Sales Configuration Vendors: 1H03 Magic Quadrant
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1 Markets, R. DeSisto Research Note 4 February 2003 Sales Configuration Vendors: 1H03 Magic Quadrant There is much activity on the sales configuration MQ. Oracle, Siebel and Selectica emerge as leaders, Trilogy's strategy shift removes it from consideration, and PeopleSoft leverages Calico technology assets to become a visionary. Core Topic Customer Relationship Management: Business Strategies, Technologies and Applications for Sales Key Issue How will sales organizations use technology to meet the challenges of changing internal and external forces and business and market dynamics? In the past 12 months, the number of best-of-breed (BOB) vendors in our sales configuration 1H03 Magic Quadrant (see Figure 1) has been reduced. Cybrant was acquired by Blue Martini, and Trilogy changed its positioning from a cross-industry sales configurator player to a vendor focused on managing product data for specific vertical industries, such as automotive and high technology. Figure 1 Sales Configuration 1H03 Magic Quadrant Challengers Leaders As of February 2003 Ability to Execute SAP i2 Technologies Oracle Selectica Siebel Systems Blue Martini PeopleSoft Pivotal Firepond J.D. Edwards Baan Click Access Commerce Commerce Chrome Systems BigMachines Comergent Technologies Tacton Systems ResolutionEBS Niche Players Visionaries Completeness of Vision Source Gartner Research Gartner Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.
2 To be placed on the Magic Quadrant, vendors must complete the Gartner sales configuration Magic Quadrant process, including completing a vendor survey, demonstrating product configuration capabilities and supplying live, referenceable customers for Gartner validation. Leaders Oracle has entered the Leaders quadrant because of its: Number of reference customers worldwide Sales configurator's deep integration with other Oracle applications, such as manufacturing Enhanced functionality Easy-to-use rule maintenance environment New business generated for product configuration during the past 12 months Oracle has shown the ability to solve simple and complex configuration problems. It also has a large global support team worldwide that supports its leadership position. Oracle does not have any live references in a mobile environment on the 11i version of its sales configurator. Oracle's Advanced Pricing provides a flexible rule engine. It is based on PL/SQL, leading to some user performance issues. The pricing maintenance environment is cumbersome for pricing managers, and can't be deployed on a mobile laptop. By 2004, Oracle will re-architect its pricing configurator (0.7 probability). Siebel Systems has entered the Leaders quadrant because of its: Proven ability to bring configuration technology to a large number of organizations with simple requirements Vertical industry expertise, such as telecommunications Multichannel support (mobile, call center and Web) Integration with its leading customer relationship management (CRM) suite platform Siebel has been used in some complex, high-technology environments; however, some users state that the rule maintenance environment and rule testing tools could be improved. Users said that Siebel's sales configurator could solve nested-configuration problems, but it was somewhat difficult to model. Users with typical sales problems should find Siebel's maintenance tools satisfactory. 4 February
3 Selectica has entered the Leaders quadrant because of its: Proven experience to handle complex configuration problems in multiple deployments Expanded pricing configuration functionality User interface for maintaining sales configuration rules Scalability However, even with its technical strengths, Selectica faces challenges. Users believe that Selectica can improve the ability for modelers to share configuration models during the model building process; enable easier integration of the end-user deployment interface with the configuration knowledge base; and improve system measurement tools. Selectica also must provide distributed configuration model maintenance. Selectica's implementation scores were scattered: Some users were quite satisfied, while others believed that they had received just adequate support. Selectica's biggest challenge will be how to spend its large cash reserve ($110 million). It must expand its CRM application breadth to assure longer-term viability. Challengers SAP's sales configuration quadrant position has not changed since the previous iteration of the Magic Quadrant (see "Sales Configuration Vendors: 1H02 Magic Quadrant"). SAP CRM 3.1's offers enhanced administration functionality for maintaining configuration models and rules. However, it must improve maintaining pricing rules. Users believe that SAP provides tight integration with R/3 master data and order execution capabilities. If SAP s sales configurator does not support current SAP user requirements, enterprises should look at BOB vendors. SAP s key challenge is to integrate its new product modeling environment with its traditional R/3 sales and distribution, and product life cycle management. Through 2003, SAP will be a challenger in the sales configuration management market (0.7 probability). Users like i2 Technologies' back-end maintenance environment for modeling pricing and product configuration rules. To improve its market position, i2 needs a concentrated, coordinated sales effort for selling into the sales and marketing buying center. It has not been able to take advantage of its pricing capabilities because of its limited experience in selling to the marketing buying center, which typically owns pricing in an organization. Some users believe that i2 consultants could have more sales configuration deployment experience. i2 represents one of the more-compelling solutions for integrating demand and supply chain management functionality with sales configuration. 4 February
4 Visionaries Firepond's revenue is declining. However, for manufacturing organizations, Firepond provides a competitive and proven solution. Users have reacted favorably to Firepond's workbench for maintaining product and pricing configuration rules and models. Firepond's vendor viability is a concern, but the company should be considered one of the leading vendors providing interactive-selling-system functionality, especially for manufacturing and financial services companies. Blue Martini's acquisition of Cybrant provides Blue Martini with robust sales configuration functionality for product and pricing configuration. The Cybrant acquisition, as well as Blue Martini research development, enabled Blue Martini to become a viable player targeting manufacturers with business-to-business CRM and partner relationship management (PRM) suite needs. Its architecture lets enterprises implement these processes in a many-to-many partner relationship model, in which resellers, distributors and manufacturers require a high degree of collaboration. Overall, users were satisfied with their Cybrant (pre-acquisition) deployments. However, Blue Martini must prove more PRM suite deployments, where sales configuration is a component of the implementation. In particular, it must leverage an integrated data model and an integrated set of system administration tools. PeopleSoft has successfully integrated Calico Commerce's configurator for its connected version of PeopleSoft 8.8, but it runs the configurator as a separate application on the mobile platform. The latest version of the configurator offers pricing and product configuration, with compelling maintenance environments. PeopleSoft has been successful in investing in Calico's vision and converting it into released software. This has enabled PeopleSoft to move into the Visionaries quadrant. PeopleSoft must generate live, referenceable accounts, standardize on the Calico technology across its manufacturing suite, and more tightly integrate the mobile sales product with the sales configurator. Baan s functionality vision for its sales configuration products, especially for enterprise integration, has been solid. Baan claims 10 customers in implementation on its new E-Configuration Enterprise product. The Enterprise version provides consistent access and deep integration of configuration models across all enterprise functions for example, CRM and enterprise resource planning (ERP). Users who implemented the older Baan Configurator stated that migrating rules to the new platform was difficult. This difficulty is consistent with any new version of a sales configurator, because users seek to use improved features 4 February
5 that were not supported in the older version of the product. Baan is an attractive solution for current Baan ERP customers, and it offers pricing configuration functionality. It focuses on specific vertical industries aerospace and defense original equipment manufacturers (OEMs); Tier 1 and 2 suppliers; automotive OEMs, Tier 1 and 2 suppliers; electronic manufacturing services and peripherals; and industrial machinery. Users like the modeling environment of the E-Configurator Enterprise. They believe that Baan has to increase the flexibility of the end-user interface and offline usage of the configurator. Comergent Technologies entered the sales configuration Magic Quadrant in It has appeared on more shortlists, primarily during evaluations where clients are looking for order management and PRM suites with sales configuration functionality. Comergent customers like the simplicity of the maintenance environment for administering product configuration rules and ERP integration capabilities. Comergent is a good alternative when enterprises are trying to implement an order management or PRM suite of applications as part of their sales configuration deployments, because of Comergent's order management and PRM functionality breadth. One challenge for Comergent is to provide better support of unstructured input by end users. Unstructured inputs enable a user to select an invalid choice and have the model automatically deselect choices that were previously selected, to keep the model in a consistent valid state. Current Comergent customers have not required this functionality; however, as Comergent expands its customer base, the company will have to support it. Users believe that Comergent provides a reliable architecture for managing product information, a good customer support organization, and a scalable architecture. Comergent also provides offline configuration capabilities, with one customer in the process of implementation. Another issue cited by Comergent customer references was its performance and ease-of-pricing administration. Comergent claims to have enhanced its pricing capabilities in its upcoming release. Access Commerce moved into the Visionaries quadrant in Its key challenge is to expand its U.S. operations. In the first six months of 2002, 29 percent of Access Commerce's license revenue came from North America. In 2001, 16 percent of this revenue was from North America. Users have cited its multilingual capabilities and ability to support complex assembleto-order environments as aspects that the product does well. Some users cite Web-based maintenance of sales configuration rules as a functionality gap, and performance for large concurrent user environments as an issue. To improve performance, Access Commerce improved its ability to handle object pooling in its September 2002 release. Object pooling allows common rules 4 February
6 and data to be stored in memory once, and be shared by multiple users. Resolution EBS provides nested-configuration capabilities, pricing configuration and strong back-end maintenance tools for managing configuration rules. Users state that its maintenance environment simplifies configuration model complexity. Some users cited a limited math function set to solve engineer-to-order configuration problems. Its biggest challenge is to increase its distribution and market awareness. Niche Players Pivotal targets the high end of the midsize-enterprise and the low end of the large-enterprise markets with its products and services. Its product configurator will support large-market opportunities, and provides a pure thin-client administration environment for configuration rules. It has proved its ability to handle complexity in its customer base. It offers pricing configuration through customization. Users believe that Pivotal provides good functionality at less cost than BOB competitors. Users state that Pivotal's error reporting and integration with legacy systems could be improved. J.D. Edwards position has not improved substantially on the Magic Quadrant because its product configurator lacks a true constraint-based configuration engine. Users state that J.D. Edwards' advanced pricing tool has met their needs and was a big improvement from its traditional pricer. Users cite good integration with J.D. Edward's OneWorld, but limited integration to third-party external systems, such as product data management. J.D. Edwards claims that it has live integrations with Agile Software and MatrixOne; however, Gartner could not substantiate this claim. Tacton Systems has a simple-to-use environment for modeling product configuration rules. However, it has limited distribution and implementation in North America. Tacton has appeal for European midmarket enterprises that are seeking a cost-effective solution. Although BigMachines has a limited customer base (10 customers), it provides compelling packaged functionality for industrial product manufacturers (for example, pumps and compressors) and enabling technology to support engineer-toorder manufacturing processes. BigMachines claims to provide industry templates (data model) for pumps, valves, machine tools, oil and gas field machinery, power transmission, and material handling. BigMachines is challenged by limited sales distribution and market awareness. 4 February
7 Click Commerce bought Primus Knowledge Solutions' sales configurator in October 2001; since then, there hasn't been much market momentum for the product. The sales configurator's 4.3 release included integration to the Relationship Manager to exploit security, personalization and globalization features. The 5.0 release included integration to the Partner Portal catalog and order management features, allowing for the ordering and assembly of complex products. It also included improvements to the user interface, including a new wizard for product add-ons. Chrome Systems provides sales configuration systems for the automotive industry. It has shown excellent vision for vehicle configuration and dealership deployments. Acronym Key BOB Best of breed CRM Customer relationship management ERP Enterprise resource planning MQ Magic Quadrant OEM Original equipment manufacturer PRM Partner relationship management Bottom Line: In the next two years, enterprise resource planning vendors, such as Oracle, PeopleSoft and SAP, will expand functionality and tighten integration, making it more difficult for best-of-breed vendors to maintain market share. By 2004, vendors that provide only sales configuration functionality will cease to exist (0.7 probability). Until then, enterprises should continue to evaluate best-of-breed vendors, because there are still functionality gaps in the larger suite vendors' offerings, especially where a heterogeneous enterprise resource planning or customer relationship management environment may exist. 4 February
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