G00251842

Magic Quadrant for Sales Force AutomationPublished: 17 July 2013

Analyst(s): Robert P. Desisto, Patrick Stakenas

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

Market Definition/DescriptionSales force automation (SFA) applications support the automation of sales activities, processes andadministrative responsibilities for B2B organizations' sales professionals. Core functionalitiesinclude account, contact and opportunity management. Additional add-on capabilities focus onimproving the sales effectiveness of salespeople. Among those capabilities are sales configuration,guided selling, proposal generation and content management, and sales performance managementsupport, including incentive compensation, quota, sales coaching and territory management.

Magic QuadrantFigure 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 salesfunctionality, such as opportunity, account and pipeline management, as well as forecasting andanalytics. 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 thesecustomers 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 inIndia, 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.

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Cautions

■ Direct geographic coverage or business outside the core geographies of India, Southeast Asiaand 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 inaddition to core opportunity management; however, CRMnext is not included in Gartner CRMMagic Quadrants and MarketScopes that evaluate noncore SFA functionality.

■ Reporting is sufficient for most customers, but some references believe CRMnext couldimprove 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 functionof customers moving to the cloud, rather than differences in the product line. Organizationsconsider Microsoft Dynamics CRM on-premises primarily for: (1) the potential for more-attractivetotal cost of ownership (TCO) versus using cloud-based offerings, (2) integration with MicrosoftOutlook and the ability to leverage the Microsoft technology stack, such as SharePoint and SQLServer, 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 asMicrosoft SharePoint for collaboration and content management, Microsoft Lync for presenceand IM, Microsoft Visual Studio for extended customization and Microsoft Outlook forcustomers 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 verticalexpertise 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) showpromise, but will need to be proven.

■ Non-Microsoft IT organizations need to invest to improve their Microsoft technical stackcapabilities. For example, many customers will need to use SQL Server Reporting Services forcomplex analytics.

■ Microsoft needs to improve its ability to directly sell value to the VP of sales.

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■ Releases of new functionality will be once a year; the online version will have new functionalreleases twice a year, so there may be a slight lag in announced capabilities for the on-premisesversion.

Microsoft (Dynamics CRM Online)

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

Cautions

■ Reporting and analytics are not as flexible online as on-premises. Most customers with complexreporting and analytics needs will bring the data on-premises and use SQL Server ReportingServices.

■ Microsoft does not provide a development sandbox, which is a problem for customers thatwant to test development or configuration changes prior to production in the cloud. With theMicrosoft Polaris release, customers can buy additional instances for testing or development inthe cloud. Microsoft enables customers to develop on-premises locally. Then, through theMicrosoft 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) showpromise, 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/financialaccounting offering. Although NetSuite's focus remains on financial accounting and ERPfunctionality, 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 haveyet to see NetSuite show strong market presence in SFA-only deployments.

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Strengths

■ Consistent growth with public company status provides strength and business modeltransparency.

■ SFA functionality expansion to include aspects of sales performance management (salesincentive compensation, territory management and quota management) along with a broaderSFA suite show market maturity and understanding of the sales organization's needs.

■ NetSuite's "unlimited" bundling tends to make product and pricing options simpler forcustomers and prospects that have 500 or more users, and need many modules and supportfor multiple interfaces between NetSuite and other systems.

■ NetSuite's customization and configuration enable its product to be tailored to a customer salesorganization's specific selling requirements.

Cautions

■ NetSuite continues to focus on SMBs and divisions of large companies; consequently, moresophisticated functionality in the demand creation side of sales has not progressed as fast asother more core SFA functionality.

■ NetSuite has been slow to adopt mobile functionality to support the explosion of devicetechnology from tablets and smartphones during the past 18 months.

■ Market emphasis continues to be on financial accounting and other ERP-related processes, notCRM 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 executionin the past 12 months. Oracle salespeople now lead with Oracle Sales Cloud for all SaaS and moston-premises (when deployed on-premises, Oracle Sales Cloud is referred to as Oracle Sales) newcustomer 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 withOracle Sales Cloud functionality. Customers continue to validate new features specifically foranalytics-based territory management, mobility and the Application Extensibility Framework.However, clients also state there are reliable products companies expect with any new offering. Ingeneral, Oracle has been responsive to fixing issues.

Strengths

■ Embedded analytics expands the territory management capabilities of sales operationsmanagers.

■ Oracle shows improved execution for sales and customer projects year over year.

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■ Oracle Sales Cloud's application extensibility framework is used for configuration andcustomization 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 owntechnology stack with its own configuration and development tools.

Cautions

■ Early customers sited various issues, ranging from performance to quality, that ultimately getresolved, 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 databetween Oracle Sales Cloud and Oracle Service Cloud, both offerings are on two differenttechnology 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-sectorrequirements should consider Oracle Siebel CRM, rather than Oracle Sales Cloud. Oracle SalesCloud is not focused on deep vertical functionality.

■ Although Oracle Sales Cloud functionality can capture the attention of the VP of sales, Oraclesalespeople tend to talk to IT organizations.

Oracle (Siebel CRM)

Oracle Siebel CRM is a viable offering for complex on-premises deployments for the foreseeablefuture. Although market share is less than it was three years ago, Oracle has increased the numberof customers on versions 8.0 and 8.1. Oracle Siebel CRM continues to have the broadest set of SFAfunctions in the market. Most Oracle Siebel CRM customers buy it because they want the majorityof functionality from one suite vendor. However, the broad set of functionality and on-premisesdelivery 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 customershave had with the Oracle Siebel CRM was the UI. Siebel was dependent on ActiveX technology andInternet Explorer. Since last year, there have been two major developments around Oracle SiebelCRM: (1) The release of the Oracle Open UI. The Oracle Open UI is not tied to a specific browsertechnology; therefore, it will significantly improve the user experience. There is not enough data yetto validate potential limitations. (2) The release of Oracle Siebel CRM Connected Mobile Applicationfor any HTML5-compliant device, such as smartphones and tablets.

Strengths

■ A proven, deep and broad sales functionality (e.g., order management, sales configuration andpricing) 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 analyticsand reporting.

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■ 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, themajority 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 toSMBs. Those businesses typically are willing to forgo functionality and on-premisesdeployments for simplicity of SaaS. Oracle offers private hosting for Oracle Siebel CRM, butmarkets Oracle Fusion CRM as its SaaS offering.

Pivotal

Pivotal emerged in August 2012 as a result of acquisitions by Vista Equity Partners when theycompleted 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-focusedcompanies 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 softwareinfrastructure and applications, with a focus on areas such as embedded Microsoft SharePointtechnology.

■ References report ease of configuration of applications and broad functionality for the coreoffering, 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 nextstep 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 andinnovation; however, its products remain expensive. The main reasons customers choosesalesforce.com is strong brand, usability, innovation and proven track record. Salesforce.com has astrong 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

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penetration outside its core strength in North America. Its acquisition of ExactTarget should improvethe lead-through-opportunity management process.

Strengths

■ Salesforce.com continues to stay in front of the innovation curve by improving breadth anddepth of capabilities for social media technology, Chatter and mobile offerings, such as theiPad.

■ Salesforce.com offers improved application agility, due to the ease of use of the Force.complatform, 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 becareful 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 thisarea first by exposing data through Analytics API for third-party viewers, and ultimately willenhance 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., leadmanagement, incentive compensation, sales configuration and pricing management); usersneed to do their own analyses of AppExchange providers, and should not assume thatsalesforce.com has vetted them.

■ The vendor provides a basic Master Services Agreement; however, it continues to lag in itsability 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 channelsas its primary go-to-market strategy, it has a clear focus on SMBs and directs its efforts tosupporting 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 soundchoice with broad functionality and low cost.

Strengths

■ Sage's offering is a good economical solution for SMBs seeking an alternative to better-knownCRM technology vendors.

■ Sage CRM features have solid end-user adoption and good customer references.

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■ Sage CRM's ease of configuration and customization allow for flexibility in supporting the needsof the sales organization.

■ It integrates with Sage ERP offerings.

Cautions

■ The sales functional footprint only supports basic SFA. When users' needs go beyond the SFAbasics, the system must be configured or customized to meet the needs of the salesorganization.

■ Sage continues to have limited market visibility, and few inquiries from Gartner clients creatingSFA vendor shortlists.

■ Geographic penetration remains focused on EMEA. The sale of Sage SalesLogix should providemore 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 companycontinues to show strong business results overall. However, SAP still has difficulty in the fieldproviding a vision directly to the VP of sales. SAP often relies on IT to carry the message to thesales 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 andSAP BusinessObjects.

■ Support for a broad range of mobile devices, tablets and smartphones is an attractive attributecited by many SAP users.

■ The SFA footprint offers a wide range of CRM functionality, including sales opportunitymanagement, marketing, customer service and sales performance management.

Cautions

■ Sales organizations may be challenged to win the mind share of their IT departments — i.e., tomake SFA projects a high priority.

■ Microsoft Outlook integration lacks automation and continues to be cumbersome, requiring asignificant amount of user interaction. Server-side integration is functional, but needs morebidirectional behavior.

■ Managing the cost and complexity of enterprise applications and dependencies on other SAPmiddleware is a challenge.

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■ SAP CRM is a different product than SAP Customer OnDemand, so do not assume migration ispossible 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 validatedcustomers that are using the offering for SFA. A significant number of customers are using SAP'siPad application for access to SAP Cloud for Sales. Integration with back-end SAP ERP continuesto be the top reason why customers choose SAP Cloud for Sales. SAP has also consolidated CRMproduct management with the SAP on-premises offering to provide more synergy over the longterm, which has been an issue in the past. SAP customers should consider SAP Cloud for Sales forSFA needs.

Strengths

■ SAP Cloud for Sales can integrate with SAP ERP, SAP CRM on-premises and SAP Jam forsocial 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-basedservices.

Cautions

■ Although there are a few large customers (more than 1,000 users) in the process to deploy SAPCloud for Sales, there are no live proof points.

■ The customization and configuration environment is not as simple to use compared with leadingSaaS SFA products.

■ Because the SAP on-premises product is fundamentally a different product than SAP Cloud forSales, 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 $90million range in revenue. SugarCRM offers multiple delivery models (SaaS, on-premises, hosted) ata competitive price point. SugarCRM continues to innovate its product lines, as well as leverage itsopen-source heritage for ecosystem development. SugarCRM's cloud-neutral strategy enablescustomers 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 likeHTML5, REST, JavaScript and PHP.

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■ SugarCRM provides an attractive, easy-to-understand pricing model; customers pay the samesubscription 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 mostsuccess with SMBs and is in the process of expanding direct sales and partnerships to supportlarger SFA implementations. Gartner has seen an uptick in sales organizations over 500 usersconsidering SugarCRM.

■ SugarCRM has shown improvement in increasing the depth and breadth of the ecosystem inthe past 12 months, but is still lagging behind more-established ecosystems of leaders in theMagic Quadrant. SugarCRM has an emerging marketplace of ISVs called SugarExchange.comand 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 onthe operational burden of running software on-premises.

Swiftpage

In March 2013, Swiftpage acquired Act and SalesLogix from Sage. Swiftpage's core offeringprovides for email and digital marketing tools marketed as accessible and easy to use. TheSwiftpage placement primarily reflects the position of SalesLogix preacquisition by Swiftpage. In thepast 12 months, Gartner saw a decline in new SalesLogix customer business, and higher churnrates 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, whichwas difficult under the Sage ownership. SalesLogix appears to complement Swiftpage's emailmarketing, 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 numberthat is higher in its primary market target of SMB. SalesLogix can be run on a public cloudinfrastructure (Amazon) that, according to the company, is gaining momentum. About 75% of newSalesLogix deals in 2Q13 were public cloud versus on-premises.

Strengths

■ Swiftpage offers full-scale digital marketing solutions (email and social media) integrated withinSalesLogix.

■ SalesLogix has mobile capabilities to extend both smartphone and tablet devices.

■ SalesLogix has good extensibility and flexibility.

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Cautions

■ Swiftpage markets SalesLogix primarily through a third-party partner network, but has a limitedecosystem 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 SFAtechnology getting lost in the mix is ever-present. However, Swiftpage also gained some keyresources from the Sage SalesLogix acquisition, so Gartner expects a revised vision anddirection in the next six months.

■ The SalesLogix offering is broadened with email marketing functionality; however, the functionalfootprint is still focused on core opportunity management and lacks capabilities such as salesconfiguration, pricing management, incentive compensation or performance management thatgenerally round out an SFA offering.

■ Gartner saw a decline in Sage SalesLogix new customer evaluations last year, but expectsmore 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 forSaaS SFA. Zoho offers a broad suite of functionality often seen with larger SFA vendors. Zoho'sfreemium offering (i.e., no price for the offering) is an attractive starting point for many smallbusinesses, and its low-priced SaaS offering makes it an affordable option compared with morewell-known CRM companies.

Strengths

■ Zoho offers a low-cost solution that has a user-friendly UI, is easily configurable, and offers awide range of features and functionality.

■ Its extensive suite of sales applications range from core SFA technology to sales quota andforecasting, pipeline management, price quoting tools, sales reporting and dashboards.

■ Zoho's solution is attractive for small companies looking for big-company functionality at a lowSaaS price.

■ It has a large installed base of more than 35,000; however, the majority of the customers have10 or fewer users.

Cautions

■ Zoho relies on a pull model from existing customers with a small direct sales team, and afreemium offering as its go-to-market strategy, along with a targeted channel network creatinglimited visibility in the marketplace.

■ Zoho offers free-of-charge support during the evaluation stage; however, customers must relyon partners or a paid service for Zoho phone support and SLAs once they go live. Zoho offersfree support via email for customers using the freemium offering.

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■ Customers report that Zoho needs to spend more time on quality assurance before releasingnew 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 marketschange. As a result of these adjustments, the mix of vendors in any Magic Quadrant orMarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope oneyear and not the next does not necessarily indicate that we have changed our opinion of thatvendor. This may be a reflection of a change in the market and, therefore, changed evaluationcriteria, 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 CriteriaTo be included in this Magic Quadrant, a vendor must demonstrate that it has:

■ Proven ability to deliver opportunity management systems with software released during thepast 18 months; a new offering from an established vendor in this market will also beconsidered if it can be validated with customers.

■ At least five new, named customers that have actively deployed opportunity managementfunctionality during the past 12 months.

■ Customers that are using B2B opportunity management as the primary sales application in atleast three industries.

■ At least $15 million in annual company revenue.

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■ Customer presence in more than one of the following regions: North America, EMEA, LatinAmerica or Asia/Pacific.

Evaluation Criteria

Ability to Execute

Product/Service (Weight — High): SFA applications include capabilities for opportunitymanagement, including contact management, account management and sales pipeline andforecasting; sales-effectiveness applications, including guided selling, sales configuration, quotationmanagement and content management; and sales performance management, including incentivecompensation, quota and territory management and sales coaching (see "A Framework forEvaluating Sales Force Automation Application Functionality").

Different sales organizations require different levels of depth and complexity of capabilities. Vendorsthat 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 focusedon 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 whichrequire third-party vendors. A key evaluation criterion is how well the SFA vendor's applicationintegrates with third-party products and customer data sources. This is measured primarily by thenumber and complexity of data and application integrations, as demonstrated by live customerdeployments. Vendors that have fostered an ecosystem of value-added application suppliers andpartners will rate well for this subcategory.

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

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

Opportunity management capabilities are weighted more heavily than other SFA applicationbuilding blocks. This reflects market demand for SFA functionality by sales organizations. Thevendor must have a stable product development team for each product module it sells. Increasedemphasis 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 aproduct, including support of current and future releases, as well as a clear road map for the nextthree years. The vendor must have the cash on hand and consistent revenue growth during fourquarters to fund employee burn rates and to generate profits. The vendor is also rated on itscommitment and ability to generate revenue and profits specifically in the SFA market.

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

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

Marketing Execution (Weight — Low): This refers to the clarity, quality, creativity and efficacy ofprograms designed to deliver the vendor's message to influence the market, promote its brand andbusiness, 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 availablereleases during the past 12 to 18 months is an important consideration. Sources of feedbackinclude vendor-supplied references, Gartner inquiries and other customer-facing interactions, suchas Gartner conferences. Customers' experiences are evaluated based on the vendor's ability to helpcustomers achieve positive business value, as well as sustained user adoption, qualityimplementation and ongoing support.

Operations (Weight — Standard): The last criterion we evaluate in this category is theorganization's ability to meet its goals and commitments. Factors include the quality of theorganizational structure — skills, experiences, programs, systems and other vehicles that enable theorganization 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 tomeet 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)

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Completeness of Vision

Market Understanding (No Weighting)

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

Sales Strategy (Weight — Low): The strategy for selling SFA software uses the appropriatenetwork of direct and indirect sales, marketing, service and communication affiliates that extend thescope 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 andtiming, and partner alliances.

Offering (Product) Strategy (Weight — High): The vendor should demonstrate a vision for newapplication functionality across the breadth and depth of product capabilities; this is critical formeeting the needs of a maturing market. Subcriteria include the vendor's vision for opportunitymanagement; sales effectiveness capabilities, such as guided selling, sales configuration, quotemanagement and content management; sales performance management, including incentivecompensation, quota management and territory management, and sales coaching; access andarchitecture (such as openness, flexibility, extensibility and usability); and sales reporting andanalytics. The product strategy can be a combination of organic development, acquisition and/orecosystems. 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 theywill be successful in the SFA market. These business plans should include appropriate levels ofinvestment 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 capitalfor competitive advantage or investments in new areas, such as social collaboration, cloudcomputing and SaaS; or new devices, such as the iPad; or new technology directions, such as theGartner 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 geographyand market (see Table 2).

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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 executivesachieve business objectives. Leaders have the ability to execute against that vision throughproducts, 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 NichePlayers quadrant, and demonstrate a higher volume of new business for SFA. These vendors havethe size to compete worldwide; but, in some cases, they may not be able to execute equally well inall geographies. They understand the evolving needs of a sales organization, yet may not leadcustomers into new functional areas with their strong functional vision. Challengers tend to have agood technology vision for architecture and other IT organizational considerations, but have notwon the over top sales executives.

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Visionaries

Visionaries are ahead of most potential competitors in delivering innovative products and/or deliverymodels. They anticipate emerging/changing sales needs, and move the market ahead into areaswhere 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, maynot show the ability to consistently handle deployments of more than 500 users across multiplegeographies or may lack strong business execution in the SFA market. Niche Players may offercomplete portfolios for a specific vertical, but face challenges in one or more important areas tosupport cross-industry requirements, such as complex forecasting or sales effectiveness. They mayhave an inconsistent implementation track record, or may lack the ability to support large-enterpriserequirements. Despite the issues described, Niche Players, in many cases, can offer the bestsolutions to meet the needs of particular sales organizations, considering the price/value ratio forthe solution.

ContextAll vendors included in the 2013 Magic Quadrant for SFA have customers that are successfullyusing their products and services; however, this is not an exhaustive list. Some regional and/orvertical industry SFA specialists did not meet our inclusion criteria. This Magic Quadrantencompasses 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 andsophistication. Regardless of the provider you're considering, ask: "Will this vendor help my salesorganization sell more effectively?" In many cases, a sales organization must evaluate not just avendor's suite of product offerings, but also the ecosystem of providers that can fill in functionalwhite 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 thecapacity 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. TheMagic Quadrant for SFA is not designed to be the sole tool for creating a vendor shortlist. Use it aspart 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 stopdata collection efforts at a consistent time. In this research, the cutoff date was 7 June 2013.

Market OverviewIn 2012, $4.7 billion was invested in sales applications. SFA deployments continue to focus on corefunctional 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

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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 augmentcore SFA initiatives. Smartphones and iPads continue to dominate the discussion to improve mobileaccessibility.

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 ofroles, 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 opportunitymanagement 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 andperformance attributes to manage large volumes of data. Many vendors in the Niche Playersquadrant 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 thefunctional components that best satisfy organizational and individual sales requirements.

Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market"

"A Framework for Evaluating Sales Force Automation Application Functionality"

"Sales Opportunity Management Analytics Are Key to a Successful Strategy"

"Toolkit for Developing a Pace-Layered Application Strategy for Sales"

"Strengthen Sales With the Eight Building Blocks of Sales Performance Management"

"Toolkit: Sample RFP Template for Sales Force Automation Solutions"

"Develop a Framework for Evaluating Sales Force Automation Application Functionality"

Gartner, Inc. | G00251842 Page 19 of 22

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 includesan assessment of the overall organization's financial health, the financial and practicalsuccess of the business unit, and the likelihood that the individual business unit willcontinue investing in the product, will continue offering the product and will advancethe state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and thestructure 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, beflexible and achieve competitive success as opportunities develop, competitors act,customer needs evolve and market dynamics change. This criterion also considers thevendor's history of responsiveness.

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

Customer Experience: Relationships, products and services/programs that enableclients to be successful with the products evaluated. Specifically, this includes the wayscustomers receive technical support or account support. This can also include ancillarytools, 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. Factorsinclude the quality of the organizational structure, including skills, experiences,programs, systems and other vehicles that enable the organization to operateeffectively and efficiently on an ongoing basis.

Completeness of Vision

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

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Marketing Strategy: A clear, differentiated set of messages consistentlycommunicated 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 ofdirect and indirect sales, marketing, service and communication affiliates that extendthe scope and depth of market reach, skills, expertise, technologies, services and thecustomer base.

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

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

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

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 tomeet the specific needs of geographies outside the "home" or native geography, eitherdirectly or through partners, channels and subsidiaries as appropriate for thatgeography and market.

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