting at an exciting interesting 2018.
According to Gartner, CRM generated revenues of around $36 billion in 2017. That figure includes cloud fees, implementation, and training. But with the SaaS paradigm, you might also want to factor in more. Cloud companies have become adept at charging up front for future use and carrying the money in various ways, sometimes recognized as money in the bank or under contract. Different companies have done things a bit differently, which is one reason that new accounting standards ASC 606 and IFRS 15, 16 kicked in on January 1 for many businesses but not all. It will be fun to dissect the next raft of earnings statements...
What I saw in 2017 was significant and diffuse. Here are some notable ideas and thoughts for the near future, based upon the most recent past.
Oracle became a full player in the cloud. Finally.
The financial success of their infrastructure, platform, and cloud applications was the final step to prominence and that has been happening throughout 2017. You can’t help but think of their earnings calls as a party because there was so much good news to report. Ahead for Oracle is the Herculean task of getting the legacy base of more than 400,000 companies, to convert to the cloud and stay in the family. Early indications are good but there’s always some low hanging fruit to grab, which happened this year. 2018 will be an important measure of Oracle’s ability to attract its legacy customers to their brand of the cloud. So far the company seems to be doing many things right and raising customer optimism.
CRM will always be a work in progress
I think the day for a new vendor to emerge offering a full suite has passed. In 2017, I noticed some upstarts claiming that all CRM’s suck, as justification for throwing their hats into the ring, but really? I think the market’s at a point where it will continue to grow and to squeeze some players out. Entrepreneurs that want to grab some CRM upside will be smart to align with a platform and a vendor. This is happening already. Salesforce celebrated its 5 millionth AppExchange download in 2017 as an example. It was 2 million in 2013, so the 2017 number is saying something important. Partners moving to platforms will further consolidate the field of CRM companies. Recall a few years ago when we were wondering which new smartphones would survive. The consensus was the vendors with the biggest ecosystems. You know how that turned out.
Credible VR is making a debut in field service...and everywhere else.
In the field service arena, giving people goggles is making it possible for experts to see first hand what’s going on and to help out if needed, avoiding a second expensive service call. There will be additional apps for VR, especially in retail but also in manufacturing. All this calls for even more processing power and greater network bandwidth. See Moore’s Law below for more.
Blockchain everywhere?
There’s been plenty of activity in blockchain with Oracle, IBM, SAP, and others dipping their toes in the digital waters. Good apps are sure to follow and I have spoken with early-stage startups that have big plans and cash. So look for significant activity in BC probably beginning with security.
At the same time, BC is tethered to a losing proposition called crypto-currency. It’s ironic that such a potentially valuable technology could arise from such sketchy activity as crypto-currency. I expect to get more mail on this complaining that I don’t understand this or that about bubbles and Ponzi schemes. But I’m sure the mail will stop after the Bitcoin crash.
Regardless, BC is the salient of an economic move toward decentralization that could upend a few apple carts in the year ahead. Watch this space.
IoT is a real thing that grew out of CRM
I expect a divergence or split between CRM and IoT soon. It seems logical to have one universe that deals with people and one that deals with machines. The big CRM vendors could spin off wholly owned subs that would enable faster innovation because each could attend to their respective knitting. Dealing with people who are customers is very different from dealing with machines so there’s some logic to this. Parent companies can keep eyes and ears in both camps and possibly give more freedom of action to both. It’s only going to get more complicated and now’s a good time to make the shift.
Vertical industry CRM gets my vote for most important innovation.
Of course, verticals have been around for a while, in fact, going all the way back to Siebel Systems which had about 22 of them. But old vertical CRM was ponderous and monolithic and suffered from not having access to important add-ons like social media, analytics, machine learning, and mobility. New verticals have all this and that’s why they made an important re-emergence in 2017.
There’s more to come, especially because I think the generic CRM suite is again getting too big to buy and use. I think the suite approach will need some trimming to afford greater specialization and simplification. So splitting off IoT and focusing more on verticals are two ways to consolidate without paring muscle.
2017 was Salesforce’s year of Einstein
Speaking of analytics, and someone always is, 2017 was Salesforce’s year of Einstein, in which it incorporated its AI Cloud into all the others. That gave every cloud the ability to use next best algorithms plus machine learning. The result has been smarter apps and better business processes, even automated business processes that are qualitatively different from before. Process automation will continue as fast as vendors can deliver the tools. Of course, processes are tied directly to vertical market plays and IoT.
Bot-mania
AI and machine learning naturally lead to a discussion of bots. They’re coming here! Bots are automating processes by removing or taking over mindless tasks and in doing so they’re enriching customer experiences. The category is new-ish with a long life ahead if…if Moore’s Law cooperates. We’re going to need more processing speed to do natural language processing at scale. Will the CPU speed be there? Maybe.
Moore's Law?
There are two schools of thought on Moore’s Law. The first says everything’s fine and transistors can still get smaller. It also says that mobile devices are a generation or so behind cutting-edge server technology. Who cares that a cell phone will someday offer a room heating app? (Ooops - the other Den's already does.) The second group says there’s only so much real estate on a chip and smaller components mean a greater chance of electron tunneling which is what it sounds like. Its effect is that circuits don’t always do what they’re supposed to.
But back to bots and analytics. Some experts are suggesting that if when Moore’s Law falls over, the logical next step to continue along the price/performance curve might be to assign whole chips to specific tasks like running a popular algorithm. Graphics chips are an example of that strategy in operation. But it’s hard to think of naming your company after the Next Best algorithm.
Partner ecosystems
2017 was a big year for partner ecosystems. As noted, Salesforce’s AppExchange celebrated its 5,000,000th download. Not for nothing, but business apps are quite a bit different from games. Just making a point.
Partner apps will fuel cloud growth from here on. It’s hard to see how you can continue selling relatively generic CRM without differentiation in a market that’s getting full. This goes back to verticals. No single CRM provider can afford to go deep into many verticals so partners will have to carry that load and it will be lucrative. My question is why more CRM vendors aren’t being more aggressive there.
Of course, there’s more. 2017 was a great year for CRM and we’ll recall it fondly until next year at this time when 2018 will look even better.