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Slide 1: SaleS, Marketing and Service convergence: HOW SAAS ECOSYSTEMS AND COLLABORATION TOOLS ARE REDEFINING CRM a tripletree industry analysis SPotligHt rePort WWW.triPle-tree.coM 7601 France ave S, Ste 150, MinneaPoliS, Mn 55435 12526 HigH BlUFF dr, Ste 300, San diego, ca 92130 952.253.5300
Slide 2: TABLE OF CONTENTS INTRODUCTION EXECUTIVE SUMMARY 2 3 4 6 10 14 16 18 21 24 26 TripleTree, LLC 7601 France Avenue South Suite 150 Minneapolis, MN 55435 Minneapolis t 952.253.5300 f 952.253.5301 San Diego t 858.792.3406 f 858.792.3407 www.triple-tree.com WHY CONVERGENCE IS HAPPENING ECOSYSTEMS COLLABORATION IT – SHIFTING MARKETING FROM ART TO SCIENCE MARKETING AUTOMATION THE CHANGING ROLE OF PROFESSIONAL SERVICES CONCLUSIONS APPENDIX THE TRIPLETREE TEAM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 1
Slide 3: INTRODUCTION Organizations are no longer making independent departmental decisions about how to best serve their clients. Driven by a range of compliance benchmarks, organizations have become aware of customer information silos. The result is that they are now internally focused on their varied customer touch points and where sales, marketing and service workflows and processes intersect. Externally, the impact of consumerism and the success of Internet communities are redefining how customer and business experiences can be managed. TripleTree is fanatical about understanding unique delivery models and how they can create value for emerging companies. Few domains are being impacted by innovative delivery models more than Customer Relationship Management (CRM). Thanks to this innovation, critical customer and business information can be shared, and performance can be measured by simple, powerful, common systems that are engineered to automate customer facing workflows. We’re convinced that the Software as a Service (SaaS) delivery model is a catalyst for the next generation of CRM. As the micro-disciplines of CRM link with Web 2.0 tools (specifically collaboration solutions), we believe Business Relationship Management could become a more meaningful description of the technologies and processes that mesh to frame the customer experience. For emerging vendors in the midst of this transformation, SaaS will create value for its investors because of the well known benefits of recurring revenue streams and lower costs of innovation. However, these firms will need to align with platform partners who can provide the infrastructure and logic around other core business components to truly emerge as leaders. This report reviews: - how the silos around sales, marketing and service are being torn down because of SaaS; - where leading vendor ecosystems are rationalizing new technology platforms that can impact CRM; - where Web 2.0 and collaboration tools are becoming competitive differentiators for CRM vendors; and For more on how TripleTree is helping growth businesses with investment banking, strategic capital and long term advisory services, please visit our website at www.triple-tree.com. - how the role of professional services is changing as SaaS proliferates. TripleTree continues to work with terrific firms seeking their next plateau of growth while also advising global acquirers on ways they can remain opportunistic as new competitors enter the landscape. If your organization could benefit from our thinking and support regarding investment banking or strategic advisory services, please contact us. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 PAGE 2 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM
Slide 4: EXECUTIVE SUMMARY Application functionality is demand-driven, not supply-driven. Workflows for IT, executive and knowledge workers are converging and the enterprise applications that were engineered for yesterday’s processes aren’t keeping up. Ten years ago legacy ERP, HCM, CRM and other enterprise functionalities were designed and built around silos and departments – and for the most part these solutions haven’t changed. Workflows today are broadly defined relative to their domain or industry vertical. For CRM, they refer to a set of related end-toend business processes that produce a specific product or service that enhances customer value. Because more of today’s workflows and processes are both crossdepartmental and may extend outside of an organization, the ways in which coworkers can collaborate to support these processes can be erratic – leading to unstructured, (or worse) undocumented activities. CRM software suites have automated many of the business processes which tie together sales, marketing and customer service functions and their accompanying workflows and activities. While much was accomplished by legacy CRM vendors, new and meaningful evidence of a convergence between key micro-disciplines within sales, marketing and service is emerging. This is buoyed in large part by the need for users to share information and the explosive growth of the SaaS (or “on-demand”) delivery model. SaaS is proving to be an effective mechanism for building and aligning the tools necessary to facilitate inter-departmental collaboration and to alleviate some of the pain associated with change management and re-implementation of legacy software solutions. TripleTree’s perspective on the disruptive nature of SaaS is based on several emerging trends: • Ecosystems have formed around a handful of technology and business services firms. These are most often technical at their foundation, but the need for eight (see page 9) “core” financial and operational components are becoming evident. • Collaboration technologies are tying together disparate workers to share information and better serve customers. In addition, they’re redefining vertical solutions and business platforms upon which new applications can be developed, shared and marketed. • CIO’s are finally coming around to the reality that SaaS-based applications can benefit most departments within their organizations. Many Web 2.0 tools are moving too quickly for IT to support in a traditional manner, yet the CIO and the team have a role to play as customer data is shared and analyzed. • Vertical applications are increasingly relevant, especially in sectors like healthcare or domains like compliance. The information needs and converging workflows around data quality and content sharing are critical elements of compliance and user satisfaction and are becoming increasingly intertwined. • Marketing automation is emerging as the hub around which many customer – facing applications will orbit. In addition, traditional linkages that marketing has with sales and service are growing stronger and new linkages with finance and HR are forming. The capital markets have recognized the growth (both in terms of user adoption and revenue) and business benefits of SaaS, and are associating a premium valuation with vendors who can demonstrate the ability to clearly track and optimize customer acquisition and loyalty. For these businesses, the options for gaining scale are numerous, however fast growth alone doesn’t denote value creation. Positioning, messaging, pricing, a keen focus on adoption and relevant partnering all have a role in the strategic thinking of CRM vendors offering a SaaS delivery model. This, coupled with the rapid pace of innovation around SaaS, should spur emerging vendors to identify and become quickly visible within an ecosystem and to simultaneously leverage a collaboration tool set to remain disruptive and become part of a platform solution. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 3
Slide 5: WHY CONVERGENCE IS HAPPENING Convergence within CRM is becoming top-of-mind because the differences between sales, marketing and service are narrowing, the related business processes are becoming more integrated, and the value of customer retention is hyperappreciated. The history of on-demand CRM grew from point-based solutions addressing specific customer needs into burgeoning functionality and broader product suites. At its worst, licensed CRM software deployments littered the IT landscape with abysmal shelf-ware stories and an underserved small and mid-sized business (SMB) market. However, as on-demand CRM took flight in 2001, good-enough functionality and affordable pricing drove high user adoption and were early signs of a broad trend in how application functionality could evolve and perpetually innovate. SaaS pioneers like Salesforce.com and Salesnet anchored broad on-demand sales functionality and RightNow emerged as a leader in services. However, marketing has been left behind. Vendors like Unica and Aprimo represent on-premise software solutions that do not necessarily offer best-in-class functionality across the wide range of needs confronting most marketing roles. It’s because of the continued growth of sales and service, and the promise of marketing that CRM remains a “top five” growth category among the two dozen SaaS domains and verticals tracked by TripleTree (for a complete list of these domains and verticals, see TripleTree’s SaaS Update Spotlight Report, September 2006). Currently over 300 firms offer CRM solutions delivered via SaaS, but as collaboration tools mature and vertical specialization takes hold, TripleTree believes this number could double by late 2009. One reason for this growth is that the influence of collaboration tools on business relationship management solutions is influencing how vendor ecosystems are forming. Encouraged by hot capital markets and the lack of competitive fervor from legacy software firms, ISVs are attempting to broaden their functionality by joining ecosystems in the hopes of building market awareness and client uptake. Also spurred by the enthusiasm of ISVs to “join their family,” ecosystem leaders are scurrying to amass core business functions. Borrowing from the old adage “membership has its privileges” is a reasonable portrayal of how member ISVs will view these coordinated functions as ecosystems mature into more stable sales and delivery platforms. As shown in Figure 1 on page 5, licensed or packaged CRM is no longer a “high growth” component of the enterprise applications sector as we project it to grow at 3.1% CAGR through 2011. In contrast, TripleTree is projecting strong growth for SaaS-based CRM solutions and professional services at 54.7% CAGR through 2011. A number of factors influence these estimates: an expected strong rate of venture capital investment continuing in CRM; growth and proliferation of open source CRM; growth of enterprise-class SaaS CRM deployments; broad and deep penetration of the SMB market; and an evolution of collaboration-inspired CRM solutions. Thus, by 2011 we estimate that spending on SaaS applications and About TripleTree’s Sector-Q Diagram on Page 5: In 2005, TripleTree established a graphical representation for mapping markets and sectors as its Sector-Q diagram (trademark of TripleTree) and schema. Originally designed to support client advisory assignments, the SectorQ diagrams now encompasses 15 versions covering a range of domains and verticals and have become integral to our research agenda. MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 PAGE 4 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 6: professional services will comprise over 50% of the overall CRM market (or approximately $8.4B). Figure 1: CRM Sector Revenue Forecast: SaaS vs. Packaged/Licensed (in $ millions) $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2006-2007 2008 2009 2010 SaaS Delivered Growth Estimated CAGR = 54.7% 51% 50% 40% 30% 39% 28% 20% 20% 12% Packaged Software Growth Estimated CAGR = 3.1% 10% 0% 2011 SaaS-delivered CRM (includes subscription revenues for sales, marketing and service disciplines and SaaS-specialized professional services). Packaged CRM Software (also includes maintenance and professional services revenues related to packaged software implementations). n n SaaS-delivered CRM revenue growth as a percentage of the overall CRM sector. Source: TripleTree, LLC & Industry Sources Driving the growth in Figure 1, TripleTree’s proprietary database contains qualitative and quantitative rankings of over 300 firms offering CRM solutions via SaaS (TripleTree’s overall SaaS database now exceeds 1,100 firms). Using our proprietary Sector-Q market map, TripleTree has identified approximately 80 micro-disciplines within sales, marketing and service (See Figure 2) that are impacted by SaaS vendors and professional services firms focused on SaaS. The Sector-Q is a framework used by TripleTree when advising business builders on how value can be quantified and strategic alternatives assessed. Figure 2: TripleTree’s Sector-Q for Customer Relationship Management CSR Unified Account Management Desktop Sales Analytics & Reporting e-Commerce & Order Management Incentive Compensation Team Performance Dashboards Human Capital & Performance Management Sales Coaching & Training Sales Operations Negotiations & Contract Management Configuration Management Proposal & Quote Management Mobile Sales Presentation Generators Applications Forecasting Voice Live Product & Service & Web SelfCustomer Chat & Service Delivery Support SelfInteraction Presence Service Training Standards Community Platforms Mgmt VOIP Remote Contact Center Agents Outsourced Contact Center Customer Service Portals / Microsites Customer Asst’d. Product Dev. Order Processing Contact Center Service Sales Inbound Communication Life-Cycle Management Technical Support Case Management Performance Management Internal Communication Mobility Solutions / Dispatch Field Service Management Case Resolution / Reporting Customer Service Analytics Enterprise Feedback Management Account Preparation Channel Management RFP Response and Pursuit Opportunity Management Territory Management Lead Conversion Analytics Multi-Channel Sales Development Prospecting/Contact Management Promotional Management Lead Qualifications & Scoring Lead Development Outsourcing Web to Lead Trade Promotion Event Management Lead Management Planning and Strategy Web Marketing Email Marketing Campaign Planning & Optimization Ad Placement & SEO Loyalty Marketing Affiliate Management 1:1 Marketing External Communication Data Marketing Decision Quality Compliance Support Analytics Detection Customer Experience Management Customer Data Hub Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Product Management Product Engineering and Launch Competitive Market Analytics Unstructured Data Analytics Privacy Management Marketing Planning and Calendars Customer Information File Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management Data Assessment Advertising Planning and Strategy Media Intelligence and Monitoring Product Content Management Marketing Spend Management Product Messaging & Positioning Marketing Source: TripleTree, LLC MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 5
Slide 7: ECOSYSTEMS – A CORNERSTONE FOR SaaS PLATFORMS Businesses and end-users have complex technology and information needs that no single CRM vendor can possibly satisfy. For nearly two decades, sales, marketing and service systems have been built in silos to address these needs, yet they have unknowingly created limitations for sharing product, customer, and sales data. These limitations stemmed from technologies that built a proprietary wall around customer and market data and didn’t establish a means for information sharing or fluid collaboration. And, because these cross-departmental views were clouded and disjointed, executives have been limited in their ability to tap valuable data resources across departments. The result is that there are now thousands of business leaders in charge of ecosystems and most don’t realize it. With workflows between departments flattening organizations, the task of re-engineering legacy applications to address these information sharing and collaboration needs would be a significant, multi-year undertaking and be extremely cost prohibitive. As application vendors realize that customers want more than just applications to tackle these needs, ecosystems are forming to facilitate the integration of best-in-class solutions. Ecosystems while not new, are being redefined as best-in-class SaaS and collaboration tools permeate business units and IT departments. The productivity leverage from linking these point solutions are beginning to illustrate that “workflow integrations” are as much (if not more) important than “systems integrations.” To ensure rapid deployment and strong user adoption, integration of discrete SaaS solutions still require the guidance of a professional services firm – both at a systems and workflow level. However, as Web 2.0 technologies mature, the move toward platforms will likely see SaaS vendors embedding more plug-and- play integration capabilities and added considerations for automating workflows. The goal for these vendors will be to drive down customer costs associated with implementing platforms (which may be one-time fees) while building up a recurring revenue stream. Illustrated throughout this report are a few considerations on how SaaS ecosystems are beginning to link departments across an extended enterprise and where SaaS platforms may likely evolve. Performance Management: Human Resources and Finance are two departments becoming more actively linked to sales, marketing and service disciplines, making performance management a potential growth area in CRM. As these departments grapple with manual processes and spreadsheet-driven information flows, SaaS vendors – with performance management solutions – will see strong market interest from customers focused on getting the most out of their employees. “SaaS ecosystems are quickly enabling SaaS vendors and users to integrate multiple on-demand applications. These ecosystems typically permit integration and interoperability at a software code level via mutual APIs and web services; at a user interface level via common design elements; and at a sales and marketing level with joint procurement and provisioning capabilities.” – Jeff Kaplan, Senior Advisor to TripleTree/ Managing Director, THINKstrategies SALES PERFORMANCE Diamond Performance Group www.diamondpg.com WHY THEY’RE INNOVATIVE: Diamond Performance Group has evolved its highly unique approach to performance benchmarking around key metrics and behavior traits which can feed directly into incentive compensation programs and HR hiring profiles. This data allows sales managers to become better coaches for their reps and promote a culture of continuous improvement between sales, finance and HR. KEY METRIC: Focus on attributes of top performers to drive financial results. PAGE 6 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 8: • Employee Optimization: Most sales executives will agree that integrating a technology-based selling solution with a proven sales methodology can be beneficial. The benefits range from equipping reps to handle thorny account management issues and optimizing how peak performers are managed to where incentive compensation can be best positioned. As shown in Figure 3, this data can be captured and fed to an HR department as useful information when hiring or facilitating performance evaluations, and to the finance department as quantitative business and product results are measured. Figure 3: Microdiscipline Cluster – Performance Management Solutions Voice SelfLive & Web CSR Unified Account Management Desktop Sales Analytics & Reporting e-Commerce & Order Management Incentive Compensation Team Performance Dashboards Human Capital & Performance Management Sales Coaching & Training Sales Operations Negotiations & Contract Management Configuration Management Proposal & Quote Management Mobile Sales Sales Presentation Generators Applications Forecasting INCENTIVE COMPENSATION Centive www.centive.com WHY THEY’RE INNOVATIVE: Product & Service Customer Chat & Service Delivery Support SelfInteraction Presence Service Training Standards Community Platforms Mgmt VOIP Remote Contact Center Agents Outsourced Contact Center Customer Service Portals / Microsites Customer Asst’d. Product Dev. Order Processing Contact Center Service Targeting mid-market clients has allowed Centive to enjoy strong growth and build creativity into their solutions. While Technical Support addressing SarBox needs around reporting, Life-Cycle Management Case Management Inbound Communication Performance Management Source: TripleTree, LLC Inbound Communication Performance Management Centive has Mobility Solutions / Dispatch that gaining input Internal Communication realized Management Field Service from sales professionals can be invaluable Case Resolution / Reporting Customer Service Analytics Service Account Preparation Channel Management RFP Response and Pursuit Opportunity Management Territory Management Lead Conversion Analytics Multi-Channel Sales Development Prospecting/Contact Management Promotional Management Lead Qualifications & Scoring Lead Development Outsourcing Web to Lead Trade Promotion Event Management Internal Communication Account Preparation as solutions are Feedback Management Enterprise tailored and incentive Customer Experience Management programs are designed. Customer Data Hub Marketing Analytics KEY METRIC: & Econometrics Product Management Web Site Analytics Partner Feedback Management Data Assessment Lead Management Data Assessment Lead Management Planning and Strategy External Communication Planning and Strategy • Incentive Compensation Management: ICM is a discipline being Web Marketing External Communication improved by the proliferation of discrete SaaS tools.Advertising an obvious It’s Planning and Strategy Email Marketing Media Intelligence and Monitoring Campaign Planning & Optimization Product Content Management Ad area & of Placement SEO convergence as Finance and Marketing Spend Management HR departments begin to Loyalty Marketing Data Marketing Product Messaging & Positioning Decision Affiliate Management 1:1 Marketing Quality Compliance Support individual performance, and the CFO becomes collaborate on Marketing and Detection team Analytics increasingly focused on sales team ROI. Currently two SaaS vendors – Centive and Xactly – are addressing this domain area with unique client approaches. Workflow Improvement: Complex processes can define a workflow when linked by a dynamic set of related tasks. Sales pursuits, product development and compliance management are examples of resource-intensive activities that drive important results. For sales pursuits, customer information, product data, competitive intelligence, configuration resources and pricing data all converge into a proposal or quote. When developing a product, notes from contact center employees, customer forums, enterprise feedback management and cost data converge to craft a product roadmap. As compliance is monitored, documents, financial data and business rules converge to evaluate risk and identify issues. Because many SaaS solutions have simplistic workflow engines, complex environments like these can be addressed by point solutions and integrated within an ecosystem. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Product Engineering and Launch Competitive Market Analytics Unstructured Data Analytics Privacy Management Marketing Planning and Calendars Customer Information File Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management Marketing Maintain solution creativity and listen to your sales professionals. INCENTIVE COMPENSATION Xactly www.xactly.com WHY THEY’RE INNOVATIVE: Xactly is building a suite of services on top of its base sales compensation and performance management solution for mid to large-sized organizations. Some of these include approaches to help align the sales department with the CIO, with better territory management, and compliance reporting. KEY METRIC: Link sales and finance on a broader suite of functionality. Q3 2007 CRM CONVERGENCE PAGE 7
Slide 9: Addressing Vertical Markets: Vertical markets are becoming a key point of competitive focus and differentiation for many SaaS vendors. Annually, TripleTree spends hundreds of hours in briefings with global firms regarding their SaaS strategies and other disruptive forces in the market. Invariably these discussions center on key industry verticals as evidenced by Salesforce.com’s recent introduction of its Wealth Management Edition. The marketplace is now seeing a major SaaS vendor put a marketing focus behind a CRM vertical solution. For this edition, Salesforce.com will likely tweak little of its core technology, but instead leverage its AppExchange platform and partner support to deploy at Merrill Lynch (its first announced Wealth Management Edition client). The Impact of Consumerism: A number of household name consumer web-based firms (WebMD, eBay, Amazon) have awakened to the reality that their consumer-based pricing models (advertising, content, transaction) and user design constructs could be successful if focused on a business solution. Not only are these consumer models sustainable, but in verticals like Healthcare – where employers are taking control of costs – they could be extremely effective, e.g. Yahoo! Health and Google Health. Consumer business models are about trust, and considering the credibility that Paypal and Verisign bring to a Web property, SaaS platforms will follow suit. A good example of this is AmericanExpress, whose recent investment in Rearden Commerce proves that they “get it” and could potentially become a disruptive competitor with customer-facing business applications like CRM. Another solution provider taking what they learned from selling to customers and applying it to businesses is Connextions. Maturing Ecosystems: To take advantage of these opportunities, many other consumer brands will likely evolve their platforms to enable Web-based business functionality and attract partners. Consider Amazon.com with its Amazon Web Services platform. Via its aStore and Omakase functions, Amazon is building eCommerce capacity for SMBs that want a simplified and proven way to link products, make recommendations and track sales. As TripleTree maps how SaaS ecosystems are influencing markets, we are aware that many emerging SaaS vendors are not sufficiently capable of delivering a comprehensive solution without professional integration and support services. For these firms, a hybrid business model balancing custom pricing, projectoriented deployments, and a common definition of client relationships is the norm. As shown in Figure 4 on page 9, there are eight foundational components TripleTree views as critical for an ecosystem to mature into a platform. These components will offer ecosystem members a comprehensive ability to connect suppliers, clients and communities – elements which can improve workflow as an “extended organizational team” and foster collaboration. Not all of the market leaders listed in Figure 4 offer a CRM solution. However, key SaaS platform elements are maturing for these firms which could make them viable business relationship management providers. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 OUTSOURCED CUSTOMER SERVICE Connextions www.connextions.com WHY THEY’RE INNOVATIVE: Connextions has revolutionized how customer data is harvested and applied at every stage of the transaction lifecycle; using every touchpoint as an opportunity to drive revenue and brand loyalty. Connextions has applied its proprietary expertise within the healthcare sector, enabling plans and providers to make the transition from commercial (B2B) to retail (B2C) distribution, addressing the rapid growth of consumer-driven decision making and sales. KEY METRIC: Make customer data manageable and actionable to increase sales and customer retention. PAGE 8 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM
Slide 10: Figure 4: Potential Business Relationship Management Platforms Eight Core SaaS Components Compliance Workflow Security Administration Document Management Community Billing Integration & Partnering Enterprise Application Vendors • Adobe • Cisco • IBM • Intuit • Microsoft • NetSuite • Oracle • Salesforce.com • SAP Consumer Oriented Tools/Portals • Amazon • AmEx • Apple • eBay • Google • WebMD • Yahoo! Vertical / Business Services Providers • ADP •AON • •BankofAmerica • •Fiserv • •JP Morgan Chase • •Wachovia • •UnitedHealth Group Platform-Ready Market Leaders (SaaS Capable) Source: TripleTree, LLC MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 9
Slide 11: COLLABORATION TOOLS ARE STREAMLINING WORKFLOWS LOYALTY MARKETING Vertical Response www.verticalresponse.com WHY THEY’RE INNOVATIVE: Vertical Response has evolved as a resource for its clients beyond plain vanilla email marketing services. Using simple Web 2.0 tools, their executive team has built a fan-like following of users who are regularly blogged with valuable insights on marketing best practices and links to useful sales enhancement tools. Encouraging a two-way dialogue balances this collaboration and creates a simple but powerful community where innovation, value and loyalty are exchanged. KEY METRIC: Evolve to avoid becoming commodotized. The growth of collaboration and Web 2.0 is making an impact on the CRM sector. As knowledge workers seek others who share their energy and vision for a given topic, collaboration tools are blurring the lines between how organizations, departments, functions and roles are interacting. As these interactions occur, harnessing ideas and best practices on a platform will be a logical link for CRM workflows and collaboration technologies. The Web 2.0 technologies that support collaboration (social networking, blogs, wikis, tagging and RSS) are mostly offered by point solution providers. But similar to the evolution of the micro-disciplines evolving in CRM, the move toward a platform of linked functions is happening quickly. Cisco’s recent acquisitions of FiveAcross (social networking) and more notably WebEx signify that a market premium can be placed on content and collaboration tools, but also that large global players are beginning to enter the playing field. Not surprisingly, Adobe, IBM, Google, Microsoft, Oracle, and Salesforce.com are also among the major software vendors building collaborative tools. TripleTree believes that collaboration tools will mature into a key platform component as the metadata resulting from client and partner interactions is captured, analyzed and put to use. Depicted in Figure 5 and Table 1 on page 11, TripleTree has identified approximately 50 micro-disciplines linking communications and business applications in the collaboration sector. Figure 5: TripleTree’s Sector-Q for Collaboration Web Meeting Application Systems Desktop Sharing E-Commerce eMarket RSS Feeds Mash-ups Service 2.0 Folksonomies Support Place Services Complimentary Business Groupware Social Software Data Sharing Conferencing Video Conferencing VOIP Telephony Online Chat Internet Forums Web Publishing Unified Messaging Instant Messaging Email Voicemail Faxing Presence Virus Protection Backup Management Patch Management Contact Center Remote Support Web 2.0 Social Podcasts Wikis Blogs Online Office Suites Web Analytics / Reporting Dashboards Conferencing Communication Business Applications Portals Group Calendaring Document Management Contact Lists Virtual Team Mobility Space eForm Management Management Application Desktop Streaming Streaming Source: TripleTree, LLC PAGE 10 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 12: Table 1: Where Collaboration Links the Extended Enterprise Departments Linked to Sales, Marketing and Service CRM Disciplines Sales Incentive Compensation Management Sales Knowledge and Team Performance Management Mobile Technologies and Portals • Visibility into quota attainment, performance metrics and commission payments. • Sales rep ROI • Evolve to performance based incentive and advancement. • Development of an deal sales rep profile. • Complex solution selling and activity reporting. • Foster collaboration • Up-sell and cross-sell forecasting and reporting. • Access to corporate knowledge databases, competitive content and best practices. • Mobile worker connectivity primarily impacts contact information, email and chat; but service alerts and order status are emerging applications. Finance Human Resources IT • Remotely monitor marketing programs. Marketing Customer Experience Management Marketing Spend Management and Campaign ROI • Links financial performance to customer satisfaction strategies. • Allows managers to make trade-off decisions related to how campaigns perform relative to planning and budgeting. • Addressing organization alignment of how a customer experience mindset would be adopted across and organization. • Ensure users understand and work with customer facing systems. • Design these systems with common UI and interconnectivity across channels. • Optimized IT Spend Management • Clean prospect and customer data is a key driver to overall CRM success. • Tied closely to Service technologies via contact center data collection and validation. Benchmarked Marketing • Analyze and predict churn, Performance, likelihood of next purchase, Predictive Analytics, effective targeting. Data Quality Service • Define and lead standards around Extended Enterprise communications. • Optimized ROI for service initiatives. • Performance metrics help manager and agent with reporting and workflow improvements • Unified quality monitoring, workforce management, e-learning and performance management. Collaborative Service • Knowledge management aids client/agent/employee/ partner interaction. • Can lead to integrated document sharing and proactive service. • Lower cost, accelerated time to market, simplified IT demands. Outsourced Contact Center Workforce Optimization Enterprise Feedback Management • Survey driven feedback designed for a centralized view of feedback across sales, marketing and service. Source: TripleTree, LLC More Evidence from Salesforce.com: Not surprisingly, Salesforce.com is educating the market on the disruptive influence collaboration tools can have within sales, marketing and service disciplines. The Company’s Spring ’07 edition includes a platform called AppSpace which is designed to allow users to share content and best practices on a collaborative portal. In addition, Salesforce.com recently acquired Koral, a document management firm that began as an AppExchange partner. The Koral functionality will likely be aimed at prospects and current Salesforce.com customers who will never invest in EMC’s Documentum and who find Microsoft’s Sharepoint too complicated. Both of these initiatives were in some ways trumped by the announcement that the Company’s Apex platform can now be subscribed to separately from its SFA service to build custom applications. This represents a major step forward in the ecosystem capacity and platform aspirations of Salesforce.com. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 11
Slide 13: BENCHMARKING SiriusDecisions www.siriusdecisions.com WHY THEY’RE INNOVATIVE: SiriusDecisions is focused on getting sales and marketing departments marching in lock step regarding best practices collaboration. Proponents of “marketing SLAs,” SiriusDecisions is helping executives leverage performance objectives, to gain greater visibility into the various roles that touch customers, macro forces that influence like buying cycles, and in-the-trenches work like lead prospecting, scoring, marketing program ROI. KEY METRIC: Measure marketing’s effectiveness for sales teams; modify; repeat. PORTAL MANAGEMENT iCentera www.icentera.com WHY THEY’RE INNOVATIVE: iCentera has approached a marketplace need for improved communication and information sharing between partners through on-demand portals. The iCentera tool kit is simplistic and flexible; users can be online and productive in minutes and the document storage and refresh engine is powerful. This technology Sales AnalyticsAccount Management is useful Reporting & Team Performance Dashboards Human Capital & Performance Management Sales Coaching & Training Sales Operations Negotiations & Contract Management Configuration Management Proposal & Quote Management Mobile Sales Presentation Generators Applications Forecasting Channel Management RFP Response and Pursuit Opportunity Management Territory Management Lead Conversion Analytics Multi-Channel Sales Development Prospecting/Contact Management Promotional Management Lead Qualifications & Scoring Lead Development Outsourcing Web to Lead Trade Promotion Event Management CSR Unified Desktop Improving Customer Experience is Important: Because every role in an enterprise cares about the customer experience, it’s likely that collaboration tools will take a leading positioning in influencing how customer retention programs are designed and implemented. Tempering this is the fact that many business workflows prohibit marketers from actually making an impact. Easier access to information for customers (the individuals who need the better experience) can be built by linking the feedback from customer forums, surveys, executive blogs and other communication mechanisms. This is technology that exists today from many SaaS firms and will proliferate as marketing becomes a mindset, not just a department. Inter-Departmental Accountability is Growing: As workflows overlap, applying important performance objectives to the collaborative efforts of sales, marketing and service departments is benchmarked by firms like SiriusDecisions. Whenever marketing and sales departments can establish performance objectives around customer communication and business development programs, the going-in expectations can be rationalized against variables and actual results, building trust and encouraging continuous improvement – all of which can be measured via SaaS tools. One such area of customer communication is campaigns, which can be impacted by tools like those from iCentera, whose SaaS solution meshes traditional service functions like web, phone and mobile with the Web 2.0 experience of targeted portal management. This allows customer communications to be captured, analyzed, and acted upon in a format that is digestible for field sales and service personnel. Customer Service as a Key Competitive Differentiator: As shown in Figure 6, the micro disciples of service such as unified agent Figure 6: Microdiscipline Cluster – Customer Communications Solutions Voice Live Product & Service & Web SelfCustomer Chat & Service Delivery Support SelfInteraction Presence Service Training Standards Community Platforms Mgmt VOIP Remote Contact Center Agents Outsourced Contact Center Customer Service Portals / Microsites Customer Asst’d. Product Dev. Order Processing Contact Center Service Sales for large enterprises that need a more Incentive Compensation nimble solution to their corporate intranet; e-Commerce & Order Management Inbound Communication Life-Cycle Management Technical Support Case Management and SMBs looking for an affordable and Management TripleTree, LLC Source: Performance powerful way to communicate more effectively with customers. Account Preparation KEY METRIC: Internal Communication Sales Mobility Solutions / Dispatch Field Service Management Inbound Communication Case Resolution / Reporting Customer Management Performance Service Analytics Service Enterprise Feedback Management Internal Communication Web Marketing Email Marketing Campaign Planning & Optimization Ad Placement & SEO Loyalty Marketing Affiliate Management 1:1 Marketing Customer Data Hub Data Assessment Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Lead Management Product Management Planning and Strategy Product Engineering and Launch Competitive Market Analytics Marketing External Communication Unstructured Data Analytics Privacy Management Marketing Planning and Calendars Customer Information File Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 PAGE 12 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM Data Assessment Customer Account Preparation Experience Management Lead Management Get portal users productive quickly, with minimal or no reliance on IT. Planning and Strategy External Communication Data Marketing Decision Quality Compliance Support Analytics Detection Advertising Planning and Strategy Media Intelligence and Monitoring Product Content Management Marketing Spend Management Product Messaging & Positioning Marketing
Slide 14: desktops, mobile CRM, customer self-service, hosted contact centers and supporting analytical applications are increasingly being delivered via SaaS and bridging to workflows of other organizational roles. Web 2.0 and collaboration can help organizations better address the balance of web, phone, self-service and wireless technologies with human interactions while providing the most cost effective customer service experience. Mobile technologies have evolved to be more process-centric. Thus, they are tailor-made for capturing and routing customer-related communications in a digestible and useful format to field sales and service professionals. While still a niche area, mobile technology has re-established itself in certain industry verticals. In the transportation industry, employee productivity, collaboration, cost reduction, regulatory compliance and asset management are driving this resurgence. In healthcare, improved data collection, patient intervention and coaching are a few of the drivers creating the phenomenon of “telemedicine” (for more details see TripleTree’s recently published Spotlight Report Telemedicine 2.0: Connecting Medical Devices, Patients and Providers to Improve Health). Interest in mobile sales solutions has also been renewed because of a focus on business process improvements. Response times, reporting, alerts and data capture have been enhanced by high-speed data networks and are now bringing real value to sales and service personnel in terms of productivity, service quality and data usefulness. On-demand functionality has matured to some extent and for this study is represented by two distinct and measurable advantages as a SaaS application: an integrated view of the customer (offering a lower cost operation and higher customer satisfaction) and enhanced job satisfaction for contact center agents. Thanks to solutions from SaaS vendors like Contactual, SaaS-based contact center applications allow managers to remotely monitor agent productivity, support flex-time schedules, and create convenience for a work-at-home employee. A few benefits for this are listed below: • HR can use this flexibility as a lure when recruiting, hiring, training and promoting contact center agents; • Finance can view “mashed up” performance-based dashboards for workers as evaluations are performed, budgets are allocated and hiring and training is funded; and • Service center agents can leverage collaboration tools to more effectively work with clients on issue resolution and be more proactive in working with sales colleagues on up-sell and cross-sell opportunities. Figure 7: Contributing to the Business Relationship Management Evolution: The Projected Revenue Growth of SaaS-Based Collaboration Tools $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2007 2008 2009 2010 Source: TripleTree, LLC CONTACT CENTER AUTOMATION Contactual www.contactual.com WHY THEY’RE INNOVATIVE: Contactual is focused on offering a simple and scalable contact center solution that addresses inbound client communications and contributes to revenue acceleration. In addition, Contactual has a platform that can address evolving needs around helping facilitate sales orders, responding to marketing campaigns, and offering customer education during an interaction. With lessons learned from its former life as White Pajama, Contactual understands that cost, flexibility and reliability are keys to its SaaS solution. KEY METRIC: Focus on key alliances to better serve users. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 13
Slide 15: IT – SHIFTING MARKETING FROM ART TO SCIENCE A number of independent surveys support what is becoming increasingly apparent in the marketplace: IT’s work direction (and even strategy) is being influenced more by an organization’s business units. Marketing departments have historically been the voice of companies, but have admittedly understood little about leveraging data and analytics – keys to influencing strategic thinking. Many of the CIOs who are believers in the transformative qualities of SaaS (cost savings, ease of implementation, minimal technical support) are becoming advocates for mainstreaming technologies that link critical customer data along the valuechain. TripleTree sees the role of IT as it relates to the growth of SaaS spanning two areas – as a facilitator and as a collaborator with each role being fluid based on how integrated the CIO is with the sales, marketing and service organizations, and the presence of SaaS in the CRM microdiscipline of the organization. While it’s true that many marketing technologies (predictive analytics, search engine optimization, social networking, folksonomies) are moving too fast for IT to keep up with or support, a few initiatives are listed below which summarize how IT is helping business units understand and deploy SaaS- based solutions. Customer Experience Management: As previously introduced, an organization’s focus on customer experience management is a cultural shift and should be considered a journey rather than a destination. This mindset is necessary because traditional ways of servicing the customer (which have been in place for years and sometimes decades) have well known limitations. Once an organization realizes that radical change is necessary for improvement, years of business processes and embedded systems need to be re-evaluated and updated, making this “journey” a multi-year endeavor. Having clear objectives which define a quality customer experience and are founded on a corporate strategy can help this cultural shift proliferate and come to life in more durable programs supported by the CIO. Sharing Client Information: Because gathering client information is challenging (user reluctance to share information in general, privacy concerns, etc.) Web-based tools must gather as much customer information as possible whenever an interaction takes place. Understanding the links between the likely behaviors of a prospect or customer when they are tied to core IT systems (user login, past search inputs and past purchases, etc.) represent critical data for sales, marketing, and finance to dissect and share. Simplifying and Sharing Analytical Information: For marketers, the IT department has become a key resource for defining, capturing and assessing customer data. In order to develop and use a meaningful customer database, overcoming past marketing practices that relied on separate data silos is crucial. Figure 9 on page 15 illustrates that on-demand sales, marketing and collaboration applications can now manage common data files and CIOs are taking a role in normalizing these files into custom views. Figure 8: Where IT Supports SaaS Across the CRM Sector-Q Disciplines Inbound Communication Data Assessment Internal Communication Planning & Strategy Collaborator CIO Facilitator Account Management External Communication Lead Management Performance Management Source: TripleTree, LLC PAGE 14 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 16: Sales Analytics & Reporting e-Commerce & Order Management Incentive Compensation Team Performance Dashboards Human Capital & Performance Management Sales Coaching & Training Sales Operations Negotiations & Contract Management Configuration Management Proposal & Quote Management Mobile Sales Presentation Generators Applications Forecasting Sales Inbound Communication Customer Service Portals / Microsites Customer Asst’d. Product Dev. Order Processing Contact Center Life-Cycle Management Technical Support Case Management Performance Management Internal Communication Mobility Solutions / Dispatch Field Service Management Case Resolution / Reporting Customer Service Analytics Enterprise Feedback Management Account Preparation Channel Management RFP Response and Pursuit Opportunity Management Territory Management Lead Conversion Analytics Multi-Channel Sales Development Prospecting/Contact Management Promotional Management Lead Qualifications & Scoring Lead Development Outsourcing Lead Management Web to Lead Trade Promotion Event Management Figure 9: Microdiscipline Cluster – Customer Data Quality External Communication Data Marketing Decision Quality Compliance Support Analytics Detection Planning and Strategy Customer Experience Management Customer Data Hub Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Product Management Product Engineering and Launch Competitive Market Analytics Unstructured Data Analytics Privacy Management Marketing Planning and Calendars Customer Information File Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management Data Assessment Web Marketing Email Marketing Campaign Planning & Optimization Ad Placement & SEO Loyalty Marketing Affiliate Management 1:1 Marketing Advertising Planning and Strategy Media Intelligence and Monitoring Product Content Management Marketing Spend Management Product Messaging & Positioning SIMULATION-DRIVEN SALES FORECASTS Aha! www.ahasoftware.com Marketing Service Source: TripleTree, LLC Inbound Communication WHY THEY’RE INNOVATIVE: Aha! is tackling the age-old goal of CRM systems; helping sales management gain better pipeline visibility. By leveraging simulations and analytical rigor, Aha! is gaining traction within the SugarCRM ecosystem as an on-demand solution that can help executives understand the risks and upside of a sales pipeline and forecast. Sales Performance Management Account Preparation Data Assessment Lead Management Planning and Strategy Internal Communication External Communication External Communication Marketing CSR Unified nt Desktop gement Customer and Product Analytics: With the reality that the Web has become a bona-fide business development tool, econometric models examining marketing variables over time (such as the length of a service contract or the likelihood of an up-sell) or between different variables at a point in time (such as customer click-throughs on one ad versus Voice Live Service & Web SelfCustomer Chat & another) Product & Service – are gaining ground. This is a good example of where BI vendors are Service Delivery Support SelfInteraction Presence Service Training Standards Community Platforms Mgmt VOIP beginning to offerRemote Contact Center Agents SaaS-based Center analytical dashboards that can be equally useful Outsourced Contact Customer Service Portals / Microsites to sales and marketing. Figure 10 shows micro-disciplines where the successful Customer Asst’d. Product Dev. Inbound Communication vendors in this arena will find Order Processing the balance between analyzing a mountain of data Contact Center Life-Cycle Management and finding out which metrics are most relevant. Technical Support Case Management KEY METRIC: Data-driven forecast modeling will improve decision making. Internal Communication Mobility Solutions / Dispatch Field Service Management Case Resolution / Reporting Figure 10: Microdiscipline Cluster – Analytics Inbound Data Analytics Customer Service Enterprise Feedback Management Customer Experience Management Customer Data Hub Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Product Management Product Engineering and Launch Competitive Market Analytics Unstructured Data Analytics Privacy Management Sales Marketing Planning and Calendars Customer Information File Performance Management Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management Data Assessment Source: TripleTree, LLC Service Inbound Communication ng and Strategy Internal Communication Advertising Planning and Strategy Media Intelligence and Monitoring uct Content Management nd Management oning Account Preparation Data Asssssment Lead Management Planning and Strategy Marketing External Communication Marketing An impressive leader in Analytics has been Business Objects and its Crystal Decisions on-demand solution. Business Objects is visible as a partner not only within the AppExchange ecosystem, but as a WebEx Connect partner as well. TripleTree expects Cognos and other traditional BI competitors to become similarly visible with BI tools that extend onto mobile devices, empower better reporting and influence database quality. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 15
Slide 17: MARKETING AUTOMATION — CAULK FOR CUSTOMER FACING APPLICATIONS Even though it has the fewest seats to deploy as measured in terms of a “typical” CRM project rollout, TripleTree predicts that SaaS-based marketing automation platforms will emerge as the logical hub for sales and service functionality and expects them to continue on an accelerated growth curve. Historically, enterprise application vendors have passed over the marketing automation component of CRM as an insignificant revenue opportunity. However, the broad reach of the marketing function has thrust it to the forefront as highly strategic. This reach is growing because of two factors: first, marketers are evolving their traditional role of planners to becoming more of a catalyst in facilitating action across the extended enterprise; and secondly, linking IT resources, data vendors, agencies, printers and other partners calls for enterprise-wide influence. An example of how on-demand technology supports these roles is marketing automation. Linking finance and IT is complex and needs a coordinator because of the unique data requirements and accountability touching Web marketing, campaign planning, marketing spend management, marketing compliance, analytics and collaboration. In addition, marketing performance management is of growing importance as companies prioritize on the financial impacts of spend management, compliance, workflow management and marketing asset management. In marketing, stand alone SaaS solutions won’t be enough to satisfy market demand. Hybrid solutions where a SaaS tool is embedded into a professional services contract are appearing in areas like marketing data services, compliance and spend management. As noted above, marketing’s reach inside and outside of an organization is broad and provides it with newfound leverage that is strategically relevant to the CEO and CFO in key disciplines of marketing, as depicted in Figure 11 on page 17. Spend Management (Finance): The role of marketing is expanding beyond creative services and product management by embracing the myriad of analytics that measure program effectiveness. Enterprise marketing expenditures are massive with some industry estimates pegging spending at one trillion dollars annually. The desire to account for this spending coupled with new marketing channels and data sources (like Google Ad Words) is driving a stampede toward better marketing spend management. Given the disparate spending in organizations to manage promotions, channels, websites, call centers and other tools, a significant need for improved marketing spend management has evolved. An example of how marketing spend management is gaining awareness is represented by platformenabled mash-ups. Last year, Salesforce.com acquired AppExchange partner Kieden, a SaaS firm whose application mash-up helped users better measure their marketing expenditures on Google Ad Words. It followed with a recently announced agreement with Google that takes the Kieden acquisition to a new level with Salesforce.com Group Edition, a more formal product partnership. MARKETING AUTOMATION Vtrenz, Inc. www.vtrenz.com WHY THEY’RE INNOVATIVE: Vtrenz recognized that the Internet has provided consumers new levels of control at all stages of the purchase process, requiring a closer alignment of sales and marketing. And, while push and pull marketing strategies are fluid processes, competitive organizations are operating “lean,” so automating many marketing functions is critical. Planning, execution and measurement are challenging marketers in organizations of all sizes, and with the advent of work-flow automation and optimization tools as a critical link, SaaS-based solutions like Vtrenz are increasingly relevant. KEY METRIC: Leverage a holistic approach to marketing automation for maximum impact. PAGE 16 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 18: Compliance (Finance/IT): The dual drivers of spend management and analytics are further linked by the Voice Live Service Customer interest of C-level executives to establishChat & & Web accountability with marketing better Self- Product & Service Service Delivery Support SelfInteraction Presence Service Training Standards Community Platforms CSR Unified Mgmt VOIP beyond financial performance to include regulatory compliance. Remote Contact Center Agents TheOutsourced Contact Center requirements Account Management Desktop Sales Analytics & Reporting Customer Service Portals / Microsites for Sarbanes-Oxley and “Do Not Call List” regulations underpin the Customer Asst’d. Product Dev. interest e-Commerce & Order Management Incentive Compensation Inbound Communication Order Processing Team Performance Dashboards of nearly all organizations to view marketing automation platforms as critical Contact Center Human Capital & Performance Management Life-Cycle Management Sales Coaching & Training in their overall business development arsenal, and the extensibility of SaaS tools Technical Support Sales Operations Performance Management Case Management otiations & Contract Management solutions have carved out a growing role. TripleTree’s research has found thatSolutions / Dispatch Mobility Configuration Management Internal Communication & Quote Management Field Service Management CMOs are becoming the key bridge between finance and sales on these Case Resolution / Reporting tasks Mobile Sales Applications Account Preparation many traditional marketing functions to be automated, analyzed Analytics Customer Service casting and is driving Enterprise Feedback Management ment it and/or potentially outsourced. An on-demand firm leveraging its focus Customerdata Management on Experience Customer Data Hub Data Assessment Partner Feedback Management compliance for the pharmaceuticals industry is Health Market Science. Web Site Analytics ead Management Marketing Analytics & Econometrics Product Management Product Engineering and Launch Competitive Market Analytics Unstructured Data Analytics Privacy Management Marketing Planning and Calendars Customer Information File Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management Figure 11: Microdiscipline Cluster – Marketing Data Management External Communication on ent & SEO Loyalty Marketing Affiliate Management 1:1 Marketing Data Marketing Decision Quality Compliance Support Analytics Detection Advertising Planning and Strategy Media Intelligence and Monitoring Product Content Management Marketing Spend Management Product Messaging & Positioning Planning and Strategy Marketing Service Inbound Communication Source: TripleTree, LLC Sales Performance Management Internal Communication Account Preparation Data Assessment Lead Management Planning and Strategy External Communications MARKETING INFORMATION COMPLIANCE Health Market Science www.healthmarketscience.com WHY THEY’RE INNOVATIVE: Health Market Science (HMS) is an information services company taking a compliance-driven approach to healthcare data integration. HMS is focused on helping clients be more effective with their market data acquisition, storage, matching, integration, and dissemination. By embedding the HMS data search and compliance technology into the sales infrastructure of their clients, they’ve become a mission critical resource. KEY METRIC: Analytical rigor adds “trusted resource” tag to SaaS platforms. Q3 2007 CRM CONVERGENCE PAGE 17 Marketing Marketing Metadata (IT): A meaningful revenue opportunity exists for SaaS firms capable of adding value to the huge volumes of metadata being generated by today’s legacy IT systems. As marketing organizations process and analyze inbound customer inquiries, product information, brand collaboration, campaign analytics and Web interactions, the data about the data (or metadata) becomes very important. The complexities around extracting this information from data warehouses requires a good working relationship between the marketing department and IT. Business performance, patterns and trends and decision support are the results of how data can be queried, filtered, analyzed and displayed. SaaS tools for marketing metadata management are emerging, but as these tools and frameworks emerge the collaborative nature of SaaS and Web 2.0 will have marketers playing a larger role in how this information is synthesized and where value can be recognized. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM
Slide 19: THE CHANGING ROLE OF PROFESSIONAL SERVICES PROFESSIONAL SERVICES BlueWolf Group www.bluewolf.com WHY THEY’RE INNOVATIVE: The growing popularity of SaaS delivered applications has changed the game for professional services. Less and less, consultants are asked to install, test, and tune software (tasks that once made up 50% of any application deployment project). The focus is now on defining, creating, customizing, and deploying effective business processes through the flexibility of on-demand applications. Blue Wolf approaches SaaS with rapid configurations and bite-sized deployments top of mind. If success can’t be defined in 90 days (regardless of client size) then success criterion is reassessed by either desired function or targeted group. KEY METRIC: Leverage analytics as a differentiator. The proliferation of SaaS applications in CRM has given birth to a new breed of professional services firms. As the “family psychiatrist,” today’s small but nimble professional services firms are being asked to understand the needs of sales, marketing and service departments – and to make sure they get along with IT when solving pressing technology issues. The talent profiles and staffing models required to help organizations grow revenues and optimize customer satisfaction with both SaaS and licensed CRM solutions are considerable. Skillful CRM deployments are not simple, and complex domains like business intelligence and compliance require deep subject matter knowledge. This knowledge needs to be coupled with an understanding of the customer’s business, working templates for rapid implementation and an effective training plan. Add in the nuances of SaaS, Web 2.0 and the need to consider the inputs from an extended enterprise and the old school consulting mindset of the 1990s quickly fails. Two firms that embody a new approach to professional services are BlueWolf Group and Appirio. As both of these firms know well, the economics of integrating a SaaS solution for clients who have historically invested in licensed software present some new realities. Project timelines, resource management needs, and hiring profiles are shifting. In addition, non-traditional competition from BPO firms and digital agencies are creating new dynamics for pursuing business that may focus as much on creative problem solving as they will on technical competence and cost savings. A few other examples are listed below: • Overall project investments are lower: With SaaS, organizations are now spending only a fraction of what they did five years ago when deploying a licensed software solution. • Reduced consulting fees: The reduced need for software configuration and customization work calls for rapid proofs of concept that quickly turn into full-blown deployments. • Rapid project timelines: The well-publicized success of SaaS has convinced buyers that a six to eight-week deployment timeline is the norm. While this might be realistic in some cases, rapidly integrating a SaaS solution (either sales, marketing or service) with order management, reporting or other back office functions requires specialized skills and an efficient project plan. • Specialists: Mid-market clients want and need “utility infielder” consulting talent: a project manager, BA, database analyst and trainer – all rolled up in one. These clients also gravitate toward consultants who actually have “field” experience as former sales, marketing or service professionals. Even though the technical training curve for SaaS consultancies are flatter than those of a licensed software integrators, these “business-minded” profiles can still be challenging to find. PAGE 18 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 20: • An opportunity to develop IP: The lack of a high margin recurring revenue model has long been an issue for value creation with professional services firms. As SaaS-focused consulting firms work with clients, they are many times the first to identify opportunities for bolt-on applications. Depending on the talent level in a given firm, these applications can be sold independently or through partner ecosystem portals to create an incremental revenue stream and improved gross margins. Outsourcing services is yet another area where SaaS-based solutions are positioned to grow beyond traditional “labor-based” solutions. Embedded SaaS technology is not only helping organizations continue to target cost reductions, but also to cast the focus on growth, profitability and an improved customer experience. BPO for sales, marketing and service is evident in many provider solution bundles, but the solution benefits of flexibility, cost containment, geographic leveraging and alleviating concerns over long term contracts (vendor lock-in) and rigid workflow rules are still at the top of the list and may tip executives to favor SaaS-enabled BPO. The most visible arena for a “data services” model of outsourcing to proliferate will support marketing disciplines. • Data accuracy and opportunity scoring: With the amount of human CSR Unified Account Management Desktop and financial resources dedicated to marketing, analytical solutions Sales Analytics & Reporting e-Commerce & Order Management are being sought to help validate decision marking. BI vendors with Inbound Communication Incentive Compensation Sales Team Performance Dashboards MARKETING DATA Human Capital Performance Management SaaS-based analytical solutions&can bridge the chasm of separate data SERVICES Sales Coaching & Training silos and share contact &centerSales Operations call notes with Performance as shown in marketing Management Negotiations Contract Management Configuration Management ReachForce Communication Internal Figure 12. Proposal & Quote Management Mobile Sales Presentation Generators Applications Forecasting Channel Management Voice Live Product & Service & Web SelfCustomer Chat & Service Delivery Support SelfInteraction Presence Service Training Standards Community Platforms Mgmt VOIP Remote Contact Center Agents Outsourced Contact Center Customer Service Portals / Microsites Customer Asst’d. Product Dev. Order Processing Contact Center Life-Cycle Management Technical Support Case Management Mobility Solutions / Dispatch Field Service Management Case Resolution / Reporting Customer Service Analytics Enterprise Feedback Management Service www.reachforce.com Account Preparation Figure 12: RFP Response and Pursuit Microdiscipline Cluster – Successful Lead Conversions Opportunity Management Territory Management Lead Conversion Analytics Multi-Channel Sales Development Prospecting/Contact Management Promotional Management Lead Qualifications & Scoring Lead Development Outsourcing Web to Lead Trade Promotion Event Management WHY THEY’RE INNOVATIVE: Lead Management Planning and Strategy Service Inbound Communication Source: TripleTree, LLC Web Marketing Advertising Planning and Strategy Sales s Email Marketing Media Intelligence and Monitoring Campaign Planning & Optimization Performance Management Product Content Management Ad Placement & SEO Internal Communication Marketing Spend Management Loyalty Marketing Marketing Product Messaging & Positioning Affiliate Management 1:1 Account Decision Preparation Data Quality Compliance Marketing Support Analytics Detection Data Assessment External Communication Customer Experience Management Customer Data Hub Web Site Analytics Partner Feedback Management Marketing Analytics & Econometrics Product Management Product Engineering and Launch Competitive Market Analytics Unstructured Data Analytics Privacy Management Marketing Planning and Calendars Customer Information File Pricing Strategy Marketing Resource and Asset Management Alliance & Partner Relationship Management Data Assessment ReachForce is unique because of their focus on the core of demand generation – the data upon which an outreach program is built. ReachForce uses both SaaS and professional services to build campaigns that identify individuals based on roles, not just titles. This dramatically increases the typically identify a role only 1% of the time. This hybrid approach builds a more reliable link between marketing and sales and as it optimizes lead quality. KEY METRIC: Align processes and technology for a better business outcome. quality of contacts delivered because titles Marketing Lead Management Planning and Strategy External Communication Marketing MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 19
Slide 21: • Executive education is required: Just as organizations have started to de-silo, executives need to undergo the same transformation. The best professional services firms are often viewed as “trusted advisors” to IT departments. By working with sales, marketing and service executives to leverage information to build better products and more effectively manage the relationship between IT and the business units, they will increase their influence and cement better relationships. Other roles for SaaS professional services firms may include helping clients understand broader issues and events in a marketplace and simply educating the executive management at a prospect on the merits of an on-demand deployment. The market is changing faster than ever before and because professional services firms often have strong client intimacy, they are being seen on some levels as business technology advisors. Below is where TripleTree sees professional services firms addressing the changing market over the next several quarters. Figure 13: Professional Services and the Changing SaaS Market “ Wait and See” On Fallout From Vendor Consolidation Marketing Automation Platforms Focus on Customer Value and Broader Analytical Platforms PROFESSIONAL SERVICES Internal Focus on Compliance Early Days of SaaS Analytics Vendor Focus Appirio www.appirio.com WHY THEY’RE INNOVATIVE: Appirio is disrupting the $600B worldwide IT services market by approaching enterprise class organizations with a Web 2.0, SaaS 2.0 and Services 2.0 mindset. This mindset leverages the intersecting trends of rapid innovation, lower cost structures and an early competitive advantage of the business web. Nimble professional services firms like Appirio who collaborate with clients, align closely with ecosystem partners and deploy solutions quickly are best positioned for revenue and client growth. KEY METRIC: Keep it simple and involve users early and often. Cost Cutting & Client Retention SaaS Clients Tasting Vendor Independence Hunker Down Best-In Class Solutions SaaS Validation Leverage of Convergence Collaborative Platforms Emerge 2001 2003 2005 2007 2009 Source: TripleTree, LLC PAGE 20 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 22: CONCLUSIONS TripleTree has long stated that SaaS is the most significant disruption to the Technology sector in a generation. It represents a competitive threat to legacy vendors unlike anything they have previously encountered because of its ability to add massive scale and relevance to any global player – regardless of domain or industry. An overarching question for CRM is which delivery model will emerge as most relevant: SaaS, licensed software, outsourcing or a hybrid? Cisco’s recent acquisition of WebEx represents a great example of where a network infrastructure giant followed a quiet cadence of social networking and content acquisitions with a bang. Now, Cisco has a tremendous content engine to ride on its networks and WebEx has become a much more formidable competitor for Microsoft. Last year’s investment by AmericanExpress in Rearden Commerce is another example of the growing importance of SaaS. If a primary goal of AmericanExpress is to help business customers manage mundane travel expenditures (expenditures that will be paid for via credit card), then Rearden represents the beginnings of a new platform. The list of examples is growing monthly and proves that the ways to influence customer experience are being redefined in real-time. The reality for most SaaS firms is that being a discrete solution alone isn’t enough to drive value and that a strategic exit might be possible through a nontechnology acquirer. Recent SaaS acquisitions by ADP (Employease) and Illinois Tool Works (ClickCommerce) helped the acquirers gain immediate traction in new markets. Associating a SaaS application to one or more ecosystems can prove functionality for new markets and as a result, can become valuable to new strategic suitors. Many domains and sectors are being completely reinvented as pure-play SaaS solutions and organizations with hybrid delivery models (SaaS and BPO) emerge. Below is a summary of other key points that were reviewed throughout this report. Ecosystems: The need to provide specific business value will continue to drive the evolution of SaaS ecosystems. Platforms will emerge from these ecosystems where vertical industry expertise and critical business support functionality becomes embedded in the underlying architecture of a vendor solution. CRM platform decisions (both business and IT) will be driven by their ability to impact customer value. Collaboration: Collaboration toolsets have become the critical link to capturing the exchange of information between organizations and their extended enterprise. Because most SaaS collaboration vendors are still emerging and offer only discrete functionality, the sector will consolidate quickly as point solutions won’t be viewed as viable long term solutions. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 21
Slide 23: IT: As marketing moves from art to science, CIOs will increasingly take an active role in supporting the ways in which sales, marketing and service professionals access, share and analyze information to benefit the customer experience. Collaboration, workflow and content management are three factors driving IT into a resource/collaborator relationship with business units. SaaS vendors who understand this relationship and exploit the notion that business units and IT are enmeshed will be well served. Marketing: Marketing automation represents one of most intriguing SaaS categories of all those tracked by TripleTree. Presently, there are only a few players delivering comprehensive offerings in what is otherwise a sector starving for a leader, and a buyer community that is accepting of on-demand delivery models. Spend management, compliance and analytical applications are three areas where SaaS vendors will make a meaningful impact. Professional Services: Hiring business-minded consultants who can quickly relate to, assess, and recommend process and workflow changes for their clients will be in high demand. In addition, a strong understanding of how analytical applications can help CEOs make better decisions coupled with good relationships with key ecosystem vendors will earmark the leading consultancies. Unleashing Value: The enterprise software sector will continue to consolidate for the near term and SaaS delivery models will be rewarded with valuation premiums above licensed software. However, the market is now seeing the beginnings of a squeeze on SaaS valuations which represent multiples on EBITDA as well as multiples on revenue. The more S-1 filings that get delayed or pulled and the more IPOs that trade sideways or down will reinforce the fact that acquisition may be the best path to liquidity for most SaaS vendors. As shown in Figure 14 on page 23, waiting even a couple of years to grow revenues may not necessarily bring a higher valuation as TripleTree predicts M&A multiples will decline and begin to resemble licensed software valuations. Legacy industry leaders like SAP, Oracle, Microsoft and others are finally responding to on-demand pressures in CRM by building or acquiring competencies. In late 2005, these firms stopped refuting the success of the on-demand CRM category and began a concerted effort to enter the fray. TripleTree is convinced that CRM vendors who do not develop an ondemand offering in sales, marketing or service risk becoming marginalized. Finally, TripleTree believes organizations will soon acknowledge that Business Relationship Management may be a better characterization for the workflows and PAGE 22 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 24: Figure 14: Potential Changes in SaaS Valuation Over Time 3-5x REVENUE Software as a Service Premium Valuation Metrics (based on revenue multiples) x SaaS 2.0 • Standard delivery model • $50M+ in revenue • 25%+ operating margins • Steady growth (10-15%) • Platform technologies; broad focus • Limited number of “pure” SaaS firms • Average size $5-30M in revenue • Typically operating at/near breakeven • Discrete technologies; narrow focus Broad Buyer Landscape Limited Buyer Landscape Traditional Valuation Metrics (based on EBITDA multiples) Today Revenue EBITDA Metric Valuation $10 million $1 million 3-6x revenue $30-$60 million Tomorrow $30 million $5 million 7-12x EBITDA x $35-$60 million 7-12x EBITDA Today 3+ Years Source: TripleTree, LLC supporting technologies that can improve a customer’s experience, power the extended enterprise and stoke the fires of innovation. As an investment bank and strategic advisor, TripleTree is committed to helping emerging companies understand how to take advantage of trends like those outlined in this report. We welcome the opportunity to learn more about your business and how we can help your team climb to the next plateau of market leadership. TripleTree, LLC is a research based investment bank serving growth companies, sophisticated investors and global acquirers. TripleTree conducts proprietary industry research which guides our work in M&A, growth capital and financial advisory services. Our value-based approach benefits technology-enabled businesses in sectors like healthcare, where delivery models are converging; or where CEOs and investors are in search of creative ways to disrupt markets and unleash value. TripleTree’s unique personality is shaped by the experience of our principals, who as business thinkers and builders collaborate to identify strategic solutions that maximize value for our clients in a dynamic marketplace. MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 23
Slide 25: APPENDIX - Chart 1: M&A Overview for CRM Vendors (partial list) Date May-07 Target Target Digital Cement Buyer Pitney Bowes Buyer Description Description Price Price / Revenue Multiple NA Pitney Bowes is focusing on "high growth" sectors within the marketing and mail. This acquisition will help Pitney better manage communications with mail. This acquisition will help Pitney better manage communicatons i $40.0 their customers. their customers. This acquisition grows Business & Decision's international business and strengthens its US, UK, India and German presence and capabilities while strengthens its US, UK, India and German presence and capabilities while helping to improve their ability to acquire, develop, and retain customers. helping to improve their ability to acquire, develop, and retain customers. $50.9 May-07 Inforte Corp Business & Decision Group 1.4x May-07 eVergance Partners KANA Software Apr-07 Kefta Acxiom Corporation Apr-07 Arkona Inc. DealerTrack Holdings Feb-07 Feb-07 BeVocal Inc. RESPOND Group Nuance Communications CDC Corporation Feb-07 Touch Clarity Omniture Dec-06 KNOVA Consona Corporation (Formerly Made2Manage) KANA will expand its professional services portfolio to meet growing demand for consulting and implementation services. eVergance Partners, LLC, a management consulting and systems integration firm offering end-to-end NA consulting services for CRM optimization, knowledge management, and Web self-service deployments. Web self - service deployments. This acquisition by Acxiom will build upon their platform of personalization for This acquisition by Acxiom will build upon their platform of personalization for sales, marketing customer service and will help Axciom to to better sales, marketing andand customer service and will help Axciombetter target $9.0 and dynamically deliver deliver relevant content to web users. target and dynamically relevant content to web users. This acquisition gives DealerTrack, a provider of on-demand software and data solutions for the automotive retail industry, increased functionality to data solutions for the automotive retail industry, increased functionality to $58.9 provide an on-demand dealer management systems for automotive provide an on-demand dealer management systems for automotive dealerships dealerships. This acquisition expands Nuance's existing product portfolio with aasolution This acquisition expands Nuance's existing product portfolio with solution set for mobile customer lifecycle management and a range of premium $139.7 services for the mobile consumer. services for the mobile consumer. The acquisition will boost CDC's enterprise complaint and feedback The acquisition will boost CDC's enterprise complaint and feedba k c management solutions offering and provide inroads to the financial services NA vertical. services vertical. This acquisition expands the Omniture Online Business Optimization This acquisition expands the Omniture Online Business Optimization Platform and positions Omniture for further growth by way of increased Platform and positions Omniture for further growth by way of increased automation and optimization. The acquisition is expected to give Omniture $51.5 automation and optimization. The acquisition is expected to give Omniture expanded market opportunities by providing new entry-point as well as crosssellcross-sell opportunities. opportunities. Gives Made2Manage a broadened, more powerful customer management Gives Made2Manage a broadened, more powerful customer management offering based on the individual strengths of the KNOVA and Onyx offering based on the individual strengths of the KNOVA and Onyx applications. M2M plans to leverage KNOVA’s existing application applications. M2M plans to leverage KNOVA’s existing application $47.0 programming interfaces for CRM integration with Onyx’ss leading Serviceprogramming interfaces for CRM integration with Onyx’ leading ServiceOriented Architecture as they believe they can be quickly integrated using Web services. Web services. This acquisition will give Atlas a broaded advertising campaign management broader solution that will provide online media planning, buying and ad serving to solution that will provide online media planning, buying and ad serving to $30.3 enterprises. It also provides integration and software development services. enterprises. It also provides integration and software development services. The acquisition brings leading edge technology and deep industry expertise The acquisition brings leading edge technology and deep industry to WebTrends. Now WebTrends can offer customers a leading online to WebTrends. Now WebTrends can offer customers a leading online marketing optimization solution. They now have aablend of deep online marketing optimization solution. They now have blend of deep online NA advertising expertise and innovative technology that solves fundamental advertising expertise and innovative technology that solves fundamental challenges facing marketers. challenges facing marketers. Skywire’s acquisition allows them to become one of the largest providers of software and services targeted to specific vertical industries. The new entity $127.0 will work to further its global reach and expand upon its 1,600 company will work to further its global reach and expand upon its 1,600 company client base. client base. The addition of FNS gives Innovation Group a a strong foundation in North The addition of FNS gives Innovation Group strong foundation in North America. FNS uses a combination of call center outsourcing services and America. FNS uses a combination of call center outsourcing services and $50.0 rules-based web technology to successfully connect insurance carriers, thirdrules-based web technology to successfully connect insurance carriers, party administrators and self-insureds with their customers. party administrators and self -insureds with their customers. The transaction will help build out a a stronger CRM offering that will include The transaction will help build out stronger CRM offering that will include Web-based sales force automation and customer relationship management Web-based sales force automation and customer relationship management $2.3 software solutions. software solutions. The acquisition of Onyx further solidifies Made2Manage’s enterprise The acquisition of Onyx further solidifies Made2Manage’s enterprise software and services offering. The addition of Onyx also provides a second software and services offering. The addition of Onyx also provides a second $92.0 platform for industry consolidation, and extends the geographic reach of our direct distribution capabilities. direct distribution capabilities. Alterian seeks to meet aacritical marketing need: the integration of online and Alterian seeks to meet critical marketing need: the integration of online and database marketing through the acquisition of Dynamics Direct, an email database marketing through the acquisition of Dynamics Direct, an email $4.3 and online marketing technology innovator. and online marketing technology innovator. The acquisition will accelerate RightNow’s customer experience The acquisition will accelerate RightNow’s customer experience management development efforts by combining RightNow’s patented management development efforts by combining RightNow’s patented $9.0 knowledge foundation with Salesnet’s workflow engine. knowledge foundation with Salesnet’s workflow engine. Infor continues its strategy to acquire and consolidate. This time it’s aamajor Infor continues its strategy to acquire and consolidate. This time it’s major competitor. With the acquisition, Infor becomes third-largest enterprise competitor. With the acquisition, Infor becomes third-largest enterprise $1,610.0 software firm in thethe industry. software firm in industry. Increases the functionality of its customer intelligence platform. Increases the functionality of its customer intelligence platform. NA The acquisition bolsters Unica’s vision of becoming the first firm to deliver The acquisition bolsters Unica’s vision of becoming the first firm to deliver end-to-end, cross-channel marketing solutions. It also bolster’s its web end-to-end, cross- channel marketing solutions. It also bolster’s its web $22.8 analytics and internet marketing offerings. analytics and internet marketing offerings. The acquisition by Alliance Data System’s Epsilon Interactive will create one The acquisition by Alliance Data System’s Epsilon Interactive will create $90.0 of the largest e-mailmail service and marketing firms in its space. one of the largest e service and marketing firms in its space. Median $50.0 NA 2.6x 4.6x NA NA NA 1.4x Dec-06 Accipiter Solutions Atlas NA Dec-06 ClickShift WebTrends NA Dec-06 Docucorp International Skywire Software 1.4x Nov-06 First Notice Systems Innovation Group plc 2.5x Sep-07 Smart CRM Alliance Technologies Consona Corporation (Formerly Made2Manage) Alterian plc RightNow Technologies Infor Global SAS Institute Unica Epsilon Interactive 1.1x Jun-06 Onyx Software 1.6x May-06 May-06 May-06 Mar-06 Mar-06 Feb-06 Dynamics Direct Salesnet SSA Global Technologies Veridiem Sane Solutions DoubleClick Email Solutions 3.3x NA 2.2x NA 4.0x 2.2x 2.2x Source: TripleTree, LLC PAGE 24 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 26: APPENDIX - Chart 2: Venture Capital Investments and M&A Activity in CRM (Licensed and SaaS) SALES Includes CRM vendors offering solutions for: campaigns, email, delivery, data mining, warehousing, database, analytics, real-time information, business intelligence and reporting. 50 45 40 35 Sales Transactions 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 Mergers & Acquisitions Venture Capital Investments Source: TripleTree, LLC MARKETING Includes CRM vendors offering solutions for: leads, search tools, web forms, call scripting, scoring tools, proposals/ quote generation, presence detection, configuration, web conferencing, contract management, workflow and approval. 180 160 140 120 Marketing Transactions 100 80 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 Mergers & Acquisitions Venture Capital Investments Source: TripleTree, LLC SERVICE Includes CRM vendors offering solutions for contact centers, support, service, collaboration, email response, email service and customer care. 80 70 60 Service Transactions 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 Mergers & Acquisitions Venture Capital Investments Source: TripleTree, LLC MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 25
Slide 27: THE TEAM Kevin Green, Managing Partner • Co-founded TripleTree, LLC • 25+ years building and advising IT companies • Senior executive roles in public and private IT companies; two as CEO • Active with numerous industry associations, and Board of Directors, including SIIA and Connextions • BA and MBA, University of San Diego David Henderson, Managing Partner • Co-founded TripleTree, LLC • 22+ years in venture capital, business development and as a senior operating executive • Seven years of public accounting experience at Arthur Andersen • CEO of a $400 million asset bank holding company • Active Board of Director on several public and private companies • BA, Moorhead State University; Certified Public Accountant Scott Tudor, Partner • Joined TripleTree in 1998 • Specializes in IT Outsourcing & Managed Services and Healthcare IT • Worked on more than 30 transactions with leading global companies such as UnitedHealth Group and Hewlett Packard • Served as TripleTree’s research chairman • BA and JD, University of Illinois; MBA, Carlson School of Management, University of Minnesota Chris Hoffmann, Senior Principal/Research Director, Technology • Joined TripleTree in 2005 • 19+ years of experience an operating executive, consultant, and analyst in the technology industry • Transaction activity focus in the areas of software and technology • Former President of Tier1 Research; executive positions at Gartner, GE Capital Consulting and IBM Global Services • BA, University of Minnesota-Duluth; advanced studies through the University of Minnesota and Michigan State University Brian Klemenhagen, Senior Principal • Joined TripleTree in 1999 with over ten years of combined investment banking and Wall Street equity research experience • Primary engagement manager across technology, software and outsourcing sectors • Principal contributor to TripleTree’s SaaS research • Prior to joining TripleTree was with RBC Dain Rauscher • BA, Gustavus Adolphus College; MBA, Carlson School of Management, University of Minnesota MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 PAGE 26 Q3 2007 CRM CONVERGENCE WWW.TRIPLE-TREE.COM MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406
Slide 28: THE TEAM Peter Erickson, Senior Principal • Joined TripleTree in 1998 • Transaction focus on consumer health, human capital management and business services • Sell-side M&A and capital growth client representation across software and services domains • Prior to joining TripleTree, managed international development programs through the National Forum Foundation in Washington, DC. • BA, DePauw University; MBA, Carlson School of Management, University of Minnesota Scott Donahue, Principal • 15+ years financial strategy analysis and business development consultation including marketing, operations support, and technical product development • Expertise in IT operations and services delivery approaches • Wall Street experience • Served in management roles at leading IT firms • BA, University of California - Santa Barbara; MBA, University of Michigan Scott Prentice, Associate • Focus on M&A and private placement activity in the technology sector. • Previously worked on M&A activity at Ingenix, a division of UnitedHealth Group • Prior experience included technology capital investment at Target Corporation and as an IT consultant with Computer Science Corporation • BA, Bethel College; MBA, Carlson School of Management, University of Minnesota Michael Boardman, Analyst • Specializes in research and analysis of industry trends and investment opportunities within Software and IT Services • Prior experience includes an internship with Merrill Lynch • Held a Cisco Certified Networking Associate Degree (CCNA) • BA, Carlson School of Management, University of Minnesota Jeff Kaplan, Senior Advisor • Advises TripleTree’s technology team • Founder and Managing Director of THINKstrategies • Founder of the Software as a Service (SaaS) Showplace® and Managed Service Showplace® • Founding member of the SIIA SaaS Executive Council • Frequent speaker at industry events and contributing columnist for BusinessWeek, Mass High Tech Journal, Financial Times of London, and Network World, among many other industry leading publications For a complete list and profiles of the TripleTree team, please visit our website at www.triple-tree.com MINNEAPOLIS 952.253.5300 WWW.TRIPLE-TREEE.COM SAN DIEGO 858.792.3406 MINNEAPOLIS 952.253.5300 SAN DIEGO 858.792.3406 WWW.TRIPLE-TREE.COM Q3 2007 CRM CONVERGENCE PAGE 27
Slide 29: About TripleTree TripleTree, LLC is a research-based investment bank serving growth companies, investors and global acquirers. TripleTree conducts proprietary research that guides our work in M&A, growth capital and financial advisory services. Our value-based approach benefits technologyenabled businesses in sectors like healthcare, where technology and services are converging in new delivery models and in other industries where management and investors are in search of creative ways to penetrate and dominate markets and build value. TripleTree’s unique personality is shaped by the experience of our principals, who as former business builders and transaction advisors create strategic outcomes that maximize value for our clients. For further information, visit our website at: www.triple-tree.com Copyright © 2007 by TripleTree, LLC Minneapolis t f 952-253-5300 952-253-5301 San diego t f 858.792.3406 858.792.3407 7601 France avenue South Suite 150 Minneapolis, Minnesota 55435 12526 High Bluff drive Suite 300 San diego, ca 92130