A little over a decade ago, pundits were outspoken in their opinion that neither Salesforce nor Microsoft Dynamics could ever replace enterprise sales automation products from the likes of Siebel, PeopleSoft (Oracle), IBM or SAP. But times sure have changed.
Today, David has truly become Goliath. Starting in 1999 as a fledgling software company focusing on the SMB market, Salesforce is now a $55 billion business that has taken the world by storm. As Salesforce focuses on becoming the largest enterprise software company in the world, and MS Dynamics looks to reinvent itself with Microsoft's launch of Dynamics 365, one thing is for certain: the customer relationship management space has gotten a lot more interesting. It leads me to wonder -- is there room for a new generation of CRM software vendors?
Curious, I reached out to some rising stars to hear their thoughts about CRM software today and its future. For full disclosure, Insightly, ProsperWorks, Base CRM and Pipedrive are CRM platforms that integrate with my company's all-in-one documentation software.
Technology Trends Projected to Impact CRM
When I asked the leaders of these companies what technology trends might impact the CRM market in the future, their answers weren't as varied as one might imagine. They're each from very different organizations, and the alignment of their thoughts makes a very strong case that CRM is headed in an interesting direction.
Anthony Smith, CEO of Insightly, said, "The days of CRM being just a database for input are coming to a close as consumers want software to do more and more for them. In the upcoming years, CRMs will almost need to think and take action for their users."
Building on this notion, Jon Lee, CEO of ProsperWorks, talked about two big trends on the horizon: the proliferation of artificial intelligence (AI) and the consumerization of enterprise software.
"Today's CRM is adept at storing, tracking and analyzing a wealth of customer data, although the end user still needs to take strategic action to get the most of it. As AI evolves, we're going to start seeing the emergence of truly intelligent CRM software."
Uzi Shmilovici, CEO of Base, echoed these thoughts.
"In the next five years, the CRM market will be impacted by the consumerization of enterprise software. Sales reps will demand more from their enterprise software and expect it to meet the standards of the consumer software they use on a daily basis."
Timo Rein, president and co-founder of Pipedrive, agreed that AI and big data, which we already use in some way, will be used even more in the future. But he also noted that the differentiation between providers, the "platformization" by providers, and the never-ending goal of UX perfection will continue to be at the forefront of the CRM evolution.
Given that all four experts place a definite emphasis on user experience and artificial intelligence, it's clear that the evolution of CRM sits within this space. There's no doubt in my mind that the devices and software we use in our work environments will soon be dramatically different than they are today.
AI's Role in CRM
Digging a little deeper, I asked if consumer companies that own data will deepen their AI expertise and enter the CRM market in the next five years.
Smith said that a CRM would be a nice extension to Google Apps, but he doesn't readily see a CRM play for Amazon or Facebook.
"I personally think that if these companies do enter the CRM space, it will likely be through acquisition rather than a newly-developed offering."
Lee seemed to agree.
"There's no doubt that companies that either own pertinent customer data or specialize in AI will begin making moves in CRM. Two recent examples are Salesforce's ongoing push in the AI space, including its recent acquisition of AI startup MetaMind and Microsoft's purchase of LinkedIn, which will surely benefit Microsoft's Dynamics CRM."
Shmilovici explained what this appeal is.
"As the CRM market continues to heat up, the opportunity will become more and more appealing for companies with access to large sets of data [to enter the CRM market]. With any good opportunity, there will be multiple companies trying to seize the market."
Rein explained, "Salesforce's attempt to purchase LinkedIn and Microsoft's intended use of LinkedIn data in Microsoft Dynamics point to the value of data and its importance to AI technology. Owning that data allows customers to benefit, so there are advantages. It is conceivable that Google, Amazon or Facebook would enter the CRM market. If they do, they will likely align with their existing customer base."
It's hard to say for certain if consumer software companies will enter the enterprise space. We are seeing some signs of this already, though, as Google is one of my company's integration partners.
What is certain, however, is that the tech economy has been built on innovators and disruptors. It's a place where the new becomes the status quo, only to be replaced by something newer, smarter and cooler. The Davids outpace the Goliaths, and at some point, become Goliaths themselves -- only to become disrupted by new Davids. It's a vicious cycle, but it's also one that keeps us on our toes and innovating.
With that, it's clear that innovation will continue in the world of CRM. The CEOs of the fledgling CRM dynasties above have their fingers placed firmly on the pulse of the market. What's really interesting is how market leaders such as Salesforce, SAP and Oracle will respond. Will one of our CRM newcomers be the next big acquisition? Or are we looking at a future Goliath?
Only time will tell.
Mikita Mikado is a software engineer, entrepreneur, co-founder and CEO of PandaDoc, makers of all-in-one software for better quotes, proposals, and contracts.