Leader: Is CRM a zero sum game?

The market for customer relationship management (CRM) software is well beyond its first stage. By the end of the last decade, Siebel had established itself as the market leader. (Is it us or is it the company the one most commonly referred to as an '800-pound gorilla'?) Now the market is hotting up.

This week saw Salesforce.com, which offers hosted CRM services, release product upgrades, announce new customers and generally start talking the talk about its place in the world. Now this is a company that famously has a hard time keeping its mouth shut. An extended quiet period around its IPO, made worse when its CEO was told off because of comments for a lengthy New York Times article, means we haven't heard much from the company for around six months.

After speaking to silicon.com this week, it seems fair to say the company is aggrieved that, without it being able to give updated guidance, some experts expected sales to be more stellar than they have been. Many software companies have been having problems, even those with a relatively good last few years, such as storage software specialist Veritas, but here we have Salesforce.com punished just as it gets to market for failing to wipe the floor with the competition.

Could it be that CRM - also the three letters that make up Salesforce.com's NYSE ticker symbol - just isn't a lucrative enough market to be in? Could it be that there's only so much revenue to slosh around, that a Salesforce.com, a Siebel and others such as Microsoft, Oracle, PeopleSoft and SAP cannot all grow at the same time, that they are in what economists call a 'zero sum game'?

The answer should be simple: no.

Analysts will point out that the proportion of organisations using CRM technology is still very small. Many big companies are on board but most vendors see huge opportunities with small and mid-market businesses.

Most businesses have for hundreds of years had some kind of CRM - it just hasn't been computerised. Wouldn't the hairdressers that uses a phone and a pad to keep regulars sweet benefit from a simple CRM implementation, maybe just costing a few hundred pounds? We think it would, as would thousands of other companies.

CRM opportunities are out there but they aren't all about landing 5,000-seat accounts. Who has the balls to address the smaller but more plentiful opportunities and prove, beyond all the high-profile botches, just what this market can be?