On-Demand Computing

Back in October I made a very downbeat assessment of the state of the economy and its impact on the CRM industry. While I winced hugely when Joel Spolsky announced the end of the tech recession back in February, a straw poll of vendors suggests that while the last quarter of 2008 was pretty dire, the first quarter of 2009 has been largely business as usual. So, what are we seeing in the CRM market:

The project pipeline is much more volatile with a much great likelihood that ‘done deals’ can be postponed or cancelled, making it much more difficult for vendors to plan their businesses.

Vendors have been making staff redundant.

Some of those vendors seem to have made too many staff redundant in response to the Q4 lull, and are finding themselves under resourced after the Q1 up-tick.

There seems to be much more movement in terms of end users shifting support contracts between CRM resellers – presumably because of concerns over long term viability and because some resellers will have a reduced quality of service because of cost cutting.

What I haven’t seen is much evidence of CRM vendors or resellers going out of business or consolidating, but it’s still early days. However at this stage it seems the CRM market is substantially more robust than I was expecting, and with a few potential green shoots appearing in the economy in recent weeks perhaps my dark predictions were misplaced. This may be because companies recognize that even in recession winning and retaining customers is vital, however I also wonder if we’re seeing the fulfillment of projects which were initiated before the financial melt-down and that we may see a slow down later in the year.

Ultimately I’m still not sure I’m wrong, but I will concede there is the possibility, and in this respect at least I'd be delighted to be proved so.