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SugarCRM becomes the core of IBM's next-generation CRM
 

SugarCRM becomes the core of IBM's next-generation CRM

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Summary
At SugarCRM's SugarCon 2012, IBM's VP of sales transformation, Gary Burnette, gave a
presentation about IBM moving to "social selling", a move that will dramatically change its selling
process. The new sales approach requires a new CRM infrastructure, which does not yet have an
official label, but has at its core SugarCRM along with a plethora of IBM technologies. Something
that was not mentioned, but came out after a direct question from Ovum, is that this nextgeneration
CRM infrastructure will over time displace the incumbent CRM product Siebel. Doing a
migration, even over time, of an enterprise application used by tens of thousands of sales
representatives worldwide is a non-trivial exercise.
What is just as interesting is that this major move is happening below the regular news radar, with
neither IBM nor SugarCRM doing the usual press and analyst outreach. However, as the
implementation progresses, we expect IBM and SugarCRM to do this once they have proof points
on business results and technology advances. For now, IBM is in the critical transition period of
replacing a system from one major partner with that of another.

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    SugarCRM becomes the core of IBM's next-generation CRM SugarCRM becomes the core of IBM's next-generation CRM Document Transcript

    • OVUM OPINIONSugarCRM becomes the coreof IBMs next-generation CRM Reference Code: OI00125-027 Publication Date: May 2012 Author: Carter LusherOVUM VIEWSummary At SugarCRMs SugarCon 2012, IBMs VP of sales transformation, Gary Burnette, gave a presentation about IBM moving to "social selling", a move that will dramatically change its selling process. The new sales approach requires a new CRM infrastructure, which does not yet have an official label, but has at its core SugarCRM along with a plethora of IBM technologies. Something that was not mentioned, but came out after a direct question from Ovum, is that this next- generation CRM infrastructure will over time displace the incumbent CRM product Siebel. Doing a migration, even over time, of an enterprise application used by tens of thousands of sales representatives worldwide is a non-trivial exercise. What is just as interesting is that this major move is happening below the regular news radar, with neither IBM nor SugarCRM doing the usual press and analyst outreach. However, as the implementation progresses, we expect IBM and SugarCRM to do this once they have proof points on business results and technology advances. For now, IBM is in the critical transition period of replacing a system from one major partner with that of another.IBM adopts social selling IBM has a number of internal transformation projects under way, all of which have been brought into the CIOs office. One very significant transformation is the move away from a traditional sales approach of micro-managing the sales representatives, toward "social selling”, which leverages a variety of technologies, social and otherwise. When IBM started developing this next-generation selling method, the team was not focused on "social" but instead on dramatically increasing theSugarCRM becomes the core of IBMs next-generation CRM (OI00125-027)© Ovum (Published 05/2012) Page 1This report is a licensed product and is not to be photocopied
    • productivity of the sales team. As IBM looked at the challenges of a typical sales team member, a variety of issues surfaced that began pointing toward using social, collaboration, analytics, and other technologies and applications, not only to increase the efficiency of sales representatives, but also to enhance internal collaboration as well as external conversations. Any transition of this significance will require a refresh of the supporting CRM infrastructure, which often means displacing the existing system. This will result in an opportunity for smaller vendors with a disruptive approach, be it speed of innovation, technology used, deployment options offered, or business model, to win the business. At IBM, going with the emerging social-selling idea means creating a new CRM infrastructure using many parts of its portfolio of organic and acquired applications and technologies, but having SugarCRM at its core. There is already a high level of familiarity between IBM and SugarCRM, in part due to the work done in the last two years in the context of IBMs Global Alliances Partnership. However, a transition of this magnitude is never undertaken lightly and will take years to complete.Implications for SugarCRM Becoming the core of IBMs new internal CRM platform is a huge win and challenge for SugarCRM. Because the new CRM will be rolled out to tens of thousands of users worldwide it means gaining validation as "large-enterprise-ready". Naturally, this is a major deal that will add to SugarCRMs top line. The win also means a potential new revenue stream as SugarCRM is included as part of a productized offering. The challenges for SugarCRM are that it takes the IBM partnership to a much higher level with significantly more at stake. Its a huge deal that raises the expectations of investors. Tens of thousands of deployments, even over years, will be complex, and SugarCRM will be receiving much deeper scrutiny from skeptical and experienced IT and business professionals at large enterprises and public sector organizations.Recommendations for enterprise and public sector IT While still a nascent concept and not yet productized, enterprises and public sector organizations looking for a new approach for taking their relationships with customers and constituents to a higher level should engage IBM in conversation. The outcome in the short term would not necessarily be to buy anything, but to use the insights for long-term IT and CRM strategies and planning.SugarCRM becomes the core of IBMs next-generation CRM (OI00125-027)© Ovum (Published 05/2012) Page 2This report is a licensed product and is not to be photocopied
    • Large enterprise and public sector organizations with a CRM procurement project under way or planned should definitely include SugarCRM on the vendor long list for evaluation along with other vendors they are considering.SugarCRM becomes the core of IBMs next-generation CRM (OI00125-027)© Ovum (Published 05/2012) Page 3This report is a licensed product and is not to be photocopied
    • APPENDIXAsk an analyst Ovum clients are encouraged to set up phone-based inquiries to talk with analysts about the implications of IBMs move to social selling and SugarCRM enhanced status of large enterprise ready to their ongoing CRM planning, procurement projects, and IT strategy and plans.Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the publisher, Ovum (an Informa business). The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions, and recommendations that Ovum delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Ovum can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.SugarCRM becomes the core of IBMs next-generation CRM (OI00125-027)© Ovum (Published 05/2012) Page 4This report is a licensed product and is not to be photocopied