Magic Quadrant for Sales Force Automation

17 July 2013 ID:G00251842
Analyst(s): Robert P. Desisto, Patrick Stakenas

VIEW SUMMARY

This Magic Quadrant for SFA, specifically for B2B sales professionals, has new entrants and reflects new market dynamics. Mobility via smartphones and tablets is on the rise, and social is becoming more important, while sales performance management plays a major role in our evaluation criteria.

Market Definition/Description

Sales force automation (SFA) applications support the automation of sales activities, processes and administrative responsibilities for B2B organizations' sales professionals. Core functionalities include account, contact and opportunity management. Additional add-on capabilities focus on improving the sales effectiveness of salespeople. Among those capabilities are sales configuration, guided selling, proposal generation and content management, and sales performance management support, including incentive compensation, quota, sales coaching and territory management.

Magic Quadrant

Figure 1. Magic Quadrant for Sales Force Automation
Figure 1.Magic Quadrant for Sales Force Automation

Source: Gartner (July 2013)

Vendor Strengths and Cautions

CRMnext

CRMnext is a new entrant on the SFA Magic Quadrant. CRMnext's "sweet spot" is core sales functionality, such as opportunity, account and pipeline management, as well as forecasting and analytics. Based in India, CRMnext also has a presence in Asia/Pacific and the Middle East. CRMnext is a small vendor, and Gartner estimates that its annual revenue is less than $20 million. However, it has many large customers, each with over 1,000 users live. The majority of these customers are based in India. CRMnext supports SaaS and on-premises with the same product, and both versions are priced in the lower range for SFA solutions. CRMnext has direct channels in India, Southeast Asia and the Middle East, but relies on partners outside those regions.

Strengths
  • It has an attractive price point.
  • CRMnext is strong in India, with large, proven deployments.
  • An on-premises deployment option is ideal for industries concerned with cloud computing.
  • There is a good software upgrade path, and a reliable service track record with customers.
Cautions
  • Direct geographic coverage or business outside the core geographies of India, Southeast Asia and the Middle East is limited.
  • It is a relatively small vendor in the mature SFA market.
  • It lacks a significant ecosystem to fill in noncore capabilities (e.g., configure, price and quote [CPQ], and sales performance management). CRMnext states it provides many capabilities in addition to core opportunity management; however, CRMnext is not included in Gartner CRM Magic Quadrants and MarketScopes that evaluate noncore SFA functionality.
  • Reporting is sufficient for most customers, but some references believe CRMnext could improve complex report building.

Microsoft (Dynamics CRM)

Microsoft offers Microsoft Dynamics CRM both online and on-premises. Here, we focus on the on-premises version. Both products are relatively the same, and the move to online is more a function of customers moving to the cloud, rather than differences in the product line. Organizations consider Microsoft Dynamics CRM on-premises primarily for: (1) the potential for more-attractive total cost of ownership (TCO) versus using cloud-based offerings, (2) integration with Microsoft Outlook and the ability to leverage the Microsoft technology stack, such as SharePoint and SQL Server, and (3) to avoid data privacy and real-time integration issues associated with the cloud.

Strengths
  • Microsoft Dynamics CRM integrates with the Microsoft technology stack assets, such as Microsoft SharePoint for collaboration and content management, Microsoft Lync for presence and IM, Microsoft Visual Studio for extended customization and Microsoft Outlook for customers to leverage their Microsoft investments.
  • New process UI significantly improves the user experience.
  • A broad partner delivery network provides the breadth of application add-ons, industry vertical expertise and implementation capabilities.
  • Interoperability is available between the Microsoft Dynamics on-premises and SaaS versions.
Cautions
  • Smartphone (target release 4Q13) and iPad/Windows 8 tablet (target release 4Q13) show promise, but will need to be proven.
  • Non-Microsoft IT organizations need to invest to improve their Microsoft technical stack capabilities. For example, many customers will need to use SQL Server Reporting Services for complex analytics.
  • Microsoft needs to improve its ability to directly sell value to the VP of sales.
  • Releases of new functionality will be once a year; the online version will have new functional releases twice a year, so there may be a slight lag in announced capabilities for the on-premises version.

Microsoft (Dynamics CRM Online)

Microsoft Dynamics CRM Online continued its momentum in 2012. Large sales organizations with more than 500 users have begun to consider and select the product. The offering is functionally equivalent to Microsoft Dynamics CRM on-premises, but there will be variances because the online version is on a different release cycle than on-premises (twice a year for online versus once a year for on-premises).

Strengths
  • New process-centric UI will enhance the user experience.
  • Increased R&D investment is applied to other Microsoft products, such as SharePoint, Lync, Yammer and Skype.
  • There is a common data model with the Microsoft Dynamics CRM on-premises offering.
  • The Microsoft per-user, per-month price remains at the mid to lower end of pricing for SFA SaaS offerings.
Cautions
  • Reporting and analytics are not as flexible online as on-premises. Most customers with complex reporting and analytics needs will bring the data on-premises and use SQL Server Reporting Services.
  • Microsoft does not provide a development sandbox, which is a problem for customers that want to test development or configuration changes prior to production in the cloud. With the Microsoft Polaris release, customers can buy additional instances for testing or development in the cloud. Microsoft enables customers to develop on-premises locally. Then, through the Microsoft Dynamics CRM Online solution management capabilities, users can move the on-premises configuration and customization changes to the online environment.
  • Smartphone (target release 4Q13) and iPad/Windows 8 tablet (target release 4Q13) show promise, but will need to be proven.

NetSuite

NetSuite continued to exhibit substantial growth in business viability in 2012, ending the year with $308.8 million in revenue. However, the majority of NetSuite revenue is related to its ERP/financial accounting offering. Although NetSuite's focus remains on financial accounting and ERP functionality, its sales module continues to be an attractive option for small or midsize businesses (SMBs) or divisions of larger companies that are also implementing NetSuite's ERP suite; we have yet to see NetSuite show strong market presence in SFA-only deployments.

Strengths
  • Consistent growth with public company status provides strength and business model transparency.
  • SFA functionality expansion to include aspects of sales performance management (sales incentive compensation, territory management and quota management) along with a broader SFA suite show market maturity and understanding of the sales organization's needs.
  • NetSuite's "unlimited" bundling tends to make product and pricing options simpler for customers and prospects that have 500 or more users, and need many modules and support for multiple interfaces between NetSuite and other systems.
  • NetSuite's customization and configuration enable its product to be tailored to a customer sales organization's specific selling requirements.
Cautions
  • NetSuite continues to focus on SMBs and divisions of large companies; consequently, more sophisticated functionality in the demand creation side of sales has not progressed as fast as other more core SFA functionality.
  • NetSuite has been slow to adopt mobile functionality to support the explosion of device technology from tablets and smartphones during the past 18 months.
  • Market emphasis continues to be on financial accounting and other ERP-related processes, not CRM for sales or SFA. Gartner rarely sees NetSuite SFA-only deal evaluations.

Oracle (Sales Cloud)

Oracle Fusion CRM has been renamed Oracle Sales Cloud. Oracle has improved its sales execution in the past 12 months. Oracle salespeople now lead with Oracle Sales Cloud for all SaaS and most on-premises (when deployed on-premises, Oracle Sales Cloud is referred to as Oracle Sales) new customer situations. Most of the customers have some other Oracle application, such as Oracle E-Business Suite. Gartner estimates that there are more than 30 customers in live deployment with Oracle Sales Cloud functionality. Customers continue to validate new features specifically for analytics-based territory management, mobility and the Application Extensibility Framework. However, clients also state there are reliable products companies expect with any new offering. In general, Oracle has been responsive to fixing issues.

Strengths
  • Embedded analytics expands the territory management capabilities of sales operations managers.
  • Oracle shows improved execution for sales and customer projects year over year.
  • Oracle Sales Cloud's application extensibility framework is used for configuration and customization for browser- and mobile-based deployments.
  • With its acquisition of Eloqua, Oracle has the potential to support the entire lead-through-opportunity management process; but other than integration, Eloqua will remain on its own technology stack with its own configuration and development tools.
Cautions
  • Early customers sited various issues, ranging from performance to quality, that ultimately get resolved, but could be issues for customers impatient with a new service offering.
  • Although Oracle provides the Oracle Customer Data Hub free of charge to integrate data between Oracle Sales Cloud and Oracle Service Cloud, both offerings are on two different technology stacks and have different configuration and development tools.
  • On-premises customers with deep vertical requirements in areas such as telecommunications, consumer packaged goods (CPG), retail/travel and transportation, and/or public-sector requirements should consider Oracle Siebel CRM, rather than Oracle Sales Cloud. Oracle Sales Cloud is not focused on deep vertical functionality.
  • Although Oracle Sales Cloud functionality can capture the attention of the VP of sales, Oracle salespeople tend to talk to IT organizations.

Oracle (Siebel CRM)

Oracle Siebel CRM is a viable offering for complex on-premises deployments for the foreseeable future. Although market share is less than it was three years ago, Oracle has increased the number of customers on versions 8.0 and 8.1. Oracle Siebel CRM continues to have the broadest set of SFA functions in the market. Most Oracle Siebel CRM customers buy it because they want the majority of functionality from one suite vendor. However, the broad set of functionality and on-premises delivery model are not incentives for third-party sales application independent software vendors (ISVs) to partner or preintegrate with Oracle Siebel CRM. One of the main challenges that customers have had with the Oracle Siebel CRM was the UI. Siebel was dependent on ActiveX technology and Internet Explorer. Since last year, there have been two major developments around Oracle Siebel CRM: (1) The release of the Oracle Open UI. The Oracle Open UI is not tied to a specific browser technology; therefore, it will significantly improve the user experience. There is not enough data yet to validate potential limitations. (2) The release of Oracle Siebel CRM Connected Mobile Application for any HTML5-compliant device, such as smartphones and tablets.

Strengths
  • A proven, deep and broad sales functionality (e.g., order management, sales configuration and pricing) is offered in many vertical industries for large-enterprise, large-scale deployments.
  • Flexibility, configuration and customization are key features.
  • Customers can leverage Oracle Business Intelligence Enterprise Edition (OBIEE) for analytics and reporting.
  • The user experience is improved, compared with previous Oracle Siebel CRM releases.
Cautions
  • Although some Oracle Siebel CRM customers give the Oracle Open UI a positive view, the majority of customers are in the evaluation stage or in some phase of initial deployment.
  • Deployment complexity is associated with on-premises, enterprise-class applications.
  • Due to the functional richness and associated costs, Oracle Siebel CRM is not attractive to SMBs. Those businesses typically are willing to forgo functionality and on-premises deployments for simplicity of SaaS. Oracle offers private hosting for Oracle Siebel CRM, but markets Oracle Fusion CRM as its SaaS offering.

Pivotal

Pivotal emerged in August 2012 as a result of acquisitions by Vista Equity Partners when they completed a buyout of CDC Software and Consona in April 2012. Pivotal is now part of Aptean. Pivotal SFA functionality is powered by Pivotal software. Pivotal is one of the few SFA-focused companies that have always used on-premises delivery for its software applications.

Strengths
  • Pivotal's key technical value proposition is its strong integration with the Microsoft software infrastructure and applications, with a focus on areas such as embedded Microsoft SharePoint technology.
  • References report ease of configuration of applications and broad functionality for the core offering, along with low complexity of the solution.
  • Pivotal has tight integration with Microsoft Outlook.
Cautions
  • Visibility of the product is limited in the SFA market.
  • The vendor lacks a SaaS offering.
  • Although buyout by Vista Equity Partners (now part of Aptean) has stabilized Pivotal, the next step is for Pivotal to differentiate itself in the market and within Aptean's product mix.

salesforce.com

Salesforce.com continues to lead the SFA market, as demonstrated by its business growth and innovation; however, its products remain expensive. The main reasons customers choose salesforce.com is strong brand, usability, innovation and proven track record. Salesforce.com has a strong ecosystem of ISVs; however, adding multiple solutions to fill salesforce.com's functional "white space" can be expensive. Salesforce.com needs to continue to improve its geographic penetration outside its core strength in North America. Its acquisition of ExactTarget should improve the lead-through-opportunity management process.

Strengths
  • Salesforce.com continues to stay in front of the innovation curve by improving breadth and depth of capabilities for social media technology, Chatter and mobile offerings, such as the iPad.
  • Salesforce.com offers improved application agility, due to the ease of use of the Force.com platform, which technically sophisticated business analysts can use.
  • Salesforce.com offers integrated sales and customer service on the same platform.
  • The vendor offers a proven infrastructure and is reliable.
Cautions
  • When considering salesforce.com's Social Enterprise License Agreement, companies should be careful not to buy subscriptions and functionality they will not need.
  • Simple, real-time reports and dashboards for business users are easy to create, but more in-depth analytics require an AppExchange partner. Salesforce.com is placing greater focus in this area first by exposing data through Analytics API for third-party viewers, and ultimately will enhance their own analytics technology over the next 12 to 18 months.
  • Salesforce.com relies on AppExchange vendors to provide a complete SFA solution (e.g., lead management, incentive compensation, sales configuration and pricing management); users need to do their own analyses of AppExchange providers, and should not assume that salesforce.com has vetted them.
  • The vendor provides a basic Master Services Agreement; however, it continues to lag in its ability to provide a strong SLA, including penalties with its customers.

Sage CRM

Sage CRM does not share the limelight with other, more well-known SFA systems. Using channels as its primary go-to-market strategy, it has a clear focus on SMBs and directs its efforts to supporting its partners and end-user customers. It's a SaaS offering with strong SFA functionality, an intuitive UI and affordable pricing. SMB sales organizations will find Sage CRM to be a sound choice with broad functionality and low cost.

Strengths
  • Sage's offering is a good economical solution for SMBs seeking an alternative to better-known CRM technology vendors.
  • Sage CRM features have solid end-user adoption and good customer references.
  • Sage CRM's ease of configuration and customization allow for flexibility in supporting the needs of the sales organization.
  • It integrates with Sage ERP offerings.
Cautions
  • The sales functional footprint only supports basic SFA. When users' needs go beyond the SFA basics, the system must be configured or customized to meet the needs of the sales organization.
  • Sage continues to have limited market visibility, and few inquiries from Gartner clients creating SFA vendor shortlists.
  • Geographic penetration remains focused on EMEA. The sale of Sage SalesLogix should provide more opportunity for Sage to focus on geographies such as North America.

SAP (CRM)

SAP CRM is most prevalent within its customer base of extended applications. SAP as a company continues to show strong business results overall. However, SAP still has difficulty in the field providing a vision directly to the VP of sales. SAP often relies on IT to carry the message to the sales organization. There has been an uptick in iPad-based deployments for SAP.

Strengths
  • Real-time integration exists between SAP CRM and SAP ERP.
  • Vendor references site integrated analytics between SAP NetWeaver Business Intelligence and SAP BusinessObjects.
  • Support for a broad range of mobile devices, tablets and smartphones is an attractive attribute cited by many SAP users.
  • The SFA footprint offers a wide range of CRM functionality, including sales opportunity management, marketing, customer service and sales performance management.
Cautions
  • Sales organizations may be challenged to win the mind share of their IT departments — i.e., to make SFA projects a high priority.
  • Microsoft Outlook integration lacks automation and continues to be cumbersome, requiring a significant amount of user interaction. Server-side integration is functional, but needs more bidirectional behavior.
  • Managing the cost and complexity of enterprise applications and dependencies on other SAP middleware is a challenge.
  • SAP CRM is a different product than SAP Customer OnDemand, so do not assume migration is possible from one to the other; but they can be used together through integration.

SAP (Cloud for Sales)

SAP Cloud for Sales is a new entrant on Gartner's Magic Quadrant. Gartner has validated customers that are using the offering for SFA. A significant number of customers are using SAP's iPad application for access to SAP Cloud for Sales. Integration with back-end SAP ERP continues to be the top reason why customers choose SAP Cloud for Sales. SAP has also consolidated CRM product management with the SAP on-premises offering to provide more synergy over the long term, which has been an issue in the past. SAP customers should consider SAP Cloud for Sales for SFA needs.

Strengths
  • SAP Cloud for Sales can integrate with SAP ERP, SAP CRM on-premises and SAP Jam for social collaboration.
  • The focus is on the user experience and support for mobile device delivery, such as the iPad.
  • Potential pricing could be attractive as SAP attempts to win market share for SFA cloud-based services.
Cautions
  • Although there are a few large customers (more than 1,000 users) in the process to deploy SAP Cloud for Sales, there are no live proof points.
  • The customization and configuration environment is not as simple to use compared with leading SaaS SFA products.
  • Because the SAP on-premises product is fundamentally a different product than SAP Cloud for Sales, customers should not assume they can migrate from one to the other.

SugarCRM

SugarCRM has continued its sales momentum and is in the (Gartner estimate) $85 million to $90 million range in revenue. SugarCRM offers multiple delivery models (SaaS, on-premises, hosted) at a competitive price point. SugarCRM continues to innovate its product lines, as well as leverage its open-source heritage for ecosystem development. SugarCRM's cloud-neutral strategy enables customers to run and move between SugarCRM deployments on a variety of cloud infrastructures.

Strengths
  • The mobile device, UI and social technology strategy have improved in the past 12 months.
  • A flexible customization environment leverages open industry-standard technologies like HTML5, REST, JavaScript and PHP.
  • SugarCRM provides an attractive, easy-to-understand pricing model; customers pay the same subscription price, regardless of model.
  • Global coverage has increased in areas such as EMEA.
Cautions
  • Although it signed a large deal with IBM in 2011 (75,000 users), SugarCRM has the most success with SMBs and is in the process of expanding direct sales and partnerships to support larger SFA implementations. Gartner has seen an uptick in sales organizations over 500 users considering SugarCRM.
  • SugarCRM has shown improvement in increasing the depth and breadth of the ecosystem in the past 12 months, but is still lagging behind more-established ecosystems of leaders in the Magic Quadrant. SugarCRM has an emerging marketplace of ISVs called SugarExchange.com and offers SugarForge.com, an open-source community.
  • One subscription price, regardless of delivery model, is easy for customers to understand; however, some customers question why they would not get a price break if they are taking on the operational burden of running software on-premises.

Swiftpage

In March 2013, Swiftpage acquired Act and SalesLogix from Sage. Swiftpage's core offering provides for email and digital marketing tools marketed as accessible and easy to use. The Swiftpage placement primarily reflects the position of SalesLogix preacquisition by Swiftpage. In the past 12 months, Gartner saw a decline in new SalesLogix customer business, and higher churn rates among existing SalesLogix customers. The Swiftpage position is not a result of acquisitions. Swiftpage has the opportunity to bring much needed focus and improvement to SalesLogix, which was difficult under the Sage ownership. SalesLogix appears to complement Swiftpage's email marketing, social media marketing and contact management solutions. SalesLogix is still an on-premises offering in a market where more than 50% of the market has gone with SaaS, a number that is higher in its primary market target of SMB. SalesLogix can be run on a public cloud infrastructure (Amazon) that, according to the company, is gaining momentum. About 75% of new SalesLogix deals in 2Q13 were public cloud versus on-premises.

Strengths
  • Swiftpage offers full-scale digital marketing solutions (email and social media) integrated within SalesLogix.
  • SalesLogix has mobile capabilities to extend both smartphone and tablet devices.
  • SalesLogix has good extensibility and flexibility.
Cautions
  • Swiftpage markets SalesLogix primarily through a third-party partner network, but has a limited ecosystem of ISV partners to build add-ons to SalesLogix.
  • With the acquisition and SalesLogix being a small part of overall revenue, the risk of the SFA technology getting lost in the mix is ever-present. However, Swiftpage also gained some key resources from the Sage SalesLogix acquisition, so Gartner expects a revised vision and direction in the next six months.
  • The SalesLogix offering is broadened with email marketing functionality; however, the functional footprint is still focused on core opportunity management and lacks capabilities such as sales configuration, pricing management, incentive compensation or performance management that generally round out an SFA offering.
  • Gartner saw a decline in Sage SalesLogix new customer evaluations last year, but expects more focus from Swiftpage. Sage SalesLogix was one of three CRM offerings.

Zoho

Zoho is showing up more often in the battle for the SMB marketplace as a low-cost provider for SaaS SFA. Zoho offers a broad suite of functionality often seen with larger SFA vendors. Zoho's freemium offering (i.e., no price for the offering) is an attractive starting point for many small businesses, and its low-priced SaaS offering makes it an affordable option compared with more well-known CRM companies.

Strengths
  • Zoho offers a low-cost solution that has a user-friendly UI, is easily configurable, and offers a wide range of features and functionality.
  • Its extensive suite of sales applications range from core SFA technology to sales quota and forecasting, pipeline management, price quoting tools, sales reporting and dashboards.
  • Zoho's solution is attractive for small companies looking for big-company functionality at a low SaaS price.
  • It has a large installed base of more than 35,000; however, the majority of the customers have 10 or fewer users.
Cautions
  • Zoho relies on a pull model from existing customers with a small direct sales team, and a freemium offering as its go-to-market strategy, along with a targeted channel network creating limited visibility in the marketplace.
  • Zoho offers free-of-charge support during the evaluation stage; however, customers must rely on partners or a paid service for Zoho phone support and SLAs once they go live. Zoho offers free support via email for customers using the freemium offering.
  • Customers report that Zoho needs to spend more time on quality assurance before releasing new versions and that there are limitations to reporting.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Added

  • CRMnext
  • Oracle (Sales Cloud)
  • Pivotal
  • SAP (Cloud for Sales)
  • Swiftpage

Dropped

  • CDC Software (Pivotal Sales) now known as Pivotal
  • Oracle (Fusion Sales); renamed Oracle (Sales Cloud)
  • Sage (Act); sold to Swiftpage
  • Sage (SalesLogix); acquired by Swiftpage

Inclusion and Exclusion Criteria

To be included in this Magic Quadrant, a vendor must demonstrate that it has:

  • Proven ability to deliver opportunity management systems with software released during the past 18 months; a new offering from an established vendor in this market will also be considered if it can be validated with customers.
  • At least five new, named customers that have actively deployed opportunity management functionality during the past 12 months.
  • Customers that are using B2B opportunity management as the primary sales application in at least three industries.
  • At least $15 million in annual company revenue.
  • Customer presence in more than one of the following regions: North America, EMEA, Latin America or Asia/Pacific.

Evaluation Criteria

Ability to Execute

Product/Service (Weight — High): SFA applications include capabilities for opportunity management, including contact management, account management and sales pipeline and forecasting; sales-effectiveness applications, including guided selling, sales configuration, quotation management and content management; and sales performance management, including incentive compensation, quota and territory management and sales coaching (see "A Framework for Evaluating Sales Force Automation Application Functionality").

Different sales organizations require different levels of depth and complexity of capabilities. Vendors that support a wide range of complexity have greater market potential and are rated accordingly. This is a cross-industry Magic Quadrant; therefore, the evaluation of a provider's offering is focused on the ability to serve several distinct industry sectors, not to provide industry-specific solutions.

In many cases, an SFA application will combine several functional components, some of which require third-party vendors. A key evaluation criterion is how well the SFA vendor's application integrates with third-party products and customer data sources. This is measured primarily by the number and complexity of data and application integrations, as demonstrated by live customer deployments. Vendors that have fostered an ecosystem of value-added application suppliers and partners will rate well for this subcategory.

Extra weight will also be applied to vendor support for tablets and smartphones. This includes the ability to provide access to relevant SFA functionality that is leveraging targeted device value-added benefits.

The overall vendor product/service functionality rating is developed by evaluating specific SFA functionality, mobile access and architecture (for example, openness, flexibility, usability and workflow), and sales reporting and analytics.

Opportunity management capabilities are weighted more heavily than other SFA application building blocks. This reflects market demand for SFA functionality by sales organizations. The vendor must have a stable product development team for each product module it sells. Increased emphasis will also be placed on the value that SFA applications provide directly to salespeople.

Overall Viability (Business Unit, Financial, Marketing Strategy, Organization) (Weight — Standard): Key aspects of this criterion are the vendor's ability to ensure continued vitality of a product, including support of current and future releases, as well as a clear road map for the next three years. The vendor must have the cash on hand and consistent revenue growth during four quarters to fund employee burn rates and to generate profits. The vendor is also rated on its commitment and ability to generate revenue and profits specifically in the SFA market.

Sales Execution/Pricing (Weight — Standard): The vendor must provide global sales and distribution coverage that aligns with its marketing messages. The provider must have specific experience and success selling SFA applications to sales buying centers (i.e., the VP of sales or sales operations).

Market Responsiveness and Track Record (Weight — High): We evaluate the vendor's ability to respond, change direction and be flexible to evolving customer needs and market dynamics. The criterion also considers the vendor's history of responsiveness.

Marketing Execution (Weight — Low): This refers to the clarity, quality, creativity and efficacy of programs designed to deliver the vendor's message to influence the market, promote its brand and business, increase awareness of its products, and establish a positive identification of the product, brand or vendor with buyers. This mind share can be driven by a combination of publicity, promotions, thought leadership, word of mouth and sales activities.

Customer Experience (Weight — High): Feedback from active customers on generally available releases during the past 12 to 18 months is an important consideration. Sources of feedback include vendor-supplied references, Gartner inquiries and other customer-facing interactions, such as Gartner conferences. Customers' experiences are evaluated based on the vendor's ability to help customers achieve positive business value, as well as sustained user adoption, quality implementation and ongoing support.

Operations (Weight — Standard): The last criterion we evaluate in this category is the organization's ability to meet its goals and commitments. Factors include the quality of the organizational structure — skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. For SaaS offerings, operations will also include the vendor's ability to manage operational infrastructure requirements to meet client demand (see Table 1).

Table 1. Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product/Service

High

Overall Viability (Business Unit, Financial, Strategy, Organization)

Standard

Sales Execution/Pricing

Standard

Market Responsiveness and Track Record

High

Marketing Execution

Low

Customer Experience

High

Operations

Standard

Source: Gartner (July 2013)

Completeness of Vision

Market Understanding (No Weighting)

Marketing Strategy (Weight — Low): A clear, differentiated marketing strategy has a set of messages that appeals to selling organizations and is consistently communicated throughout the organization and externalized through the website, customer programs and positioning statements.

Sales Strategy (Weight — Low): The strategy for selling SFA software uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Key elements of the strategy include a sales and distribution plan, internal investment priority and timing, and partner alliances.

Offering (Product) Strategy (Weight — High): The vendor should demonstrate a vision for new application functionality across the breadth and depth of product capabilities; this is critical for meeting the needs of a maturing market. Subcriteria include the vendor's vision for opportunity management; sales effectiveness capabilities, such as guided selling, sales configuration, quote management and content management; sales performance management, including incentive compensation, quota management and territory management, and sales coaching; access and architecture (such as openness, flexibility, extensibility and usability); and sales reporting and analytics. The product strategy can be a combination of organic development, acquisition and/or ecosystems. However, for ecosystems, close attention is paid to the quality and support of third-party partners.

Business Model (Weight — Standard): Vendors need to have clear business plans for how they will be successful in the SFA market. These business plans should include appropriate levels of investment to achieve profitability and healthy revenue growth during a three- to five-year period. Sales channel and partnership strategies are important components.

Vertical/Industry Strategy (No Weighting)

Innovation (Weight — High): Vendors must show a marshaling of resources, expertise or capital for competitive advantage or investments in new areas, such as social collaboration, cloud computing and SaaS; or new devices, such as the iPad; or new technology directions, such as the Gartner Nexus of Forces.

Geographic Strategy (Weight — Standard): We examine the vendor's strategy to direct resources, skills and offerings to meet the specific needs of regions outside the corporate headquarters' location, directly or through partners, channels and subsidiaries, as appropriate for that geography and market (see Table 2).

Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

No rating

Marketing Strategy

Low

Sales Strategy

Low

Offering (Product) Strategy

High

Business Model

Standard

Vertical/Industry Strategy

No rating

Innovation

High

Geographic Strategy

Standard

Source: Gartner (July 2013)

Quadrant Descriptions

Leaders

Leaders demonstrate a market-defining vision of how technology can help top sales executives achieve business objectives. Leaders have the ability to execute against that vision through products, services and demonstrated, solid business results in the form of revenue and earnings. Leaders have significant successful customer deployments in North America, EMEA and the Asia/Pacific region in a wide variety of vertical industries, with multiple proof points above 500 users. Leaders are often whom other providers in the market measure themselves against.

Challengers

The vendors in the Challengers quadrant are often larger than most (but not all) vendors in the Niche Players quadrant, and demonstrate a higher volume of new business for SFA. These vendors have the size to compete worldwide; but, in some cases, they may not be able to execute equally well in all geographies. They understand the evolving needs of a sales organization, yet may not lead customers into new functional areas with their strong functional vision. Challengers tend to have a good technology vision for architecture and other IT organizational considerations, but have not won the over top sales executives.

Visionaries

Visionaries are ahead of most potential competitors in delivering innovative products and/or delivery models. They anticipate emerging/changing sales needs, and move the market ahead into areas where it hasn't yet been. They have a strong potential to influence the direction of the SFA market, but are limited in execution and/or demonstrated track record.

Niche Players

Niche Players offer products for SFA functionality, but may lack some functional components, may not show the ability to consistently handle deployments of more than 500 users across multiple geographies or may lack strong business execution in the SFA market. Niche Players may offer complete portfolios for a specific vertical, but face challenges in one or more important areas to support cross-industry requirements, such as complex forecasting or sales effectiveness. They may have an inconsistent implementation track record, or may lack the ability to support large-enterprise requirements. Despite the issues described, Niche Players, in many cases, can offer the best solutions to meet the needs of particular sales organizations, considering the price/value ratio for the solution.

Context

All vendors included in the 2013 Magic Quadrant for SFA have customers that are successfully using their products and services; however, this is not an exhaustive list. Some regional and/or vertical industry SFA specialists did not meet our inclusion criteria. This Magic Quadrant encompasses a wide cross-section of vendors, including those that offer different delivery models (such as on-premises, hosted and SaaS), and differing levels of functional breadth and sophistication. Regardless of the provider you're considering, ask: "Will this vendor help my sales organization sell more effectively?" In many cases, a sales organization must evaluate not just a vendor's suite of product offerings, but also the ecosystem of providers that can fill in functional white space for capabilities the considered vendor on the Magic Quadrant may not offer.

Use this Magic Quadrant as a reference for evaluations, but explore the market further to qualify the capacity of each vendor to address your unique business problems and technical concerns. Depending on the complexity and scale of your requirements, your shortlist will be unique. The Magic Quadrant for SFA is not designed to be the sole tool for creating a vendor shortlist. Use it as part of your due diligence, and in conjunction with discussions with Gartner analysts.

Magic Quadrants are snapshots in time. To be fair and complete in the analysis, we need to stop data collection efforts at a consistent time. In this research, the cutoff date was 7 June 2013.

Market Overview

In 2012, $4.7 billion was invested in sales applications. SFA deployments continue to focus on core functional capabilities for accounts, contacts, opportunities, selling processes and sales operations. SFA requirements are unique for each B2B sales organization, based on the maturity and culture of the organization in its use of technology, sophistication of sales practices and anticipated ROI. Gartner sees an increase focused on sales performance management capabilities that augment core SFA initiatives. Smartphones and iPads continue to dominate the discussion to improve mobile accessibility.

SaaS continues to accelerate as the predominant delivery model for SFA.

Just as each sales organization is different, not all SFA systems are created equal. Furthermore, factors such as selling style, organizational size, sales processes, integration demands, diversity of roles, number of users and organizational structures are unique to each company.

SFA has distinct implications for each company:

  • Product-driven transactional sales organizations will find value in basic lead and opportunity management capabilities to reduce sales cycles and improve sales management visibility.
  • Large, complex sales organizations that support multitier, matrixed sales teams require role-specific functionality for inside field and strategic account salespeople, as well as scalability and performance attributes to manage large volumes of data. Many vendors in the Niche Players quadrant have better price/value alternatives for less-complex uses.
  • Consultative solution selling will require rich-content process support to tie together proposals, bids, configurations and quotes with authorizations and order-capture systems.
  • A successful vendor selection strategy will assess providers that support data requirements, access modes and functionality for each sales role. The sales processes will dictate the functional components that best satisfy organizational and individual sales requirements.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets and skills, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support and the overall effectiveness of the sales channel.

Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.