Ryan Nichols

Where the rubber hits the road for Sales 2.0

By Ryan Nichols
November 09, 2010 10:27 AM EST

SAP, Microsoft, Oracle, and the other legacy CRM gorillas shared their vision for Sales 2.0 with the world yesterday, at the Sales & Marketing 2.0 Conference in San Francisco.  My beef?  We're talking about all the right ideas, built on exactly the wrong technology.

SAP is a great example.  Chris Ball (who runs SAP's western sales region) and Jonathan Becher (who runs SAP's product marketing) absolutely "get" Sales 2.0-- they were up on stage at the conference talking about how their customers are more concerned about transforming their business in these turbulent times than they are about the ERP expertise that has gotten SAP to where it is today.  They know that they need to help their clients become customer-centric rather than product-centric (and move in that direction themselves as a company).

Yet during the Q&A, one SAP customer in the audience summed up the experience of many: "It's been a disaster," she said of their SAP implementation.

The root cause is a classic catch 22 with on-premise technology.  This customer was encouraged to use SAP out of the box-- which is generally good advice, as anyone who has tried to upgrade a modified SAP system will tell you.  But that required them to make needless changes to their business processes to fit the vanilla software... and then perform an upgrade less than a year later in order to get missing required features.

Here's the core issue: technology optimized for change is fundamentally different than technology optimized for the seldom-changing core.

This is borne out in the market: "I have customers who are going to Workday for HR, to Salesforce.com for SFA," said SAP's Chris Ball.  "They're still an SAP customer, and will be for a long time, but they're eroding me at the edges."

This is often used as a criticism of SaaS applications-- that they're only being adopted "at the edge."  But that's exactly where enterprises have the biggest need for solutions that are quick to get up and running, inexpensive to scale up and down, and easy to change with market conditions.  This is technology optimized for change.  

That's the disconnect with the presentations at Sales 2.0.  Microsoft's demonstration of what's possible with their upcoming "social" release of Dynamics CRM 2011 is very impressive...  but achieving that experience requires the costly implementation of dozens of different Microsoft server technologies, including Exchange, Sharepoint, Communications Server, and of course, the CRM system itself.  That's true of Oracle's Social CRM, and what SAP has to offer as well.  And if you want to bring these systems together?  Look no further than the attempted relaunch of SAP & Microsoft's "Duet" after 3 years of failure.  Exactly the right ideas, built on exactly the wrong technology.

What about companies who are trying support Sales 2.0 using cloud technology, like Salesforce and Google?  Its a different story.  Look at Brady, a $1.5B manufacturer that describes itself as an "accidental cloud leader" thanks to their use of Salesforce and Google Apps (read the full article here).  

"We're connecting our Salesforce CRM and Google collaboration platforms so if employees are in one system they don't need to re-enter or change information in other systems," said Matt Vanderbush, their head of IT strategy.  "We think this is a way to make our employees more productive, encourage even greater adoption of the systems we have, and improve the quality of data we have in these systems at the same time."

And because these are cloud-based systems, there's no hardware to buy, no middleware to install, and nothing to upgrade or patch before you can get started. This is the technology that Gartner is calling "cloud brokerage," and its exactly the RIGHT technology to power Sales 2.0 (more on that technology here, and my own demonstration of what's possible using this technology here)

Thanks in part to conferences like Sales 2.0, we've completely changed how we talk about successful sales and marketing over the past 3 years. The way that most organizations actually sell and market their offerings hasn't kept pace, thanks at least in part to the on-premise technology at the core of many "Sales 2.0" offerings.

Ryan Nichols is the Vice President of Cloudsourcing and Cloud Strategy for Appirio.