TripleTree  CRM
Upcoming SlideShare
Loading in...5
×
 

TripleTree CRM

on

  • 1,856 views

 

Statistics

Views

Total Views
1,856
Views on SlideShare
1,856
Embed Views
0

Actions

Likes
2
Downloads
58
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

TripleTree  CRM TripleTree CRM Document Transcript

  • SaleS, Marketing and Service convergence: HOW SAAS ECOSYSTEMS AND COLLABORATION TOOLS ARE REDEFINING CRM a tripletree industry analysis SPotligHt rePort WWW.triPle-tree.coM 7601 France ave S, Ste 150, MinneaPoliS, Mn 55435 12526 HigH BlUFF dr, Ste 300, San diego, ca 92130 952.253.5300
  • TABLE OF CONTENTS INTRODUCTION 2 EXECUTIVE SUMMARY 3 WHY CONVERGENCE IS HAPPENING 4 ECOSYSTEMS 6 COLLABORATION 10 IT – SHIFTING MARKETING FROM ART TO SCIENCE 14 MARKETING AUTOMATION 16 THE CHANGING ROLE OF PROFESSIONAL SERVICES 18 CONCLUSIONS 21 APPENDIX 24 TripleTree, LLC 7601 France Avenue South Suite 150 THE TRIPLETREE TEAM 26 Minneapolis, MN 55435 Minneapolis t 952.253.5300 f 952.253.5301 San Diego t 858.792.3406 f 858.792.3407 www.triple-tree.com MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 1
  • INTRODUCTION Organizations are no longer making independent departmental decisions about how to best serve their clients. Driven by a range of compliance benchmarks, organizations have become aware of customer information silos. The result is that they are now internally focused on their varied customer touch points and where sales, marketing and service workflows and processes intersect. Externally, the impact of consumerism and the success of Internet communities are redefining how customer and business experiences can be managed. TripleTree is fanatical about understanding unique delivery models and how they can create value for emerging companies. Few domains are being impacted by innovative delivery models more than Customer Relationship Management (CRM). Thanks to this innovation, critical customer and business information can be shared, and performance can be measured by simple, powerful, common systems that are engineered to automate customer facing workflows. We’re convinced that the Software as a Service (SaaS) delivery model is a catalyst for the next generation of CRM. As the micro-disciplines of CRM link with Web 2.0 tools (specifically collaboration solutions), we believe Business Relationship Management could become a more meaningful description of the technologies and processes that mesh to frame the customer experience. For emerging vendors in the midst of this transformation, SaaS will create value for its investors because of the well known benefits of recurring revenue streams and lower costs of innovation. However, these firms will need to align with platform partners who can provide the infrastructure and logic around other core business components to truly emerge as leaders. This report reviews: - how the silos around sales, marketing and service are being torn down because of SaaS; - where leading vendor ecosystems are rationalizing new technology platforms that can impact CRM; - where Web 2.0 and collaboration tools are becoming competitive differentiators for CRM vendors; and - how the role of professional services is changing as SaaS proliferates. For more on how TripleTree is helping growth businesses with TripleTree continues to work with terrific firms seeking their next plateau of investment banking, strategic growth while also advising global acquirers on ways they can remain opportunistic capital and long term advisory as new competitors enter the landscape. If your organization could benefit from services, please visit our website our thinking and support regarding investment banking or strategic advisory at www.triple-tree.com. services, please contact us. PAGE 2 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • EXECUTIVE SUMMARY Application functionality is demand-driven, not supply-driven. Workflows for IT, executive and knowledge workers are converging and the enterprise applications that were engineered for yesterday’s processes aren’t keeping up. Ten years ago legacy ERP, HCM, CRM and other enterprise functionalities were designed and built around silos and departments – and for the most part these solutions haven’t changed. Workflows today are broadly defined relative to their domain or industry vertical. For CRM, they refer to a set of related end-to- end business processes that produce a specific product or service that enhances customer value. Because more of today’s workflows and processes are both cross- departmental and may extend outside of an organization, the ways in which co- workers can collaborate to support these processes can be erratic – leading to unstructured, (or worse) undocumented activities. CRM software suites have automated many of the business processes which tie together sales, marketing and customer service functions and their accompanying workflows and activities. While much was accomplished by legacy CRM vendors, new and meaningful evidence of a convergence between key micro-disciplines within sales, marketing and service is emerging. This is buoyed in large part by the need for users to share information and the explosive growth of the SaaS (or “on-demand”) delivery model. SaaS is proving to be an effective mechanism for building and aligning the tools necessary to facilitate inter-departmental collaboration and to alleviate some of the pain associated with change management and re-implementation of legacy software solutions. TripleTree’s perspective on the disruptive nature of SaaS is based on several emerging trends: The capital markets have recognized the growth (both in terms of user adoption and • Ecosystems have formed around a handful of technology and business services revenue) and business benefits of SaaS, firms. These are most often technical at their foundation, but the need for eight and are associating a premium valuation (see page 9) “core” financial and operational components are becoming evident. with vendors who can demonstrate the • Collaboration technologies are tying together disparate workers to share ability to clearly track and optimize information and better serve customers. In addition, they’re redefining vertical customer acquisition and loyalty. For solutions and business platforms upon which new applications can be developed, shared and marketed. these businesses, the options for gaining scale are numerous, however fast growth • CIO’s are finally coming around to the reality that SaaS-based applications can alone doesn’t denote value creation. benefit most departments within their organizations. Many Web 2.0 tools are moving too quickly for IT to support in a traditional manner, yet the CIO and the team have a role to play as customer data is shared and analyzed. Positioning, messaging, pricing, a keen focus on adoption and relevant partnering • Vertical applications are increasingly relevant, especially in sectors like all have a role in the strategic thinking of healthcare or domains like compliance. The information needs and converging workflows around data quality and content sharing are critical elements of CRM vendors offering a SaaS delivery compliance and user satisfaction and are becoming increasingly intertwined. model. This, coupled with the rapid pace of innovation around SaaS, should spur • Marketing automation is emerging as the hub around which many customer – emerging vendors to identify and become facing applications will orbit. In addition, traditional linkages that marketing has with sales and service are growing stronger and new linkages with finance quickly visible within an ecosystem and and HR are forming. to simultaneously leverage a collaboration tool set to remain disruptive and become part of a platform solution. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 3
  • WHY CONVERGENCE IS HAPPENING Convergence within CRM is becoming top-of-mind because the differences between sales, marketing and service are narrowing, the related business processes are becoming more integrated, and the value of customer retention is hyper- appreciated. The history of on-demand CRM grew from point-based solutions addressing specific customer needs into burgeoning functionality and broader product suites. At its worst, licensed CRM software deployments littered the IT landscape with abysmal shelf-ware stories and an underserved small and mid-sized business (SMB) market. However, as on-demand CRM took flight in 2001, good-enough functionality and affordable pricing drove high user adoption and were early signs of a broad trend in how application functionality could evolve and perpetually innovate. SaaS pioneers like Salesforce.com and Salesnet anchored broad on-demand sales functionality and RightNow emerged as a leader in services. However, marketing has been left behind. Vendors like Unica and Aprimo represent on-premise software solutions that do not necessarily offer best-in-class functionality across the wide range of needs confronting most marketing roles. It’s because of the continued growth of sales and service, and the promise of marketing that CRM remains a “top five” growth category among the two dozen SaaS domains and verticals tracked by TripleTree (for a complete list of these domains and verticals, see TripleTree’s SaaS Update Spotlight Report, September 2006). Currently over 300 firms offer CRM solutions delivered via SaaS, but as collaboration tools mature and vertical specialization takes hold, TripleTree believes this number could double by late 2009. One reason for this growth is that the influence of collaboration tools on business relationship management solutions is influencing how vendor ecosystems are forming. Encouraged by hot capital markets and the lack of competitive fervor from legacy software firms, ISVs are attempting to broaden their functionality by joining ecosystems in the hopes About TripleTree’s Sector-Q of building market awareness and client uptake. Also spurred by the enthusiasm of Diagram on Page 5: ISVs to “join their family,” ecosystem leaders are scurrying to amass core business functions. Borrowing from the old adage “membership has its privileges” is a reasonable portrayal of how member ISVs will view these coordinated functions In 2005, TripleTree established a as ecosystems mature into more stable sales and delivery platforms. graphical representation for mapping markets and sectors as its Sector-Q As shown in Figure 1 on page 5, licensed or packaged CRM is no longer a “high diagram (trademark of TripleTree) and growth” component of the enterprise applications sector as we project it to grow schema. Originally designed to support at 3.1% CAGR through 2011. In contrast, TripleTree is projecting strong growth client advisory assignments, the Sector- for SaaS-based CRM solutions and professional services at 54.7% CAGR through Q diagrams now encompasses 15 2011. A number of factors influence these estimates: an expected strong rate of versions covering a range of domains venture capital investment continuing in CRM; growth and proliferation of open source CRM; growth of enterprise-class SaaS CRM deployments; broad and deep and verticals and have become integral penetration of the SMB market; and an evolution of collaboration-inspired CRM to our research agenda. solutions. Thus, by 2011 we estimate that spending on SaaS applications and MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 PAGE 4 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • professional services will comprise over 50% of the overall CRM market (or approximately $8.4B). Figure 1: CRM Sector Revenue Forecast: SaaS vs. Packaged/Licensed (in $ millions) $18,000 51% $16,000 SaaS Delivered Growth 50% $14,000 Estimated CAGR = 54.7% 39% 40% $12,000 $10,000 30% $8,000 28% 20% $6,000 20% $4,000 Packaged Software Growth 12% Estimated CAGR = 3.1% 10% $2,000 $0 0% 2006-2007 2008 2009 2010 2011 SaaS-delivered CRM (includes subscription revenues for sales, marketing and service disciplines and SaaS-specialized professional - services). Packaged CRM Software (also includes maintenance and professional services revenues related to packaged software implementations). n n SaaS-delivered CRM revenue growth as a percentage of the overall CRM sector. Source: TripleTree, LLC & Industry Sources Driving the growth in Figure 1, TripleTree’s proprietary database contains qualitative and quantitative rankings of over 300 firms offering CRM solutions via SaaS (TripleTree’s overall SaaS database now exceeds 1,100 firms). Using our proprietary Sector-Q market map, TripleTree has identified approximately 80 micro-disciplines within sales, marketing and service (See Figure 2) that are impacted by SaaS vendors and professional services firms focused on SaaS. The Sector-Q is a framework used by TripleTree when advising business builders on how value can be quantified and strategic alternatives assessed. Figure 2: TripleTree’s Sector-Q for Customer Relationship Management Live Customer Chat & Voice & Web Self- Self- Product & Service Service Delivery Support Service Interaction Presence Service Training Standards Community Platforms CSR Unified Mgmt VOIP Account Management Desktop Remote Contact Center Agents Outsourced Contact Center Sales Analytics & Reporting Customer Service Portals / Microsites e-Commerce & Order Management Sales Customer Asst’d. Product Dev. Incentive Compensation Inbound Communication Order Processing Team Performance Dashboards Contact Center Human Capital & Performance Management Life-Cycle Management Sales Coaching & Training Technical Support Sales Operations Negotiations & Contract Management Performance Management Case Management Configuration Management Proposal & Quote Management Internal Communication Mobility Solutions / Dispatch Field Service Management Mobile Sales Case Resolution / Reporting Presentation Generators Applications Forecasting Account Preparation Customer Service Analytics Channel Management Enterprise Feedback Management RFP Response and Pursuit Customer Experience Management Opportunity Management Territory Management Data Assessment Customer Data Hub Web Site Analytics Lead Conversion Analytics Partner Feedback Management Marketing Analytics & Econometrics Multi-Channel Sales Development Product Management Prospecting/Contact Management Product Engineering and Launch Promotional Competitive Market Analytics Management Lead Management Unstructured Data Analytics Lead Qualifications & Scoring Lead Development Outsourcing Planning and Strategy Privacy Management Marketing Planning and Calendars Customer Information File Web to Lead Pricing Strategy Trade Promotion Marketing Resource and Asset Management Event Management Alliance & Partner Relationship Management Web Marketing External Communication Advertising Planning and Strategy Email Marketing Media Intelligence and Monitoring Campaign Planning & Optimization Product Content Management Ad Placement & SEO Marketing Spend Management Marketing Loyalty Marketing Affiliate Management 1:1 Decision Data Marketing Product Messaging & Positioning Support Quality Compliance Marketing Analytics Detection Source: TripleTree, LLC MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 5
  • ECOSYSTEMS – A CORNERSTONE FOR SaaS PLATFORMS Businesses and end-users have complex technology and information needs that no “SaaS ecosystems are quickly enabling single CRM vendor can possibly satisfy. For nearly two decades, sales, marketing SaaS vendors and users to integrate and service systems have been built in silos to address these needs, yet they have unknowingly created limitations for sharing product, customer, and sales data. multiple on-demand applications. These These limitations stemmed from technologies that built a proprietary wall around ecosystems typically permit integration customer and market data and didn’t establish a means for information sharing or and interoperability at a software code fluid collaboration. And, because these cross-departmental views were clouded level via mutual APIs and web services; and disjointed, executives have been limited in their ability to tap valuable data at a user interface level via common resources across departments. The result is that there are now thousands of design elements; and at a sales and business leaders in charge of ecosystems and most don’t realize it. marketing level with joint procurement and With workflows between departments flattening organizations, the task of provisioning capabilities.” re-engineering legacy applications to address these information sharing and collaboration needs would be a significant, multi-year undertaking and be – Jeff Kaplan, extremely cost prohibitive. As application vendors realize that customers want Senior Advisor to TripleTree/ more than just applications to tackle these needs, ecosystems are forming to Managing Director, THINKstrategies facilitate the integration of best-in-class solutions. Ecosystems while not new, are being redefined as best-in-class SaaS and collaboration tools permeate business units and IT departments. The productivity leverage from linking these point solutions are beginning to illustrate that “workflow integrations” are as much (if not more) important than “systems integrations.” To ensure rapid deployment and strong user adoption, integration of discrete SaaS solutions still require the guidance of a professional services firm – both at a systems SALES PERFORMANCE and workflow level. However, as Web 2.0 technologies mature, the move toward Diamond Performance Group platforms will likely see SaaS vendors embedding more plug-and- play integration www.diamondpg.com capabilities and added considerations for automating workflows. The goal for WHY THEY’RE INNOVATIVE: these vendors will be to drive down customer costs associated with implementing platforms (which may be one-time fees) while building up a recurring revenue Diamond Performance Group has evolved stream. Illustrated throughout this report are a few considerations on how SaaS its highly unique approach to performance ecosystems are beginning to link departments across an extended enterprise and benchmarking around key metrics and where SaaS platforms may likely evolve. behavior traits which can feed directly into incentive compensation programs and Performance Management: HR hiring profiles. This data allows sales Human Resources and Finance are two departments becoming more actively managers to become better coaches linked to sales, marketing and service disciplines, making performance for their reps and promote a culture of management a potential growth area in CRM. As these departments grapple continuous improvement between sales, with manual processes and spreadsheet-driven information flows, SaaS vendors finance and HR. – with performance management solutions – will see strong market interest from customers focused on getting the most out of their employees. KEY METRIC: Focus on attributes of top performers to drive financial results. PAGE 6 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • • Employee Optimization: Most sales executives will agree that integrating a technology-based selling solution with a proven sales methodology can be beneficial. The benefits range from equipping reps to handle thorny account management issues and optimizing how peak performers are managed to where incentive compensation can be best positioned. As shown in Figure 3, this data can be captured and fed to an HR department as useful information when hiring or facilitating performance evaluations, and to the finance department as quantitative INCENTIVE COMPENSATION business and product results are measured. Centive www.centive.com Figure 3: Microdiscipline Cluster – Performance Management Solutions Voice Self- Live & Web Customer Chat & Self- Product & Service Service Delivery Support Service WHY THEY’RE INNOVATIVE: Interaction Presence Service Training Standards Community Platforms CSR Unified Mgmt VOIP Account Management Desktop Targeting mid-market clients has allowed Remote Contact Center Agents Outsourced Contact Center Sales Analytics & Reporting Customer Service Portals / Microsites e-Commerce & Order Management Centive to enjoy strong growth and build Customer Asst’d. Product Dev. Incentive Compensation Inbound Communication Order Processing Team Performance Dashboards Human Capital & Performance Management creativity into their solutions. While Contact Center Life-Cycle Management Sales Coaching & Training Sales Operations addressing SarBox needs around reporting, Technical Support Negotiations & Contract Management Performance Management Service Case Management Configuration Management Source: TripleTree, LLC Proposal & Quote Management Internal Communication realized Management Centive has Mobility Solutions / Dispatch Field Service that gaining input Inbound Communication Mobile Sales Sales from sales professionals can be invaluable Case Resolution / Reporting Presentation Generators Applications Account Preparation Performance Management Customer Service Analytics Forecasting Channel Management as solutions are Feedback Management Enterprise tailored and incentive Internal Communication RFP Response and Pursuit Opportunity Management Account Preparation programs are designed. Customer Experience Management Territory Management Data Assessment Data Assessment Customer Data Hub Web Site Analytics Lead Conversion Analytics Partner Feedback Management Multi-Channel Sales Development Lead Management KEY METRIC: & Econometrics Marketing Analytics Product Management Prospecting/Contact Management Planning and Strategy Product Engineering and Launch Promotional Competitive Market Analytics Management Lead Management Marketing Unstructured Data Analytics Lead Qualifications & Scoring External Communication Planning and Strategy Maintain solution creativity and listen to Privacy Management Lead Development Outsourcing Marketing Planning and Calendars Web to Lead Customer Information File Pricing Strategy your sales professionals. • Incentive Compensation Management: ICM is a discipline being Trade Promotion Event Management Marketing Resource and Asset Management Alliance & Partner Relationship Management Web Marketing External Communication improved by the proliferation of discrete SaaS tools.Advertising an obvious It’s Planning and Strategy Email Marketing Media Intelligence and Monitoring Campaign Planning & Optimization Ad area & of Placement SEO convergence as Finance and Marketing Spend Management HR departments begin to Product Content Management Marketing Loyalty Marketing Data Marketing Product Messaging & Positioning collaborate on Marketing and Detection Decision team Analytics Affiliate Management 1:1 Support individual performance, and the CFO becomes Quality Compliance INCENTIVE COMPENSATION increasingly focused on sales team ROI. Currently two SaaS vendors Xactly – Centive and Xactly – are addressing this domain area with unique www.xactly.com client approaches. WHY THEY’RE INNOVATIVE: Workflow Improvement: Xactly is building a suite of services on Complex processes can define a workflow when linked by a dynamic set top of its base sales compensation and of related tasks. Sales pursuits, product development and compliance performance management solution for management are examples of resource-intensive activities that drive mid to large-sized organizations. Some of important results. For sales pursuits, customer information, product data, these include approaches to help align the competitive intelligence, configuration resources and pricing data all sales department with the CIO, with better converge into a proposal or quote. When developing a product, notes territory management, and compliance from contact center employees, customer forums, enterprise feedback reporting. management and cost data converge to craft a product roadmap. As compliance is monitored, documents, financial data and business rules KEY METRIC: converge to evaluate risk and identify issues. Because many SaaS solutions have simplistic workflow engines, complex environments like these can Link sales and finance on a broader suite be addressed by point solutions and integrated within an ecosystem. of functionality. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 7
  • Addressing Vertical Markets: Vertical markets are becoming a key point of competitive focus and differentiation for many SaaS vendors. Annually, TripleTree spends hundreds of hours in briefings with global firms regarding their SaaS strategies and other disruptive forces in the market. Invariably these discussions center on key industry verticals as evidenced by Salesforce.com’s recent introduction of its Wealth Management Edition. The marketplace is now seeing a major SaaS vendor put a marketing focus behind a CRM vertical solution. For this edition, Salesforce.com will likely tweak little of its core technology, but instead leverage its AppExchange platform and partner support to deploy at Merrill Lynch (its first announced Wealth Management Edition client). The Impact of Consumerism: A number of household name consumer web-based firms (WebMD, eBay, Amazon) have awakened to the reality that their consumer-based pricing models (advertising, content, transaction) and user design constructs could be successful if focused on a business solution. Not only are these consumer models sustainable, but in verticals like Healthcare – where employers are taking control of costs – they could be extremely effective, e.g. Yahoo! Health and Google Health. Consumer business models are about trust, and considering the credibility that Paypal and Verisign bring to a Web property, SaaS platforms will follow suit. A good example of this is AmericanExpress, whose recent investment in Rearden OUTSOURCED CUSTOMER SERVICE Commerce proves that they “get it” and could potentially become a disruptive competitor with customer-facing business applications like CRM. Another Connextions www.connextions.com solution provider taking what they learned from selling to customers and applying it to businesses is Connextions. WHY THEY’RE INNOVATIVE: Maturing Ecosystems: Connextions has revolutionized how To take advantage of these opportunities, many other consumer brands will likely customer data is harvested and applied at evolve their platforms to enable Web-based business functionality and attract every stage of the transaction lifecycle; partners. Consider Amazon.com with its Amazon Web Services platform. Via its using every touchpoint as an opportunity aStore and Omakase functions, Amazon is building eCommerce capacity for SMBs to drive revenue and brand loyalty. that want a simplified and proven way to link products, make recommendations Connextions has applied its proprietary and track sales. As TripleTree maps how SaaS ecosystems are influencing markets, expertise within the healthcare sector, we are aware that many emerging SaaS vendors are not sufficiently capable of enabling plans and providers to make delivering a comprehensive solution without professional integration and support the transition from commercial (B2B) to services. For these firms, a hybrid business model balancing custom pricing, project- retail (B2C) distribution, addressing the oriented deployments, and a common definition of client relationships is the rapid growth of consumer-driven decision norm. As shown in Figure 4 on page 9, there are eight foundational components making and sales. TripleTree views as critical for an ecosystem to mature into a platform. These components will offer ecosystem members a comprehensive ability to connect KEY METRIC: suppliers, clients and communities – elements which can improve workflow as an “extended organizational team” and foster collaboration. Not all of the market Make customer data manageable and leaders listed in Figure 4 offer a CRM solution. However, key SaaS platform actionable to increase sales and customer elements are maturing for these firms which could make them viable business retention. relationship management providers. PAGE 8 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • Figure 4: Potential Business Relationship Management Platforms Eight Core SaaS Components Document Compliance Security Billing Management Integration & Workflow Administration Community Partnering Consumer Oriented Vertical / Business Enterprise Tools/Portals Services Providers Application Vendors • Adobe • Amazon • ADP • Cisco • AmEx •AON • IBM • Apple • •BankofAmerica • Intuit • eBay • •Fiserv • Microsoft • Google • •JP Morgan Chase • NetSuite • WebMD • •Wachovia • Oracle • Yahoo! • •UnitedHealth Group • Salesforce.com • SAP Platform-Ready Market Leaders (SaaS Capable) Source: TripleTree, LLC MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 9
  • COLLABORATION TOOLS ARE STREAMLINING WORKFLOWS LOYALTY MARKETING The growth of collaboration and Web 2.0 is making an impact on the CRM Vertical Response sector. As knowledge workers seek others who share their energy and vision for a www.verticalresponse.com given topic, collaboration tools are blurring the lines between how organizations, departments, functions and roles are interacting. As these interactions occur, WHY THEY’RE INNOVATIVE: harnessing ideas and best practices on a platform will be a logical link for CRM Vertical Response has evolved as a workflows and collaboration technologies. resource for its clients beyond plain vanilla email marketing services. Using The Web 2.0 technologies that support collaboration (social networking, blogs, simple Web 2.0 tools, their executive wikis, tagging and RSS) are mostly offered by point solution providers. But team has built a fan-like following of users similar to the evolution of the micro-disciplines evolving in CRM, the move who are regularly blogged with valuable toward a platform of linked functions is happening quickly. Cisco’s recent insights on marketing best practices and acquisitions of FiveAcross (social networking) and more notably WebEx signify links to useful sales enhancement tools. that a market premium can be placed on content and collaboration tools, but also Encouraging a two-way dialogue balances that large global players are beginning to enter the playing field. Not surprisingly, this collaboration and creates a simple Adobe, IBM, Google, Microsoft, Oracle, and Salesforce.com are also among the but powerful community where innovation, major software vendors building collaborative tools. TripleTree believes that value and loyalty are exchanged. collaboration tools will mature into a key platform component as the metadata resulting from client and partner interactions is captured, analyzed and put to KEY METRIC: use. Depicted in Figure 5 and Table 1 on page 11, TripleTree has identified approximately 50 micro-disciplines linking communications and business Evolve to avoid becoming applications in the collaboration sector. commodotized. Figure 5: TripleTree’s Sector-Q for Collaboration eMarket RSS Place Feeds Mash-ups Service 2.0 Folksonomies Support E-Commerce Services Web Meeting Complimentary Application Systems Business Desktop Sharing Web 2.0 Groupware Data Sharing Conferencing Social Software Video Conferencing Social Podcasts VOIP Telephony Conferencing Wikis Online Chat Blogs Internet Forums Online Office Web Publishing Suites Unified Messaging Web Analytics / Instant Messaging Reporting Dashboards Email Communication Business Applications eForm Management Voicemail Portals Faxing Group Calendaring Presence Document Management Virus Protection Management Contact Lists Virtual Team Backup Management Mobility Space Application Patch Desktop Streaming Contact Remote Management Streaming Center Support Source: TripleTree, LLC PAGE 10 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • Table 1: Where Collaboration Links the Extended Enterprise Departments Linked to Sales, Marketing and Service CRM Disciplines Finance Human Resources IT Sales Incentive • Visibility into quota attainment, • Evolve to performance based • Up-sell and cross-sell forecasting and Compensation performance metrics and incentive and advancement. reporting. Management commission payments. • Development of an deal sales rep Sales Knowledge and profile. • Access to corporate knowledge databases, Team Performance • Sales rep ROI • Complex solution selling and competitive content and best practices. Management activity reporting. • Mobile worker connectivity primarily Mobile Technologies • Remotely monitor marketing impacts contact information, email and • Foster collaboration and Portals programs. chat; but service alerts and order status are emerging applications. Marketing • Addressing organization alignment • Ensure users understand and work with Customer Experience • Links financial performance to of how a customer experience customer facing systems. Management customer satisfaction strategies. mindset would be adopted across • Design these systems with common UI and and organization. interconnectivity across channels. • Allows managers to make trade-off Marketing Spend decisions related to how campaigns Management and • Optimized IT Spend Management perform relative to planning and Campaign ROI budgeting. Benchmarked • Clean prospect and customer data is a key Marketing • Analyze and predict churn, driver to overall CRM success. Performance, likelihood of next purchase, • Tied closely to Service technologies via Predictive Analytics, effective targeting. contact center data collection and Data Quality validation. Service • Knowledge management aids • Define and lead standards around client/agent/employee/ partner interaction. Collaborative Service Extended Enterprise • Can lead to integrated document sharing communications. and proactive service. • Performance metrics help manager Outsourced Contact • Optimized ROI for service • Lower cost, accelerated time to market, and agent with reporting and Center initiatives. simplified IT demands. workflow improvements • Unified quality monitoring, Workforce workforce management, e-learning Optimization and performance management. • Survey driven feedback designed for a Enterprise Feedback centralized view of feedback across sales, Management marketing and service. Source: TripleTree, LLC More Evidence from Salesforce.com: Not surprisingly, Salesforce.com is educating the market and current Salesforce.com customers who will never invest on the disruptive influence collaboration tools can have in EMC’s Documentum and who find Microsoft’s Sharepoint within sales, marketing and service disciplines. The too complicated. Both of these initiatives were in some Company’s Spring ’07 edition includes a platform called ways trumped by the announcement that the Company’s AppSpace which is designed to allow users to share content Apex platform can now be subscribed to separately from its and best practices on a collaborative portal. In addition, SFA service to build custom applications. This represents a Salesforce.com recently acquired Koral, a document major step forward in the ecosystem capacity and platform management firm that began as an AppExchange partner. aspirations of Salesforce.com. The Koral functionality will likely be aimed at prospects MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 11
  • BENCHMARKING SiriusDecisions Improving Customer Experience is Important: www.siriusdecisions.com Because every role in an enterprise cares about the customer experience, it’s likely WHY THEY’RE INNOVATIVE: that collaboration tools will take a leading positioning in influencing how customer retention programs are designed and implemented. Tempering this is the fact SiriusDecisions is focused on getting that many business workflows prohibit marketers from actually making an impact. sales and marketing departments Easier access to information for customers (the individuals who need the better marching in lock step regarding best experience) can be built by linking the feedback from customer forums, surveys, practices collaboration. Proponents of executive blogs and other communication mechanisms. This is technology that “marketing SLAs,” SiriusDecisions is exists today from many SaaS firms and will proliferate as marketing becomes a helping executives leverage performance mindset, not just a department. objectives, to gain greater visibility into the various roles that touch customers, macro Inter-Departmental Accountability is Growing: forces that influence like buying cycles, and As workflows overlap, applying important performance objectives to the in-the-trenches work like lead prospecting, collaborative efforts of sales, marketing and service departments is benchmarked scoring, marketing program ROI. by firms like SiriusDecisions. Whenever marketing and sales departments can establish performance objectives around customer communication and KEY METRIC: business development programs, the going-in expectations can be rationalized against variables and actual results, building trust and encouraging continuous Measure marketing’s effectiveness improvement – all of which can be measured via SaaS tools. for sales teams; modify; repeat. One such area of customer communication is campaigns, which can be impacted PORTAL MANAGEMENT by tools like those from iCentera, whose SaaS solution meshes traditional service iCentera functions like web, phone and mobile with the Web 2.0 experience of targeted www.icentera.com portal management. This allows customer communications to be captured, analyzed, and acted upon in a format that is digestible for field sales and service WHY THEY’RE INNOVATIVE: personnel. iCentera has approached a marketplace Customer Service as a Key Competitive Differentiator: need for improved communication and As shown in Figure 6, the micro disciples of service such as unified agent information sharing between partners through on-demand portals. The iCentera Figure 6: Microdiscipline Cluster – Customer Communications Solutions tool kit is simplistic and flexible; users can be online and productive in minutes and Live Customer Chat & Voice & Web Self- Self- Product & Service Service Delivery Support Service the document storage and refresh engine CSR Unified Interaction Presence Mgmt Service Training Standards Community Platforms VOIP Desktop Remote Contact Center Agents is powerful. This technology Sales AnalyticsAccount Management is useful Reporting & Outsourced Contact Center Customer Service Portals / Microsites e-Commerce & Order Management Sales for large enterprises that need a more Customer Asst’d. Product Dev. Incentive Compensation Inbound Communication Order Processing Team Performance Dashboards Contact Center nimble solution to their corporate intranet; Human Capital & Performance Management Life-Cycle Management Sales Coaching & Training Technical Support and SMBs looking for an affordable and Management TripleTree, LLC Sales Operations Performance Source: Case Management Negotiations & Contract Management Service powerful way to communicate more Configuration Management Proposal & Quote Management Internal Communication Mobility Solutions / Dispatch Field Service Management Inbound Communication Mobile Sales effectively with customers. Presentation Generators Applications Account Preparation Sales Case Resolution / Reporting Forecasting Performance Service Analytics Customer Management Channel Management Enterprise Feedback Management Internal Communication RFP Response and Pursuit Account Preparation Experience Management Customer Opportunity Management Territory Management KEY METRIC: Data Assessment Customer Data Hub Data Assessment Web Site Analytics Lead Conversion Analytics Partner Feedback Management Lead Management Marketing Analytics & Econometrics Multi-Channel Sales Development Product Management Planning and Strategy Prospecting/Contact Management Get portal users productive quickly, with Product Engineering and Launch Promotional Competitive Market Analytics Management Lead Management External Communication Marketing minimal or no reliance on IT. Unstructured Data Analytics Lead Qualifications & Scoring Lead Development Outsourcing Planning and Strategy Privacy Management Marketing Planning and Calendars Customer Information File Web to Lead Pricing Strategy Trade Promotion Marketing Resource and Asset Management Event Management PAGE 12 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM Alliance & Partner Relationship Management MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 Web Marketing External Communication Advertising Planning and Strategy Email Marketing Media Intelligence and Monitoring Campaign Planning & Optimization Product Content Management Ad Placement & SEO Marketing Spend Management Marketing Loyalty Marketing Affiliate Management 1:1 Decision Data Marketing Product Messaging & Positioning Support Quality Compliance Marketing Analytics Detection
  • desktops, mobile CRM, customer self-service, hosted contact centers and supporting analytical applications are increasingly being delivered via SaaS and bridging to workflows of other organizational roles. Web 2.0 and collaboration can help organizations better address the balance of web, phone, self-service and Figure 7: Contributing to the Business wireless technologies with human interactions while providing the most cost Relationship Management Evolution: effective customer service experience. The Projected Revenue Growth of SaaS-Based Collaboration Tools Mobile technologies have evolved to be more process-centric. Thus, they are $4,500 tailor-made for capturing and routing customer-related communications in a $4,000 $3,500 digestible and useful format to field sales and service professionals. $3,000 $2,500 $2,000 $1,500 While still a niche area, mobile technology has re-established itself in certain $1,000 industry verticals. In the transportation industry, employee productivity, $500 $0 collaboration, cost reduction, regulatory compliance and asset management 2007 2008 2009 2010 Source: TripleTree, LLC are driving this resurgence. In healthcare, improved data collection, patient intervention and coaching are a few of the drivers creating the phenomenon of “telemedicine” (for more details see TripleTree’s recently published Spotlight Report Telemedicine 2.0: Connecting Medical Devices, Patients and Providers to Improve Health). Interest in mobile sales solutions has also been renewed because of a focus on business process improvements. Response times, reporting, alerts and data capture have been enhanced by high-speed data networks and are now CONTACT CENTER bringing real value to sales and service personnel in terms of productivity, service AUTOMATION quality and data usefulness. Contactual www.contactual.com On-demand functionality has matured to some extent and for this study is represented by two distinct and measurable advantages as a SaaS application: WHY THEY’RE INNOVATIVE: an integrated view of the customer (offering a lower cost operation and higher Contactual is focused on offering a simple customer satisfaction) and enhanced job satisfaction for contact center agents. and scalable contact center solution that Thanks to solutions from SaaS vendors like Contactual, SaaS-based contact center addresses inbound client communications applications allow managers to remotely monitor agent productivity, support and contributes to revenue acceleration. flex-time schedules, and create convenience for a work-at-home employee. A In addition, Contactual has a platform few benefits for this are listed below: that can address evolving needs around helping facilitate sales orders, responding • HR can use this flexibility as a lure when recruiting, hiring, training to marketing campaigns, and offering and promoting contact center agents; customer education during an interaction. With lessons learned from its former life • Finance can view “mashed up” performance-based dashboards for as White Pajama, Contactual understands workers as evaluations are performed, budgets are allocated and hiring that cost, flexibility and reliability are keys and training is funded; and to its SaaS solution. • Service center agents can leverage collaboration tools to more KEY METRIC: effectively work with clients on issue resolution and be more proactive in working with sales colleagues on up-sell and cross-sell opportunities. Focus on key alliances to better serve users. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 13
  • IT – SHIFTING MARKETING FROM ART TO SCIENCE A number of independent surveys support what is becoming increasingly apparent in the marketplace: IT’s work direction (and even strategy) is being influenced more by an organization’s business units. Marketing departments have historically been the voice of companies, but have admittedly understood little about leveraging data and analytics – keys to influencing strategic thinking. Many of the CIOs who are believers in the transformative qualities of SaaS (cost savings, ease of implementation, minimal technical support) are becoming advocates for mainstreaming technologies that link critical customer data along the value- Figure 8: Where IT Supports SaaS Across chain. TripleTree sees the role of IT as it relates to the growth of SaaS spanning the CRM Sector-Q Disciplines two areas – as a facilitator and as a collaborator with each role being fluid based on how integrated the CIO is with the sales, marketing and service organizations, Inbound Communication and the presence of SaaS in the CRM microdiscipline of the organization. While it’s true that many marketing technologies (predictive analytics, search engine Data Assessment Internal Communication optimization, social networking, folksonomies) are moving too fast for IT to keep up with or support, a few initiatives are listed below which summarize how IT is Planning & Strategy helping business units understand and deploy SaaS- based solutions. Collaborator Customer Experience Management: CIO As previously introduced, an organization’s focus on customer experience Facilitator management is a cultural shift and should be considered a journey rather than a destination. This mindset is necessary because traditional ways of servicing the Account customer (which have been in place for years and sometimes decades) have well Management known limitations. Once an organization realizes that radical change is necessary External Communication Performance Management for improvement, years of business processes and embedded systems need to be re-evaluated and updated, making this “journey” a multi-year endeavor. Having Lead Management clear objectives which define a quality customer experience and are founded on a corporate strategy can help this cultural shift proliferate and come to life in more Source: TripleTree, LLC durable programs supported by the CIO. Sharing Client Information: Because gathering client information is challenging (user reluctance to share information in general, privacy concerns, etc.) Web-based tools must gather as much customer information as possible whenever an interaction takes place. Understanding the links between the likely behaviors of a prospect or customer when they are tied to core IT systems (user login, past search inputs and past purchases, etc.) represent critical data for sales, marketing, and finance to dissect and share. Simplifying and Sharing Analytical Information: For marketers, the IT department has become a key resource for defining, capturing and assessing customer data. In order to develop and use a meaningful customer database, overcoming past marketing practices that relied on separate data silos is crucial. Figure 9 on page 15 illustrates that on-demand sales, marketing and collaboration applications can now manage common data files and CIOs are taking a role in normalizing these files into custom views. PAGE 14 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • Sales Analytics & Reporting Customer Service Portals / Microsites e-Commerce & Order Management Sales Customer Asst’d. Product Dev. Incentive Compensation Inbound Communication Order Processing Team Performance Dashboards Contact Center Human Capital & Performance Management Life-Cycle Management Sales Coaching & Training Technical Support Sales Operations Negotiations & Contract Management Performance Management Case Management Configuration Management Proposal & Quote Management Internal Communication Mobility Solutions / Dispatch Field Service Management Mobile Sales Case Resolution / Reporting Presentation Generators Applications Forecasting Account Preparation Customer Service Analytics Channel Management Enterprise Feedback Management RFP Response and Pursuit Customer Experience Management Opportunity Management Territory Management Data Assessment Customer Data Hub Web Site Analytics Lead Conversion Analytics Partner Feedback Management Marketing Analytics & Econometrics Multi-Channel Sales Development Product Management Prospecting/Contact Management Product Engineering and Launch Promotional Competitive Market Analytics Management Lead Management Unstructured Data Analytics Lead Qualifications & Scoring Planning and Strategy Privacy Management Lead Development Outsourcing Figure 9: Microdiscipline Cluster – Customer Data Quality Marketing Planning and Calendars Customer Information File Web to Lead Pricing Strategy Trade Promotion Marketing Resource and Asset Management Event Management Alliance & Partner Relationship Management Web Marketing External Communication Advertising Planning and Strategy SIMULATION-DRIVEN Email Marketing Campaign Planning & Optimization Media Intelligence and Monitoring Product Content Management SALES FORECASTS Ad Placement & SEO Marketing Spend Management Marketing Loyalty Marketing Decision Data Marketing Product Messaging & Positioning Affiliate Management 1:1 Marketing Support Quality Compliance Aha! Analytics Detection www.ahasoftware.com Source: TripleTree, LLC Service Inbound Communication WHY THEY’RE INNOVATIVE: Sales Performance Management Internal Communication Aha! is tackling the age-old goal of CRM Account Preparation Data Assessment systems; helping sales management gain Lead Management better pipeline visibility. By leveraging Planning and Strategy simulations and analytical rigor, Aha! is External Communication External Communication Marketing gaining traction within the SugarCRM ecosystem as an on-demand solution that can help executives understand the risks and upside of a sales pipeline and forecast. Customer and Product Analytics: KEY METRIC: With the reality that the Web has become a bona-fide business development tool, econometric models examining marketing variables over time (such as the Data-driven forecast modeling will improve length of a service contract or the likelihood of an up-sell) or between different decision making. variables at a point in time (such as customer click-throughs on one ad versus Live Customer Chat & Voice another) Product & Service & Web Self- Self- Service – are gaining ground. This is a good example of where BI vendors are Service Delivery Support Interaction Presence Service Training Standards Community Platforms CSR Unified ent Desktop VOIP Mgmt beginning to offerRemote Contact Center Agents SaaS-based Center Outsourced Contact analytical dashboards that can be equally useful to sales and marketing. Figure 10 shows micro-disciplines where the successful Customer Service Portals / Microsites Customer Asst’d. Product Dev. Inbound Communication vendors in this arena will find Order Processing the balance between analyzing a mountain of data Contact Center and finding out which metrics are most relevant. Life-Cycle Management Technical Support agement Case Management Internal Communication Mobility Solutions / Dispatch Field Service Management Figure 10: Microdiscipline Cluster – Analytics Inbound Data Analytics Case Resolution / Reporting Customer Service Enterprise Feedback Management Customer Experience Management Data Assessment Customer Data Hub Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Product Management Source: TripleTree, LLC Product Engineering and Launch Competitive Market Analytics Service An impressive leader in Analytics has Unstructured Data Analytics ing and Strategy Privacy Management Marketing Planning and Calendars Sales Inbound Communication been Business Objects and its Crystal Customer Information File Pricing Strategy Performance Management Internal Communication Decisions on-demand solution. Business Marketing Resource and Asset Management Alliance & Partner Relationship Management Advertising Planning and Strategy Account Preparation Objects is visible as a partner not only Data Asssssment Media Intelligence and Monitoring duct Content Management within the AppExchange ecosystem, but end Management Lead Management ioning Marketing Planning and Strategy as a WebEx Connect partner as well. External Communication Marketing TripleTree expects Cognos and other traditional BI competitors to become similarly visible with BI tools that extend onto mobile devices, empower better reporting and influence database quality. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 15
  • MARKETING AUTOMATION — CAULK FOR CUSTOMER FACING APPLICATIONS Even though it has the fewest seats to deploy as measured in terms of a “typical” CRM project rollout, TripleTree predicts that SaaS-based marketing automation platforms will emerge as the logical hub for sales and service functionality and expects them to continue on an accelerated growth curve. Historically, enterprise application vendors have passed over the marketing automation component of CRM as an insignificant revenue opportunity. However, the broad reach of the marketing function has thrust it to the forefront as highly strategic. This reach is growing because of two factors: first, marketers are evolving their traditional role of planners to becoming more of a catalyst in facilitating action across the extended enterprise; and secondly, linking IT resources, data vendors, agencies, printers and other partners calls for enterprise-wide influence. An example of how on-demand technology supports these roles is marketing automation. Linking finance and IT is complex and needs a coordinator because of the unique data requirements and accountability touching Web marketing, campaign planning, marketing spend management, marketing compliance, analytics and collaboration. In addition, marketing performance management is of growing importance as companies prioritize on the financial impacts of spend management, compliance, workflow management and marketing asset management. In marketing, stand alone SaaS solutions won’t be enough to MARKETING AUTOMATION satisfy market demand. Hybrid solutions where a SaaS tool is embedded into a professional services contract are appearing in areas like marketing data services, Vtrenz, Inc. www.vtrenz.com compliance and spend management. WHY THEY’RE INNOVATIVE: As noted above, marketing’s reach inside and outside of an organization is broad Vtrenz recognized that the Internet has and provides it with newfound leverage that is strategically relevant to the CEO provided consumers new levels of control and CFO in key disciplines of marketing, as depicted in Figure 11 on page 17. at all stages of the purchase process, requiring a closer alignment of sales Spend Management (Finance): and marketing. And, while push and pull The role of marketing is expanding beyond creative services and product marketing strategies are fluid processes, management by embracing the myriad of analytics that measure program competitive organizations are operating effectiveness. Enterprise marketing expenditures are massive with some “lean,” so automating many marketing industry estimates pegging spending at one trillion dollars annually. The desire functions is critical. Planning, execution to account for this spending coupled with new marketing channels and data and measurement are challenging sources (like Google Ad Words) is driving a stampede toward better marketing marketers in organizations of all sizes, and spend management. Given the disparate spending in organizations to manage with the advent of work-flow automation promotions, channels, websites, call centers and other tools, a significant need and optimization tools as a critical link, for improved marketing spend management has evolved. An example of how SaaS-based solutions like Vtrenz are marketing spend management is gaining awareness is represented by platform- increasingly relevant. enabled mash-ups. Last year, Salesforce.com acquired AppExchange partner Kieden, a SaaS firm whose application mash-up helped users better measure KEY METRIC: their marketing expenditures on Google Ad Words. It followed with a recently announced agreement with Google that takes the Kieden acquisition to a new Leverage a holistic approach to marketing level with Salesforce.com Group Edition, a more formal product partnership. automation for maximum impact. PAGE 16 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • Compliance (Finance/IT): The dual drivers of spend management and analytics are further linked by the Customer Live interest of C-level executives to establishChat & & Web accountability with marketing Voice better Self- Product & Service Self- Service Delivery Support Service Interaction Presence Service Training Standards Community Platforms beyond financial performance to include regulatory compliance. Remote Contact Center Agents CSR Unified Account Management Desktop VOIP Mgmt TheOutsourced Contact Center requirements for Sarbanes-Oxley and “Do Not Call List” regulations underpin the Customer Asst’d. Product Dev. interest Sales Analytics & Reporting Customer Service Portals / Microsites e-Commerce & Order Management Incentive Compensation Inbound Communication of nearly all organizations to view marketing automation platforms as critical Team Performance Dashboards Order Processing Contact Center Human Capital & Performance Management Sales Coaching & Training in their overall business development arsenal, and the extensibility of SaaS tools Life-Cycle Management Technical Support Sales Operations Performance Management gotiations & Contract Management solutions have carved out a growing role. TripleTree’s research has found thatSolutions / Dispatch Case Management Configuration Management Internal Communication Mobility CMOs are becoming the key bridge between finance and sales on these Case Resolution / Reporting tasks l & Quote Management Field Service Management Mobile Sales s Applications ecasting Account Preparation many traditional marketing functions to be automated, analyzed Analytics and is driving Customer Service ement Enterprise Feedback Management uit and/or potentially outsourced. An on-demand firm leveraging its focus Customerdata Management on Experience Data Assessment Customer Data Hub compliance for the pharmaceuticals industry is Health Market Science. Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Product Management Product Engineering and Launch Competitive Market Analytics Lead Management Unstructured Data Analytics Planning and Strategy Privacy Management Figure 11: Marketing Planning and Calendars Customer Information File Pricing Strategy Microdiscipline Cluster – Marketing Data Management Marketing Resource and Asset Management Alliance & Partner Relationship Management External Communication Advertising Planning and Strategy Media Intelligence and Monitoring ion Product Content Management ment & SEO Marketing Spend Management Marketing Loyalty Marketing Affiliate Management 1:1 Decision Data Marketing Product Messaging & Positioning Support Quality Compliance Marketing Analytics Detection Service Source: TripleTree, LLC Inbound Communication Sales Performance Management Internal Communication Account Preparation MARKETING INFORMATION Data Assessment COMPLIANCE Lead Management Planning and Strategy Health Market Science Marketing www.healthmarketscience.com External Communications WHY THEY’RE INNOVATIVE: Health Market Science (HMS) is an information services company taking a compliance-driven approach to healthcare Marketing Metadata (IT): data integration. HMS is focused on A meaningful revenue opportunity exists for SaaS firms capable of adding value helping clients be more effective with to the huge volumes of metadata being generated by today’s legacy IT systems. their market data acquisition, storage, As marketing organizations process and analyze inbound customer inquiries, matching, integration, and dissemination. product information, brand collaboration, campaign analytics and Web By embedding the HMS data search and interactions, the data about the data (or metadata) becomes very important. The compliance technology into the sales complexities around extracting this information from data warehouses requires a infrastructure of their clients, they’ve good working relationship between the marketing department and IT. Business become a mission critical resource. performance, patterns and trends and decision support are the results of how data can be queried, filtered, analyzed and displayed. SaaS tools for marketing KEY METRIC: metadata management are emerging, but as these tools and frameworks emerge the collaborative nature of SaaS and Web 2.0 will have marketers playing a larger Analytical rigor adds “trusted resource” role in how this information is synthesized and where value can be recognized. tag to SaaS platforms. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 17
  • THE CHANGING ROLE OF PROFESSIONAL SERVICES PROFESSIONAL SERVICES The proliferation of SaaS applications in CRM has given birth to a new breed of professional services firms. As the “family psychiatrist,” today’s small but nimble BlueWolf Group www.bluewolf.com professional services firms are being asked to understand the needs of sales, marketing and service departments – and to make sure they get along with IT WHY THEY’RE INNOVATIVE: when solving pressing technology issues. The talent profiles and staffing models required to help organizations grow revenues and optimize customer satisfaction The growing popularity of SaaS delivered with both SaaS and licensed CRM solutions are considerable. Skillful CRM applications has changed the game for deployments are not simple, and complex domains like business intelligence and professional services. Less and less, compliance require deep subject matter knowledge. This knowledge needs to consultants are asked to install, test, be coupled with an understanding of the customer’s business, working templates and tune software (tasks that once made for rapid implementation and an effective training plan. Add in the nuances of up 50% of any application deployment SaaS, Web 2.0 and the need to consider the inputs from an extended enterprise project). The focus is now on defining, and the old school consulting mindset of the 1990s quickly fails. Two firms that creating, customizing, and deploying embody a new approach to professional services are BlueWolf Group and Appirio. effective business processes through the flexibility of on-demand applications. As both of these firms know well, the economics of integrating a SaaS solution Blue Wolf approaches SaaS with rapid for clients who have historically invested in licensed software present some new configurations and bite-sized deployments realities. Project timelines, resource management needs, and hiring profiles are top of mind. If success can’t be defined shifting. In addition, non-traditional competition from BPO firms and digital in 90 days (regardless of client size) then agencies are creating new dynamics for pursuing business that may focus as much success criterion is reassessed by either on creative problem solving as they will on technical competence and cost savings. desired function or targeted group. A few other examples are listed below: KEY METRIC: • Overall project investments are lower: With SaaS, organizations are now spending only a fraction of what they did five years ago when Leverage analytics as a deploying a licensed software solution. differentiator. • Reduced consulting fees: The reduced need for software configuration and customization work calls for rapid proofs of concept that quickly turn into full-blown deployments. • Rapid project timelines: The well-publicized success of SaaS has convinced buyers that a six to eight-week deployment timeline is the norm. While this might be realistic in some cases, rapidly integrating a SaaS solution (either sales, marketing or service) with order management, reporting or other back office functions requires specialized skills and an efficient project plan. • Specialists: Mid-market clients want and need “utility infielder” consulting talent: a project manager, BA, database analyst and trainer – all rolled up in one. These clients also gravitate toward consultants who actually have “field” experience as former sales, marketing or service professionals. Even though the technical training curve for SaaS consultancies are flatter than those of a licensed software integrators, these “business-minded” profiles can still be challenging to find. PAGE 18 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • • An opportunity to develop IP: The lack of a high margin recurring revenue model has long been an issue for value creation with professional services firms. As SaaS-focused consulting firms work with clients, they are many times the first to identify opportunities for bolt-on applications. Depending on the talent level in a given firm, these applications can be sold independently or through partner ecosystem portals to create an incremental revenue stream and improved gross margins. Outsourcing services is yet another area where SaaS-based solutions are positioned to grow beyond traditional “labor-based” solutions. Embedded SaaS technology is not only helping organizations continue to target cost reductions, but also to cast the focus on growth, profitability and an improved customer experience. BPO for sales, marketing and service is evident in many provider solution bundles, but the solution benefits of flexibility, cost containment, geographic leveraging and alleviating concerns over long term contracts (vendor lock-in) and rigid workflow rules are still at the top of the list and may tip executives to favor SaaS-enabled BPO. The most visible arena for a “data services” model of outsourcing to proliferate will support marketing disciplines. Live Customer Chat & Voice & Web Self- Self- Product & Service Service Delivery Support Service • Data accuracy and opportunity scoring: With the amount of human CSR Unified Interaction Presence VOIP Mgmt Service Training Standards Community Platforms Remote Contact Center Agents and financial resources dedicated to marketing, analytical solutions Account Management Desktop Sales Analytics & Reporting Outsourced Contact Center Customer Service Portals / Microsites are being sought to help validate decision marking. BI vendors with Inbound Communication e-Commerce & Order Management Sales Customer Asst’d. Product Dev. Incentive Compensation Order Processing Team Performance Dashboards MARKETING DATA SaaS-based analytical solutions&can bridge the chasm of separate data Human Capital Performance Management SERVICES Contact Center Life-Cycle Management Sales Coaching & Training silos and share contact &centerSales Operations call notes with Performance as shown in Negotiations Contract Management marketing Management Technical Support Case Management Figure 12. Configuration Management ReachForce Communication Internal Mobility Solutions / Dispatch Proposal & Quote Management Mobile Sales www.reachforce.com Field Service Management Case Resolution / Reporting Presentation Generators Applications Forecasting Account Preparation Customer Service Analytics Channel Management WHY THEY’RE INNOVATIVE: Enterprise Feedback Management Figure 12: RFP Response and Pursuit Microdiscipline Cluster – Successful Lead Conversions Customer Experience Management Opportunity Management Territory Management Data Assessment Customer Data Hub Web Site Analytics Lead Conversion Analytics ReachForce is unique because of their Partner Feedback Management Marketing Analytics & Econometrics Multi-Channel Sales Development Prospecting/Contact Management focus on the core of demand generation – Product Management Product Engineering and Launch Promotional Competitive Market Analytics Management Lead Management the data upon which an outreach program Unstructured Data Analytics Lead Qualifications & Scoring Planning and Strategy Privacy Management Lead Development Outsourcing is built. ReachForce uses both SaaS and Marketing Planning and Calendars Customer Information File Web to Lead Service Pricing Strategy Trade Promotion professional services to build campaigns Marketing Resource and Asset Management Source: TripleTree, LLC Event Management Alliance & Partner Relationship Management Web Marketing External Communication Sales s Inbound Communication that identify individuals based on roles, not Advertising Planning and Strategy Email Marketing Media Intelligence and Monitoring Campaign Planning & Optimization Ad Placement & SEO Performance Management Product Content Management Internal Communication just titles. This dramatically increases the Marketing Spend Management Marketing Loyalty Marketing Preparation Data Account Decision Affiliate Management 1:1 Marketing Product Messaging & Positioning Quality Compliance quality of contacts delivered because titles Marketing Support Analytics Detection Data Assessment typically identify a role only 1% of the time. Lead Management Planning and Strategy This hybrid approach builds a more reliable link between marketing and sales and as it External Communication Marketing optimizes lead quality. KEY METRIC: Align processes and technology for a better business outcome. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 19
  • • Executive education is required: Just as organizations have started to de-silo, executives need to undergo the same transformation. The best professional services firms are often viewed as “trusted advisors” to IT departments. By working with sales, marketing and service executives to leverage information to build better products and more effectively manage the relationship between IT and the business units, they will increase their influence and cement better relationships. Other roles for SaaS professional services firms may include helping clients understand broader issues and events in a marketplace and simply educating the executive management at a prospect on the merits of an on-demand deployment. The market is changing faster than ever before and because professional services firms often have strong client intimacy, they are being seen on some levels as business technology advisors. Below is where TripleTree sees professional services firms addressing the changing market over the next several quarters. Figure 13: Professional Services and the Changing SaaS Market “ Wait and See” On Fallout From Vendor Marketing Consolidation Automation Platforms PROFESSIONAL SERVICES Internal Focus on Compliance Focus on Customer Value and Broader Analytical Early Days of SaaS Analytics Appirio Platforms Vendor Focus www.appirio.com Cost Cutting & SaaS Clients Tasting Client Retention Vendor Independence WHY THEY’RE INNOVATIVE: Appirio is disrupting the $600B worldwide Best-In Leverage Collaborative Hunker Class SaaS IT services market by approaching Down of Platforms Solutions Validation Convergence Emerge enterprise class organizations with a Web 2.0, SaaS 2.0 and Services 2.0 mindset. This mindset leverages the intersecting 2001 2003 2005 2007 2009 trends of rapid innovation, lower cost Source: TripleTree, LLC structures and an early competitive advantage of the business web. Nimble professional services firms like Appirio who collaborate with clients, align closely with ecosystem partners and deploy solutions quickly are best positioned for revenue and client growth. KEY METRIC: Keep it simple and involve users early and often. PAGE 20 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • CONCLUSIONS TripleTree has long stated that SaaS is the most significant disruption to the Technology sector in a generation. It represents a competitive threat to legacy vendors unlike anything they have previously encountered because of its ability to add massive scale and relevance to any global player – regardless of domain or industry. An overarching question for CRM is which delivery model will emerge as most relevant: SaaS, licensed software, outsourcing or a hybrid? Cisco’s recent acquisition of WebEx represents a great example of where a network infrastructure giant followed a quiet cadence of social networking and content acquisitions with a bang. Now, Cisco has a tremendous content engine to ride on its networks and WebEx has become a much more formidable competitor for Microsoft. Last year’s investment by AmericanExpress in Rearden Commerce is another example of the growing importance of SaaS. If a primary goal of AmericanExpress is to help business customers manage mundane travel expenditures (expenditures that will be paid for via credit card), then Rearden represents the beginnings of a new platform. The list of examples is growing monthly and proves that the ways to influence customer experience are being redefined in real-time. The reality for most SaaS firms is that being a discrete solution alone isn’t enough to drive value and that a strategic exit might be possible through a non- technology acquirer. Recent SaaS acquisitions by ADP (Employease) and Illinois Tool Works (ClickCommerce) helped the acquirers gain immediate traction in new markets. Associating a SaaS application to one or more ecosystems can prove functionality for new markets and as a result, can become valuable to new strategic suitors. Many domains and sectors are being completely reinvented as pure-play SaaS solutions and organizations with hybrid delivery models (SaaS and BPO) emerge. Below is a summary of other key points that were reviewed throughout this report. Ecosystems: The need to provide specific business value will continue to drive the evolution of SaaS ecosystems. Platforms will emerge from these ecosystems where vertical industry expertise and critical business support functionality becomes embedded in the underlying architecture of a vendor solution. CRM platform decisions (both business and IT) will be driven by their ability to impact customer value. Collaboration: Collaboration toolsets have become the critical link to capturing the exchange of information between organizations and their extended enterprise. Because most SaaS collaboration vendors are still emerging and offer only discrete functionality, the sector will consolidate quickly as point solutions won’t be viewed as viable long term solutions. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 21
  • IT: As marketing moves from art to science, CIOs will increasingly take an active role in supporting the ways in which sales, marketing and service professionals access, share and analyze information to benefit the customer experience. Collaboration, workflow and content management are three factors driving IT into a resource/collaborator relationship with business units. SaaS vendors who understand this relationship and exploit the notion that business units and IT are enmeshed will be well served. Marketing: Marketing automation represents one of most intriguing SaaS categories of all those tracked by TripleTree. Presently, there are only a few players delivering comprehensive offerings in what is otherwise a sector starving for a leader, and a buyer community that is accepting of on-demand delivery models. Spend management, compliance and analytical applications are three areas where SaaS vendors will make a meaningful impact. Professional Services: Hiring business-minded consultants who can quickly relate to, assess, and recommend process and workflow changes for their clients will be in high demand. In addition, a strong understanding of how analytical applications can help CEOs make better decisions coupled with good relationships with key ecosystem vendors will earmark the leading consultancies. Unleashing Value: The enterprise software sector will continue to consolidate for the near term and SaaS delivery models will be rewarded with valuation premiums above licensed software. However, the market is now seeing the beginnings of a squeeze on SaaS valuations which represent multiples on EBITDA as well as multiples on revenue. The more S-1 filings that get delayed or pulled and the more IPOs that trade sideways or down will reinforce the fact that acquisition may be the best path to liquidity for most SaaS vendors. As shown in Figure 14 on page 23, waiting even a couple of years to grow revenues may not necessarily bring a higher valuation as TripleTree predicts M&A multiples will decline and begin to resemble licensed software valuations. Legacy industry leaders like SAP, Oracle, Microsoft and others are finally responding to on-demand pressures in CRM by building or acquiring competencies. In late 2005, these firms stopped refuting the success of the on-demand CRM category and began a concerted effort to enter the fray. TripleTree is convinced that CRM vendors who do not develop an on- demand offering in sales, marketing or service risk becoming marginalized. Finally, TripleTree believes organizations will soon acknowledge that Business Relationship Management may be a better characterization for the workflows and PAGE 22 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • Figure 14: Potential Changes in SaaS Valuation Over Time 3-5x REVENUE Premium Valuation Metrics (based on revenue multiples) Software as a Service x SaaS 2.0 • Limited number of “pure” SaaS firms • Standard delivery model • Average size $5-30M in revenue • $50M+ in revenue • Typically operating at/near breakeven • 25%+ operating margins • Discrete technologies; narrow focus • Steady growth (10-15%) • Platform technologies; broad focus Broad Buyer Landscape Limited Buyer Landscape Traditional Valuation Metrics (based on EBITDA multiples) Today Tomorrow Revenue $10 million $30 million EBITDA $1 million $5 million Metric 3-6x revenue 7-12x EBITDA Valuation $30-$60 million $35-$60 million x 7-12x EBITDA Today 3+ Years Source: TripleTree, LLC TripleTree, LLC is a research based investment bank serving growth companies, sophisticated investors and supporting technologies that can improve a customer’s experience, power the global acquirers. TripleTree conducts extended enterprise and stoke the fires of innovation. proprietary industry research which guides our work in M&A, growth As an investment bank and strategic advisor, TripleTree is committed to capital and financial advisory services. helping emerging companies understand how to take advantage of trends like those outlined in this report. We welcome the opportunity to learn more Our value-based approach benefits about your business and how we can help your team climb to the next plateau technology-enabled businesses in sectors of market leadership. like healthcare, where delivery models are converging; or where CEOs and investors are in search of creative ways to disrupt markets and unleash value. TripleTree’s unique personality is shaped by the experience of our principals, who as business thinkers and builders collaborate to identify strategic solutions that maximize value for our clients in a dynamic marketplace. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 23
  • APPENDIX - Chart 1: M&A Overview for CRM Vendors (partial list) Price / Date Target Target Buyer Buyer Description Description Price Revenue Multiple Pitney Bowes is focusing on "high growth" sectors within the marketing and May-07 Digital Cement Pitney Bowes mail. This acquisition will help Pitney better manage communications with mail. This acquisition will help Pitney better manage communicatons i $40.0 NA their customers. their customers. This acquisition grows Business & Decision's international business and May-07 Inforte Corp Business & Decision Group strengthens its US, UK, India and German presence and capabilities while strengthens its US, UK, India and German presence and capabilities while $50.9 1.4x helping to improve their ability to acquire, develop, and retain customers. helping to improve their ability to acquire, develop, and retain customers. KANA will expand its professional services portfolio to meet growing demand for consulting and implementation services. eVergance Partners, LLC, a May-07 eVergance Partners KANA Software management consulting and systems integration firm offering end-to-end NA NA consulting services for CRM optimization, knowledge management, and Web self-service deployments. Web self - service deployments. This acquisition by Acxiom will build upon their platform of personalization for This acquisition by Acxiom will build upon their platform of personalization Apr-07 Kefta Acxiom Corporation for sales, marketing customer service and will help Axciom to to better sales, marketing andand customer service and will help Axciombetter target $9.0 2.6x and dynamically deliver deliver relevant content to web users. target and dynamically relevant content to web users. This acquisition gives DealerTrack, a provider of on-demand software and data solutions for the automotive retail industry, increased functionality to data solutions for the automotive retail industry, increased functionality to Apr-07 Arkona Inc. DealerTrack Holdings $58.9 4.6x provide an on-demand dealer management systems for automotive provide an on-demand dealer management systems for automotive dealerships dealerships. This acquisition expands Nuance's existing product portfolio with aasolution This acquisition expands Nuance's existing product portfolio with solution Feb-07 BeVocal Inc. Nuance Communications set for mobile customer lifecycle management and a range of premium $139.7 NA services for the mobile consumer. services for the mobile consumer. The acquisition will boost CDC's enterprise complaint and feedback The acquisition will boost CDC's enterprise complaint and feedba k c Feb-07 RESPOND Group CDC Corporation management solutions offering and provide inroads to the financial services NA NA vertical. services vertical. This acquisition expands the Omniture Online Business Optimization This acquisition expands the Omniture Online Business Optimization Platform and positions Omniture for further growth by way of increased Platform and positions Omniture for further growth by way of increased Feb-07 Touch Clarity Omniture automation and optimization. The acquisition is expected to give Omniture $51.5 automation and optimization. The acquisition is expected to give Omniture NA expanded market opportunities by providing new entry-point as well as cross- sellcross-sell opportunities. opportunities. Gives Made2Manage a broadened, more powerful customer management Gives Made2Manage a broadened, more powerful customer management offering based on the individual strengths of the KNOVA and Onyx offering based on the individual strengths of the KNOVA and Onyx Consona Corporation applications. M2M plans to leverage KNOVA’s existing application applications. M2M plans to leverage KNOVA’s existing application Dec-06 KNOVA $47.0 1.4x (Formerly Made2Manage) programming interfaces for CRM integration with Onyx’ss leading Service- programming interfaces for CRM integration with Onyx’ leading Service- Oriented Architecture as they believe they can be quickly integrated using Web services. Web services. This acquisition will give Atlas a broaded advertising campaign management broader Dec-06 Accipiter Solutions Atlas solution that will provide online media planning, buying and ad serving to solution that will provide online media planning, buying and ad serving to $30.3 NA enterprises. It also provides integration and software development services. enterprises. It also provides integration and software development services. The acquisition brings leading edge technology and deep industry expertise The acquisition brings leading edge technology and deep industry to WebTrends. Now WebTrends can offer customers a leading online to WebTrends. Now WebTrends can offer customers a leading online Dec-06 ClickShift WebTrends marketing optimization solution. They now have aablend of deep online marketing optimization solution. They now have blend of deep online NA NA advertising expertise and innovative technology that solves fundamental advertising expertise and innovative technology that solves fundamental challenges facing marketers. challenges facing marketers. Skywire’s acquisition allows them to become one of the largest providers of software and services targeted to specific vertical industries. The new entity Dec-06 Docucorp International Skywire Software $127.0 1.4x will work to further its global reach and expand upon its 1,600 company will work to further its global reach and expand upon its 1,600 company client base. client base. The addition of FNS gives Innovation Group a a strong foundation in North The addition of FNS gives Innovation Group strong foundation in North America. FNS uses a combination of call center outsourcing services and America. FNS uses a combination of call center outsourcing services and Nov-06 First Notice Systems Innovation Group plc $50.0 2.5x rules-based web technology to successfully connect insurance carriers, third- rules-based web technology to successfully connect insurance carriers, party administrators and self-insureds with their customers. party administrators and self -insureds with their customers. The transaction will help build out a a stronger CRM offering that will include The transaction will help build out stronger CRM offering that will include Sep-07 Smart CRM Alliance Technologies Web-based sales force automation and customer relationship management Web-based sales force automation and customer relationship management $2.3 1.1x software solutions. software solutions. The acquisition of Onyx further solidifies Made2Manage’s enterprise The acquisition of Onyx further solidifies Made2Manage’s enterprise Consona Corporation software and services offering. The addition of Onyx also provides a second software and services offering. The addition of Onyx also provides a second Jun-06 Onyx Software $92.0 1.6x (Formerly Made2Manage) platform for industry consolidation, and extends the geographic reach of our direct distribution capabilities. direct distribution capabilities. Alterian seeks to meet aacritical marketing need: the integration of online and Alterian seeks to meet critical marketing need: the integration of online and May-06 Dynamics Direct Alterian plc database marketing through the acquisition of Dynamics Direct, an email database marketing through the acquisition of Dynamics Direct, an email $4.3 3.3x and online marketing technology innovator. and online marketing technology innovator. The acquisition will accelerate RightNow’s customer experience The acquisition will accelerate RightNow’s customer experience May-06 Salesnet RightNow Technologies management development efforts by combining RightNow’s patented management development efforts by combining RightNow’s patented $9.0 NA knowledge foundation with Salesnet’s workflow engine. knowledge foundation with Salesnet’s workflow engine. Infor continues its strategy to acquire and consolidate. This time it’s aamajor Infor continues its strategy to acquire and consolidate. This time it’s major May-06 SSA Global Technologies Infor Global competitor. With the acquisition, Infor becomes third-largest enterprise competitor. With the acquisition, Infor becomes third-largest enterprise $1,610.0 2.2x software firm in thethe industry. software firm in industry. Mar-06 Veridiem SAS Institute Increases the functionality of its customer intelligence platform. Increases the functionality of its customer intelligence platform. NA NA The acquisition bolsters Unica’s vision of becoming the first firm to deliver The acquisition bolsters Unica’s vision of becoming the first firm to deliver Mar-06 Sane Solutions Unica end-to-end, cross-channel marketing solutions. It also bolster’s its web end-to-end, cross- channel marketing solutions. It also bolster’s its web $22.8 4.0x analytics and internet marketing offerings. analytics and internet marketing offerings. The acquisition by Alliance Data System’s Epsilon Interactive will create one The acquisition by Alliance Data System’s Epsilon Interactive will create Feb-06 DoubleClick Email Solutions Epsilon Interactive $90.0 2.2x of the largest e-mailmail service and marketing firms in its space. one of the largest e service and marketing firms in its space. - Source: TripleTree, LLC Median $50.0 2.2x PAGE 24 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • APPENDIX - Chart 2: Venture Capital Investments and M&A Activity in CRM (Licensed and SaaS) SALES Includes CRM vendors offering solutions for: campaigns, email, delivery, data mining, warehousing, database, analytics, real-time information, business intelligence and reporting. 50 45 Sales 40 35 30 Transactions 25 Mergers & Acquisitions 20 15 Venture Capital Investments 10 5 0 2001 2002 2003 2004 2005 2006 2007 Source: TripleTree, LLC MARKETING Includes CRM vendors offering solutions for: leads, search tools, web forms, call scripting, scoring tools, proposals/ quote generation, presence detection, configuration, web conferencing, contract management, workflow and approval. 180 Marketing 160 140 120 Transactions 100 80 Mergers & Acquisitions 60 40 Venture Capital Investments 20 0 2001 2002 2003 2004 2005 2006 2007 Source: TripleTree, LLC SERVICE Includes CRM vendors offering solutions for contact centers, support, service, collaboration, email response, email service and customer care. 80 Service 70 60 50 Transactions 40 30 Mergers & Acquisitions 20 10 Venture Capital Investments 0 2001 2002 2003 2004 2005 2006 2007 Source: TripleTree, LLC MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 25
  • THE TEAM Kevin Green, Managing Partner • Co-founded TripleTree, LLC • 25+ years building and advising IT companies • Senior executive roles in public and private IT companies; two as CEO • Active with numerous industry associations, and Board of Directors, including SIIA and Connextions • BA and MBA, University of San Diego David Henderson, Managing Partner • Co-founded TripleTree, LLC • 22+ years in venture capital, business development and as a senior operating executive • Seven years of public accounting experience at Arthur Andersen • CEO of a $400 million asset bank holding company • Active Board of Director on several public and private companies • BA, Moorhead State University; Certified Public Accountant Scott Tudor, Partner • Joined TripleTree in 1998 • Specializes in IT Outsourcing & Managed Services and Healthcare IT • Worked on more than 30 transactions with leading global companies such as UnitedHealth Group and Hewlett Packard • Served as TripleTree’s research chairman • BA and JD, University of Illinois; MBA, Carlson School of Management, University of Minnesota Chris Hoffmann, Senior Principal/Research Director, Technology • Joined TripleTree in 2005 • 19+ years of experience an operating executive, consultant, and analyst in the technology industry • Transaction activity focus in the areas of software and technology • Former President of Tier1 Research; executive positions at Gartner, GE Capital Consulting and IBM Global Services • BA, University of Minnesota-Duluth; advanced studies through the University of Minnesota and Michigan State University Brian Klemenhagen, Senior Principal • Joined TripleTree in 1999 with over ten years of combined investment banking and Wall Street equity research experience • Primary engagement manager across technology, software and outsourcing sectors • Principal contributor to TripleTree’s SaaS research • Prior to joining TripleTree was with RBC Dain Rauscher • BA, Gustavus Adolphus College; MBA, Carlson School of Management, University of Minnesota MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 PAGE 26 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
  • THE TEAM Peter Erickson, Senior Principal • Joined TripleTree in 1998 • Transaction focus on consumer health, human capital management and business services • Sell-side M&A and capital growth client representation across software and services domains • Prior to joining TripleTree, managed international development programs through the National Forum Foundation in Washington, DC. • BA, DePauw University; MBA, Carlson School of Management, University of Minnesota Scott Donahue, Principal • 15+ years financial strategy analysis and business development consultation including marketing, operations support, and technical product development • Expertise in IT operations and services delivery approaches • Wall Street experience • Served in management roles at leading IT firms • BA, University of California - Santa Barbara; MBA, University of Michigan Scott Prentice, Associate • Focus on M&A and private placement activity in the technology sector. • Previously worked on M&A activity at Ingenix, a division of UnitedHealth Group • Prior experience included technology capital investment at Target Corporation and as an IT consultant with Computer Science Corporation • BA, Bethel College; MBA, Carlson School of Management, University of Minnesota Michael Boardman, Analyst • Specializes in research and analysis of industry trends and investment opportunities within Software and IT Services • Prior experience includes an internship with Merrill Lynch • Held a Cisco Certified Networking Associate Degree (CCNA) • BA, Carlson School of Management, University of Minnesota Jeff Kaplan, Senior Advisor • Advises TripleTree’s technology team • Founder and Managing Director of THINKstrategies • Founder of the Software as a Service (SaaS) Showplace® and Managed Service Showplace® • Founding member of the SIIA SaaS Executive Council • Frequent speaker at industry events and contributing columnist for BusinessWeek, Mass High Tech Journal, Financial Times of London, and For a complete list and profiles of Network World, among many other industry leading publications the TripleTree team, please visit our website at www.triple-tree.com MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 27
  • About TripleTree TripleTree, LLC is a research-based investment bank serving growth companies, investors and global acquirers. TripleTree conducts proprietary research that guides our work in M&A, growth capital and financial advisory services. Our value-based approach benefits technology- enabled businesses in sectors like healthcare, where technology and services are converging in new delivery models and in other industries where management and investors are in search of creative ways to penetrate and dominate markets and build value. TripleTree’s unique personality is shaped by the experience of our principals, who as former business builders and transaction advisors create strategic outcomes that maximize value for our clients. For further information, visit our website at: www.triple-tree.com Copyright © 2007 by TripleTree, LLC Minneapolis San diego t 952-253-5300 t 858.792.3406 f 952-253-5301 f 858.792.3407 7601 France avenue South 12526 High Bluff drive Suite 150 Suite 300 Minneapolis, Minnesota 55435 San diego, ca 92130