Competitive Analysis

Salesforce’s Customer Relationship Management (CRM) is frequently cited as the most popular CRM system on the market, even overtaking CRM applications from large companies such as SAP, Microsoft, and Oracle. The most recent studies distinguish Salesforce (salesforce.com) as holding 18.6% of the CRM market share, followed by SAP at 12.1%, Oracle at 9.1%, Microsoft at 6.2% and IBM at 3.8% (Columbus, 2015). (Refer to Figure 1 for a graphical representation of market share distribution and revenue information for the top CRM providers.) Among this list of market share competitors, Salesforce has set itself apart by using the Software as a Service (SaaS) software distribution model, in which the Salesforce application is hosted by a service provider using the cloud. Salesforce is considered “the most iconic SaaS firm” according to Gallaugher, which gives the company a competitive advantage (Gallaugher, 2013). Salesforce also offers a mobile application, so users can obtain real-time data outside of the office. However, competitors are now developing their own mobile applications and gravitating more towards SaaS, thus Salesforce will need to develop a new differentiating factor in order to hold competitive advantage over other CRM vendors. (Information Week, 2015).



Figure 1. Top CRM Software Spending by Vendor, 2014. (Columbus, 2015).




Further, new companies are emerging that specialize solely in CRM applications. Applications from these companies, such as Zoho and Act!, pose an even greater threat to Salesforce. As shown in Figure 2, Act! trails just behind Salesforce in number of customers (those who pay to use the service), with 71,000 in comparison to Salesforce’s 104,000 customers. Zoho tops the list for the greatest number of users (non-paying customers) for its CRM system with 13 million users, with SAP and Salesforce following with 8 million and 5 million users, respectively (Capterra, 2015).



Figure 2. Top 5 CRM Applications by Total Customers and Total Users (Capterra, 2015).




Act! and Zoho have a large customer and user base because of their low prices in comparison to other CRM vendors. Act! ranges in price from $10/user/month for the most basic version to $35/user/month for the most advanced. Zoho is the only popular CRM application that has a free edition (for up to ten users) that is popular among small businesses (See Figure 3 for more information on competitive pricing.) This results in the highest number of users for Zoho (13 million in comparison to Salesforce’s 5 million) because there is no fee to use the application.

While there are some cheaper alternatives to CRM, Salesforce is consistently ranked as having the best value for its price. As a result, it is recommended that IVK Corporation adopts Salesforce as its CRM application. While its price is higher than other systems, it is not the most expensive option on the market. Further, this price ensures that there is strong customer support available, well functioning applications for a number of devices including laptops, desktops, tablets and mobile devices, and a specialized Financial Services cloud specifically for use in the financial services industry. These features would benefit IVK Corporation’s advisors by streamlining the preparation process for client meetings, and improving client-advisor relationships. Salesforce is consistently rated higher than competitors for its ease of use, intuitive user interface, frequent system updates, and reliable customer service and well worth the investment. While adopting a CRM system can be costly and may require a great deal of time for implementation, it is valuable in maintaining relationships with customers according to Harvard Business Review (Binder, 2015). See Table 1 for more information and comparisons of the CRM vendors reviewed in this analysis.


Table 1. A Comparison of Top CRM Competitors based on costs, value and strengths of applications and risks and weaknesses of the application. (These applications were selected by ranking highly in market share, number of users, or number of customers as well as by availability of information on each system.)

The following table was created by Group B and compiled from Capterra's comprehensive database on CRM softwares (Capterra, 2015).

References:

Binder, Christof. (2015). Why Strong Customer Relationships Trump Powerful Brands. Harvard Business Review. Retrieved November 3, 2015.
https://hbr.org/2015/04/why-strong-customer-relationships-trump-powerful-brands

Capterra. (2015). Top CRM Software. Capterra, INC. Retrieved November 4, 2015. http://www.capterra.com/customer-relationship-management-software/#infographic

Columbus, Louis. (2015). Gartner CRM Market Share Update: 47% of all CRM Systems are SAAS Based, Salesforce Accelerates Lead. Forbes. Retrieved November 5, 2015. http://www.forbes.com/sites/louiscolumbus/2015/05/22/gartner-crm-market-share-update-47-of-all-crm-systems-are-saas-based-salesforce-accelerates-lead/

Gallaugher, J. (2013). Information systems: A manager's guide to harnessing technology, version 2 (Version 2.0. ed.). Irvington, NY: Flat World Knowledge. Retrieved September 13, 2015.

Information Week. (2015). Salesforce Vs. The Competition: A CRM Primer. Information Week. Retrieved November 5, 2015.
http://www.informationweek.com/cloud/software-as-a-service/salesforce-vs-the-competition-a-crm-primer/d/d-id/1320966