Three titan announcements in two weeks reveal what enterprise software vendors are actually fighting over in 2026, and it is not agents.

If you have been tracking enterprise AI announcements through 2025, you have been watching a race about agent counts. How many prebuilt agents. How many industry-specific use cases. How many customer stories. Agents were the marketing, the demo, the SKU. A year of the same playbook.

Something shifted in April 2026.

Inside a two-week window, Salesforce, SAP, and ServiceNow each published an announcement that, at first glance, looks like more of the same agent theater. Salesforce launched Headless 360 at TDX 2026 and the Agentforce Experience Layer. SAP pushed a simplified-architecture argument alongside a persistent agent memory layer on BTP. ServiceNow rolled out Context Engine and, on its SPM community blog, Fred Champlain published an essay reframing governance itself as "strategic decision debt”.

Different products. Different audiences. The same structural move.

All three titans just walked one layer down the stack.

Read individually, each announcement is a product release. Read together, they are a category shift. The competition is no longer about who has the best agent. It is about who owns the substrate those agents operate on. And each titan is staking a different piece of it.

The Pattern Nobody Is Naming

Strip the vendor branding from all three sets of material and the structural claim is identical:

“Your agents are only as good as the layer underneath them. The data they ground on, the logic they inherit, the memory they carry, the permissions they respect, and the decisions they represent. That layer is what we sell.”

These three vendors are by no means the only ones making this shift. They just did it in a remarkably short period, and on stages loud enough to frame the category.

The pitch is more sophisticated than the 2025 version. Agent count was a volume game, easy to parody and easy to commoditize once every vendor had a hundred prebuilt agents. Substrate is harder to commoditize, harder to rip out, and (not surprisingly) easier to price at a premium once customers have built architectural dependencies on it.

Each titan is claiming a different piece of the substrate. None of the claims overlap cleanly. All of them expand the vendor's footprint.

Salesforce: The Interface and Intent Layer

Salesforce made the boldest move. Headless 360 exposes every platform capability as API, MCP tool, or CLI command, which means external coding agents (Claude Code, Cursor, Codex, Windsurf) get live access to an org's data, workflows, and business logic. Agentforce Vibes 2.0 ships with open agent harnesses supporting both Anthropic and OpenAI SDKs. Developers no longer need to work inside Salesforce's own IDE.

Is the new? Not quite; API-first architectures exist for quite some time. And they are a best practice.

However!

The accompanying Agentforce Experience Layer (AXL) is the delivery side. Build logic once in Salesforce. Deliver the same agent response into Slack, Teams, mobile, ChatGPT, WhatsApp, a customer portal, or any third-party surface, with the UI rendering automatically adapted to each channel. Permissions inherit from the Salesforce platform.

This part is new.

The subtext is the real story. For twenty-seven years, Salesforce's primary interface was the browser. Headless 360 is an explicit statement that the browser has become optional. VentureBeat's framing of the Salesforce answer to "does a company still need a CRM with a graphical interface?" was a blunt no, and that is exactly the point. Joe Inzerillo, Salesforce's president of enterprise and AI technology, said Headless 360 lets agents operate directly on the platform's business logic and datasets "rather than relying on separate integrations or user interfaces”. Read together, Salesforce is telling buyers it wants to remain the system underneath, even when the user never opens a Salesforce tab.

Not everyone loves it. The "Context, Work, Agency, Engagement" framing can create the ultimate vendor lock-in architecture, and the pricing is conspicuously silent. Headless 360 is included in platform licenses today. That is a statement about today. Salesforce's historical pattern is to introduce capability in the base tier and later wrap premium SKUs around it. CIOs should be asking the pricing question before making the architectural commitment.

SAP: The Data and Process-of-Record Layer

SAP is running a different play. It is not trying to be the interface layer. It is trying to be the gravity well.

The simplified-architecture argument is a rejection of the 2024 playbook, which basically said: sprinkle Joule on top of S/4 and be AI-ready. The current SAP pitch, across the Clean Core guidance, the Reltio acquisition, the Business Data Cloud strategy, the SAP-RPT-1 foundation model for structured data, and the new agent memory layer on BTP, is a single argument: your AI is only as trustworthy as the ERP data underneath it, and most of the world's transactional data lives in SAP.

The agent memory layer deserves a deeper look. Persistent memory is where consumer AI assistants finally became useful. ChatGPT remembering preferences, Claude carrying project context across sessions. Enterprise agents have historically been stateless, forcing users to re-prime the same context on every session. SAP's answer to this problem is to build memory as a BTP service, grounded in HANA Cloud Vector, with short-term, long-term, and reflective memory tiers governed by enterprise policies (retention, right-to-be-forgotten, audit trail).

Not a plug-in. A layer.

The SAP story has one recurring weakness, though: pace. DSAG's Technology Days 2026 in Hamburg, which drew more than 3,000 participants, delivered a consistent message from users. More clarity. Less architectural theater. Customers want SAP to ship faster and integrate more smoothly, not add more conceptual layers. The "simplified architecture" framing is partly defensive. It is a tacit acknowledgment that the SAP AI stack has become overwhelming to prospective buyers and to existing customers trying to execute.

ServiceNow: The Governance and Decision Layer

ServiceNow made the most conceptually ambitious move of the three. And it did so without a single major product announcement on the day.

Fred Champlain's piece on the SPM community blog introduces "strategic decision debt" as a category. The argument: the accumulated weight of unmade, unclear, or inconsistent portfolio-level decisions is what actually prevents enterprises from turning AI capability into AI outcomes. It is not a technology problem. It is a governance problem. And, Champlain argues, the governance layer is what ServiceNow sells.

The product scaffolding around the argument is substantial. Strategic Portfolio Management. Enterprise Architecture. The newly announced Context Engine, built on ServiceNow's Service Graph and Knowledge Graph, which captures the "why" behind decisions alongside the "what." AI Control Tower for governing agent behavior. TrustCloud and ComplianceCow, both of which received ServiceNow investment, shipped AI-native risk and compliance apps directly on the platform earlier in the week, reinforcing the partner-network moat.

The piece that matters most is the language. If "strategic decision debt" becomes a term CIOs use in quarterly reviews, ServiceNow owns the vocabulary, which means it owns the sales motion. No other titan has been publishing framework-level essays this quarter. Salesforce is publishing product pages. SAP is publishing architecture diagrams. ServiceNow is publishing a hypothesis about why enterprises are stuck and is offering its product portfolio as the answer. That is analyst-grade positioning, and it is rare from a vendor.

The Two Battlegrounds

I look at all these titan moves through two lenses.

• Interface control: who owns how users and agents access business applications.
• Orchestration: who owns the layer that coordinates work across systems.

This set of announcements maps cleanly on either lens.

Salesforce is the aggressive play on interface control. Own the access, and you own the orchestration that follows. AXL is the clearest multi-surface interface-layer bet any titan has made so far. SAP's interface-control play is softer, still routing interactions through Joule and its own surfaces. ServiceNow, interestingly, is not fighting for the interface at all. It is interested in being the backbone under whatever interface the user happens to be using.

On orchestration, the roles invert. Salesforce orchestrates experiences across channels, and, excluding what MuleSoft does, is quieter on orchestrating workflows across non-Salesforce systems. SAP orchestrates processes across SAP and non-SAP via BTP, Integration Suite, Advanced Event Mesh, and now master data via Reltio. ServiceNow makes the most conceptually interesting move by extending orchestration into the decision flow itself. Context Engine plus Service Graph plus Knowledge Graph is orchestration applied to how decisions get made, not just how tasks get executed.

Three titans. Three different pieces of the substrate. No direct overlap. Significant expansion of footprint for each.

The Titans Who Skipped This Quarter

Reading these three announcements in sequence raises an interesting question. Where are Microsoft, Oracle, Adobe, and Zoho?

Microsoft in particular is the puzzle. Copilot, Fabric, Dataverse, Foundry, Power Platform. Every component needed to tell the same substrate story is already on the Microsoft roadmap or already shipped. The gap is the narrative. Microsoft has the pieces, but Satya Nadella's team has not bundled them into a coherent layer-down argument the way Salesforce and ServiceNow have. If Build 2026 does not fix that, Microsoft cedes the architectural high ground on substrate for yet another quarter, while three of its main competitors keep compounding.

Oracle's AI Data Platform push is similar to SAP's BDC play but has not surfaced an equivalent integrated narrative. Adobe remains anchored to content and CX. Zoho continues its integrated-suite, lower-price playbook with less architectural theater, which is arguably the right move for Zoho's segment and consistent with its philosophy. It keeps the company out of this conversation, though, and that is a choice with consequences.

What Buyers Should Actually Do

The three recommendations from my LinkedIn post on this hold, and they deserve elaboration.

Stop evaluating AI features in isolation

A feature list is a snapshot. The substrate is what survives the next 18 months. Ask every vendor you are evaluating which layer of the substrate they claim to own, analyze whether the claim is architecturally coherent or three product pages stapled together, and what happens to your architecture if the vendor executes on that claim versus if they don't. Features come and go. Architecture commitments do not.

Ask the pricing question now, not later

Headless 360 is included in Agentforce 360 platform licenses today. SAP's agent memory layer is part of BTP today. ServiceNow's Context Engine sits inside existing product lines today. None of these vendors has announced whether they will keep the substrate capabilities in the base tier indefinitely. The historical pattern says no. Build your architectural dependencies with pricing clarity, not without it. And build the architecture in a way that those dependencies do not become impossible to unwind later. After all, today’s pricing clarity might be tomorrow’s pipe dream.

Treat "memory," "context engine," and "experience layer" as three costumes for the same problem

All three titans are building a substrate for agents to reason over. The vocabulary differs. The underlying capabilities: persistent cross-session state, grounded enterprise context, consistent multi-surface delivery are the same, just with different strengths and weaknesses in each implementation. Write down the capabilities your agents need. Map each vendor's product to these capabilities.

Do not let vendors map you to their product pages.

Three Things to Watch

Whether Microsoft responds at Build 2026 with a bundled substrate narrative, or lets Copilot keep carrying the whole story alone.

Whether SAP's Reltio integration actually ships as the promised trusted-data spine for Joule Agents or becomes another BTP component that customers must stitch together themselves.

Whether Salesforce's "Trust Moat" language around AXL holds up in enterprise deployments, where the every agent needs consistent permissions across Slack, Teams, ChatGPT, a customer portal, and more. If it does, lock-in critique loses force. If it does not, the critique becomes the dominant analyst read.

The Question That Matters

All three titans have moved one layer down, coming from different angles. The logic is sound. The architectural ambitions are serious. The open question is whether three companies each trying to own a different piece of the substrate produces three coherent platforms, or three partial platforms that leave buyers integrating the substrate themselves.

Twelve months from now, we will know whether April 2026 was the moment the agent conversation matured, or the moment it splintered.

I am curious whether CIOs are reading these three announcements as compatible stories, or as three competing bids for the same piece of architectural real estate.

During ZohoDay 2026 in Austin, I had the opportunity to sit down and chat with Tony Thomas, the head of Zoho US. Tony has been in this role for just over a year, navigating an economic and technological landscape that got ever more complex. Our conversation covered everything from shifting macroeconomic realities and Zoho’s upward trajectory into the mid- and enterprise market, to the fundamental ways generative and agentic artificial intelligence are challenging the traditional economics of software implementation. With software pricing already being under pressure, it is more than likely that implementation costs are next. I said it before, the time-and-material billing that SI’s are still favoring is probably going the way of the Dodos.

What became abundantly clear during this conversation was that Zoho continues to forge its own contrarian path, adapting to market pressures by continuing to rethink how software value is delivered. One could even say that Zoho’s thinking gets validated by current developments.

TL;DR  

If you prefer watching the interview to reading, find the full video here.

The Macroeconomic Squeeze on the SMB  

The software market does not exist in a vacuum, and the broader economic climate over the past year or so has been challenging for businesses. Historically, SMB segment has been Zoho’s mainstay. However, Tony noted that especially this demographic is facing severe headwinds. Tony pointed to the K-shaped economy, where large enterprises continue to see gains while smaller businesses and large segments of the populace are struggling or being left behind.

Small businesses have "taken it on the chin", battered by general economic uncertainty and the specter of tariffs, casting doubt on the speed of their recovery. Consequently, while Zoho is still acquiring new SMB customers who are actively seeking better value, the existing customer base at the lower end of the market is undeniably feeling a squeeze. Zoho’s way of delivering value helps these companies.

Moving Upmarket: From Products to Solutions  

In spite of these uncertainties, Zoho has continued its push upmarket, finding significant traction in the mid-market and enterprise tiers. But succeeding in this space requires a fundamental structural shift in how a vendor engages with its buyers.

As Tony explains, small businesses generally lack the budget and time for lengthy software deployments; they demand products that work out of the box. With growing size, however, businesses don't buy out-of-the-box products; they buy solutions instead. These larger organizations demand software that is tailored, verticalized, and aligned with their strategic differentiators, in other words, requires an implementation project. For Zoho, this means adopting a heavier-touch engagement model by investing the time to deeply understand a customer’s specific business requirements and customize their offerings, whether directly or through partners.

Currently, Zoho’s sweet spot in the US is definitively the mid-market rather than the top-tier, Fortune 500 enterprises, which remain tethered to legacy incumbents. Mid-sized businesses of increasing size, however, are coming to Zoho seeking integrated, cost-effective architectures infused with modern AI capabilities.

The Vanishing UI and the AppOS Strategy, and Fixing the Disturbed Value Equation  

With the combination of generative AI and no-code and low-code environments, we can see what I call the disturbed value equation. A company might purchase a highly capable software platform at a low licensing cost, only to watch the total cost of ownership balloon drastically due to massive implementation and systems integration fees that can get avoided by adopting these technologies, either directly in the software or by system integrators. This chasm of low subscription costs and comparatively high implementation costs reduces the software's perceived upfront value drastically.

When pressed on how Zoho plans to correct this imbalance, Tony acknowledged the intense pricing pressure surrounding implementations and pointed out a new emerging reality: as customers are increasingly required to pay for advanced AI and intelligence layers, their tolerance for bloated implementation fees is vanishing.

Zoho’s answer is to use AI to compress the cost and time of these deployments, starting from the early stages of the implementation projects. Tony shared that Zoho’s solution teams are already using AI to record customer calls and automatically generate system specifications. While this AI-driven efficiency is currently most effective in the mid-market, bypassing the sluggish steering committees of massive enterprises, it represents a clear path toward restoring the value equation. By bringing implementation costs down, Zoho aims to free up customer budgets for high-value intelligence features. I am looking forward to these specifications being used 

Coupled with this is the rise of generative AI and no-code tools, which are democratizing app development. I challenged Tony on how this "DIY" capability impacts Zoho’s business model. He countered that while users will undoubtedly experiment with building their own apps, companies will quickly hit a wall of chaos. True enterprise applications require strict governance, security, and deep integration with core company data.

On top of this, we are currently witnessing a Titanic battle between different vendors to dominate AI orchestration layers and the access to the user who increasingly bypass traditional software interfaces in favor of interacting with data through chat platforms like Teams or Slack.

To manage this, Zoho is positioning its AppOS architecture as the foundational platform. Zoho intends to be the bedrock, providing the essential, compliance-heavy core applications like finance and ERP that are simply too risky to vibe-code from scratch. On top of this secure foundation, Zoho will empower customers to build dynamic, context-specific AI applications, ensuring the core data remains governed and trusted.

Looking Ahead  

Zoho operates distinctly differently from its peers in the CRM and enterprise spaces. To thrive in this new era, the company is transitioning from a product-centric, best-of-breed mentality to a holistic model combining platform, product, and deep, customer-centric intelligence. Helping customers navigate the K-shaped economy while fundamentally disrupting the cost of enterprise software implementation is no small feat, but Zoho's philosophy makes it a vendor well worth watching.

Three Main Learnings for Enterprise Software Buyers  

The Value Equation is Shifting from Implementation to Intelligence: Historically, a massive portion of a software budget went toward implementation and IT consulting fees. Today, the real differentiator is artificial intelligence and advanced analytics. If buyers spend their entire budget on getting the software up and running, they won't have the resources left to invest in the intelligence layers that actually drive competitive advantage.

Vibe-Coding Requires a Foundation of Strict Governance: Generative AI and no-code tools are allowing end-users to build custom apps quickly. However, doing this in isolation creates shadow IT chaos. For mission-critical systems involving financial compliance, data security, and legal requirements, organizations cannot rely on ad-hoc DIY apps. They need a heavily governed core platform that safely manages the data while allowing for flexible edge applications.

The Application UI is Evolving, Not Disappearing: The market is seeing a push toward headless apps and conversational UIs, where users interact with business applications via platforms like Cliq, Slack or Teams rather than logging into dedicated software frames. However, complex tasks like data analysis or chart visualization will still require traditional interfaces. The future is probably multi-modal, not exclusively conversational.

What to Look for When Evaluating Enterprise Software  

When you are assessing new enterprise software platforms, keep these criteria front and center to ensure long-term viability and value:

Vendor-Driven Implementation Efficiencies: Ask the vendor how they are actively driving implementation costs down. Look for vendors who use AI to compress deployment times and cost, so you can invest your budget into value-add intelligence rather than the plumbing.

Platform Architecture: Evaluate the software's underlying architecture. Does it offer a robust, secure, and compliant cross application foundation for core business data, while simultaneously providing safe, integrated AI and no-code tools for your teams to build customized workflows on top?

Omnichannel User Experiences: Don't get locked into software that only offers one way to work. Ensure the vendor supports traditional and modern work interfaces and offers frictionless orchestration layers.

Pre-Built Compliance and Certifications: Evaluate the vendor's commitment to keeping up with regulatory compliance. You want a vendor that absorbs the cost of updating rules, tax codes, and security certifications so your internal IT team doesn't have to constantly rebuild workflows to stay compliant.

Do you remember the uproar that Microsoft CEO Satya Nadella recently created about the death of SaaS? Although this is obviously some hyperbolic BS, there is a grain of truth in there.

Not the death of a business model, but something that is hidden somewhat deeper. It is about the eternal struggle between suites and best of breed software, which is in its third iteration – at least – since I am in the CRM world.

The grain of truth lies in the potential change of the way that business and other applications actually are built. When I look at ERP and CRM systems, I see software stacks that often are twenty years old, or even older. Look at S/4HANA. It still has a lot of R/3 inside although there are many new parts. Or Salesforce, which essentially dates back to the early noughts. SugarCRM has a fairly old core, too, even posterchild Zoho has software that dates back twenty years. The list goes on and on. Essentially, all these systems have morphed from fairly specialized solutions into monolithic giants.

Mind you, this is not all bad, as these systems are often incredibly powerful.

However, there are some challenges with it. I admit that, although I am a suite guy myself. These challenges are often around speed of innovation and, by definition, a degree of incompleteness. Requirements change faster than any software product vendor can implement them. And even if they successfully implement them, the software stack becomes increasingly more complex and harder to enhance and to maintain.

Harder to maintain not only for the vendor but also for the customer, even with the help of knowledgeable systems integrators. Additionally, there is always a functional gap, albeit sometimes only a perceived one. So, custom code and integration to specialized software stay a need. This need simply cannot be overcome by packaged applications.

The result is a big system of which often only a small percentage of the delivered – or custom developed – code is actually in use by customers.

There have been numerous attempts at changing this. We had COM and DCOM in the Microsoft world as well as similar technologies already last millennium, we have seen microservices and composable architectures. Hasso Plattner, the founder of SAP already in the early 2000s formulated a vision of an ERP that is entirely built on composable modules that get connected by workflows. SAP Business by Design was built following on this idea but didn’t achieve this vision.

In short, none of the attempts at solving the problem of bloating software systems actually solved this problem.

And now, we have a new technology with generative and agentic AI systems. This makes me ask a deceivingly simple question.

Do agentic AI systems solve the bloated applications issue?

During a recent CRMKonvo that I had with Bob Stutz, one of the most knowledgeable and influential persons in the CRM industry, Bob suggested that the technology clearly has the potential to achieve this. Vendors, however, need a mindset of solving actual business problems based on data. Bob is quite vocal about platforms having outlived their usefulness as they resemble band aids that are applied on top of other band aids. What is needed instead, are what he calls “focused applications” that push information to the user instead of making them pull it.

The consequence that Bob draws from this is that packaged applications, and especially platform-based applications, are reaching their end of life and need to be replaced by focused applications that are built with the help of – or even by – generative AI specifically to the users’ needs.

To quite an extent, I do agree, as I am talking about smart applications for quite a while now. I consider smart applications as applications that take work away from the users and adapt to changing user needs, based on data and use. Do we have them yet? No. Do we have the necessary bits and pieces, aka technology? Largely, yes.

So, on the outset, smart, or focused applications, look like a promising way to avoid application bloat. I also believe that agentic AI will play a major role in the way that these applications are built and delivered.

However!

Agentic systems, digital agents, can’t deliver this yet. There is some work to be done to make sure that they do not “stray off their reservation”. Agents inherently are probabilistic. This means that agents, and in consequence, agentic systems need to become more deterministic, i.e., correct, accurate, and reliable. Furthermore, the agents that make up the system need to interact in order to collaborate on a task. That requires three main ingredients, a protocol, common metadata and shared data. The protocol is a contract on how to interact plus a planning and orchestration entity to manage the agent collaboration. Metadata that supports business semantics and data require a joint access layer, let’s call it a (business) data cloud or a data fabric, or even a graph.

Combined, these ingredients form nothing else than a platform, but a platform with a twist. Ultimately, this is a (meta) data management platform with generative AI-based analytics and (no code / low code) development environment, combined with a telemetry system.

Thinking (or dreaming, if you like) this to an end, this platform can be used by vendors to create productized applications, and by consultancies or customers themselves to build highly specific applications. The more decentralized the application development becomes, the more focused the applications will be, and the less bloat there probably is. As the development itself is highly AI supported in this scenario, the development costs will become marginal. There are already technology vendors that consider a productivity increase of developers by a factor of 100 achievable. This productivity increase applies not only to developers in enterprise software vendor firms but to all others, which may fuel a technology change away from prebuilt solutions and back to custom applications.

So, to answer the question … in theory it’s possible, in practice, it will still take some time. There will need to be some governance around it to avoid another Lotus Notes graveyard of unused applications.

And, if it happens, the enterprise software world may very well get upended. Do I see this as very likely? No. Why not? There are at least three reasons.

Firstly, too many processes that run supported by software do actually not differentiate a business, i.e., makes an advantage that is enough to warrant a custom implementation. Second, what I call gravitational forces. Companies invested far too much into their systems to do a reimplementation anytime soon. Look at core banking systems. They still run on Cobol. A third one is that most businesses do not want to turn into tech companies. They want to use software, not create it.

Still, the world of enterprise software will change. What is your opinion? Custom applications, customizable applications, or anything in between? The judge is still out.

Fresh from the 2025 SugarCRM Analyst Summit, waiting for my plane home, it is time to sort my thoughts.

From Monday, 1/27 evening to Wednesday 1/29 in the morning we had some time jam packed with information and good conversations with SugarCRM execs, customers, and in between analysts. The main summit started with a bang, namely the announcement that industry icon Bob Stutz joins the SugarCRM board of directors, which is something that few of us, if any, had foreseen. This is exciting news.

With David Roberts, who succeeded Craig Charlton in September 2024, SugarCRM itself has a new CEO with a long time CRM pedigree.

As with every leadership change, this promises some change. Every new CEO evaluates what they see vs. where they want their company to go and then, together with the team, establishes and executes a plan to get there. Usually, this involves some change in the structure of the executive leadership team, too.

This is what happened and happens with SugarCRM. The company had and has a strong leadership team, with new faces like Paul Farrell (joined in March 2024), Jason Glass, and soon a new Chief Customer Officer – although with Christian Wettre or Chris Pennington some other strong players left for various reasons.

As I have written in the past, the company has a great yet varied history and, more importantly, potential due to great software. What SugarCRM to some extent is missing is a distinguishable identity. In a market that is as crowded as the CRM/CX market, differentiation is of crucial importance. As I have said and written before, SugarCRM’s messaging needs to change to avoid being perceived as a “me too” product.

Functionally, SugarCRM has a competitive sales solution, and fair marketing- and customer service solutions, plus a number of add-ons, some of them really interesting, e.g., sales-i, its intelligence add-on or Sugar Connect, which makes Sugar available outside the application frame. Whenever I conduct a software selection for clients of mine, I witness the strength of the Sugar Sell solution myself. It regularly makes it at least amongst the finalists and often gets selected by my clients. This is not only due to its capabilities but also thanks to strong performances and demos by the Sugar sales teams. And this is in spite of Sugar Sell resembling more of a toolbox than a preconfigured solution with built-in processes. Again, this is testament to the functional strength of Sugar Sell (although it has some deficiencies, too).

From a messaging point of view, really everyone (and their dog) talks about platform and being a CX player. SugarCRM needs to change away from these two points, as they also do not communicate much about outcomes, let alone value.

And Sugar will do this. More about this in a bit.

So far, Sugar’s value proposition revolves around the platform, automation, and discovering opportunities. Targeted personae include marketing, sales, and service leadership, although the winning chances in marketing and service against formidable opponents like HubSpot or Zendesk are slimmer than in the sales area – which does not mean that customers who chose Sugar Market or Sugar Serve are unhappy, on the contrary! Still, I regularly heard from Sugar executives that “we tend to win, when the customer need is sales, and not marketing driven.”

In addition, the messaging is a little about everything for everyone. It is not that Sugar doesn’t deliver but the value is not immediately clear. Add to that the fact that the flexibility offered by Sugar lets the fresh application appear a bit like a toolbox rather than a ready-to-use system.

To be fair, Sugar initiated a transition already more than a year ago, based upon the realization that the company is highly successful in the manufacturing, wholesale and distribution markets, in particular in the mid- and upper mid-market. This created an obvious focus area for the company. Yet, the message didn’t evolve enough to support this change.

After the analysis done by David Roberts and his management team, this is subject to change. One of the words we heard over and over during the analyst summit is “focus”, the other one is “aligned execution”. Both are terms that I strongly associate with Bob Stutz, so I see a formidable alliance of seasoned executives with similar values and passions joining forces now.

Which leads me to the strengthening of Sugar’s transition

David Robert’s vision for SugarCRM can be summarized with “boldly focus on our strengths while not forgetting about our customer base – and be clear about it”. The new Sugar strategy, including an upcoming more specific tag line revolves around it, from a product- and technology view, but encompassing GTM and partner strategy. Stay tuned, I cannot and will not take away the thunder. So, a drumroll here …

My point of view and analysis

The strategy is straightforward and consistent. As said, it builds upon earlier realizations and extends a change that is ongoing for more than a year now.

Its risk, apart from the human aspect (not everyone lets readily go of ingrained habits) lies in not to antagonize the existing customer base outside the sharpened ideal customer profile (ICP). This requires a balance that is hard to maintain. Yet, keeping churn numbers low via word and action is of crucial importance.  So, careful balancing and execution is key. I am quite sure that Bob Stutz can and will give great advice, as he has executed this kind of strategic shift multiple times.

One thing that is really refreshing and creating signal in the noise is the notable absence of “agentic AI”. Instead of focusing on buzzwords, SugarCRM looks at AI as a means to achieve business objectives. I regularly advise my clients that AI is a means, not an end. Communicating it as such is far more powerful than jumping on the buzzword train.

The executive team that we met on the analyst day seems fully on board, which is extremely important, as following through do mean some changes, not in the least some more process rigor and some preparational work, which is ongoing.

Given all this, I am excited about 2025 and 2026 and very interested in seeing how Sugar evolves. Repositioning will take a bit, but I see a sweet future for SugarCRM.

Sorry, I could not resist this one.

One of the terms du jour is „industry cloud“. We hear it even more often than even platform or CX at this time. Why is that? Why do we speak about them only now and not for a longer time? After all, we have seen industry solutions forever, albeit on premise. Yes, the concept of vertical solutions is that old. What is the value of an industry cloud?  How does "industry cloud" differ from "industry solution"? And does this term really describe what industries need?

These are only some of the questions that we wanted to discuss with Vinnie Mirchandani as part of aCRMKonvo.

Hurricane Ian intervened and Vinnie had more important things to do than a CRMKonvo. Luckily, everything turned out well for him.

Good for the CRMKonvos team, that friend and Enterprise Irregular Jon Reed could jump in to what turned out to be an even more interesting topic than we hoped for. We will continue this discussion with Vinnie on a later occasion. He has quite something to say about industry clouds, and comes from another angle than Jon.

 The problem with industry clouds 

Most business applications have started their life as horizontal applications. This makes a lot of sense, as a good deal of the functionality that a business needs, and the application offers, is not exactly industry specific. Instead, it is applicable across a range of industries. Therefore, business software vendors at first concentrated on developing horizontal functionality, as this functionality is reusable across and customized for numerous industries.

Often with only little effort.

This applies to SaaS software as well as it did apply to on premise software back in the day.

So far, so good. One challenge is, of course, that it is not always that easy to configure a business app to specific needs that easily. This, on the contrary, often needs substantial effort and knowledge.

The result is that horizontal solutions often under-deliver, as one can see in soaring implementation costs, even in times of the cloud.

Another challenge is that an industry solution is first of all a solution, which means it regularly stretches across more than one business application. This requires integration between the involved applications. This, in turn, is something that not all software vendors can deliver. The same is true for many system integrators as there are many ways to integrate different applications.

These deficiencies, combined with one of the main promises of the cloud, led to increased silo'isation of the application stack that got (and still gets) implemented at businesses. In addition, ERP software has a longer history of targeting industries than e.g., CRM software or analytics software. When it comes to industry specific CRMs, Jon rightfully names the acquisition of Vlocity by Salesforce a milestone that brought this topic into the forefront of business software vendors' minds again. Again? Yes, again, as there have been Industry flavored CRM solutions already at the beginning of this millennium.

 The real value proposition 

Industry clouds target industries and therefore promise the delivery of specialized functionality at low implementation cost. This is quite a big and enticing promise, especially in uncertain times like these, when not only efficiency but, even more so, cost play a major role. Implementation projects need to be short and deliver value fast.

According to Jon, there is even more value. As this specialized functionality must include responding to new or changed regulations, the customers do not need to take care of this anymore. This also reduces technical debt in the customer systems. In addition, and this is a fascinating thought, in a multi-tenant cloud environment, a solution vendor can provide all sorts of (anonymized) benchmark data. This data can help companies discover where they can improve relative to their peers. The challenge is, of course, data ownership and privacy.

Do industry clouds live up to this promise, or are they really “a great way to advance your career in marketing and our industry by taking existing functionality, creating a nice sexy new term that gets everyone excited and then, when they start scratching under the surface, they get more and more confused” - as Jon put it provocatively?

Or is this not that provocative a statement at all? We need to acknowledge that businesses need to make revenues and profits. These come from markets and it is a job of marketing to create and/or nurture markets for their company.

Well, according to Jon, industry clouds do not live up to their promise, yet. One important reason for this is that they regularly replace software that is very mature and in use by businesses for a long time. In contrast to this, a newly built software just cannot cover the full breadth and width of functionality that businesses require. Sometimes this software even misses on functionality that is essential to run a business.

 Are industry clouds the right thing? 

Another reason is that "industry cloud" is not about technology, which is what the term industry cloud suggests. The term delimits thinking. Instead, we need to think about an "industry-ecosystem" that surrounds the software. The software is still important; but it is only part of the solution. An industry solution requires domain expertise, which is often not available within the software vendor. It requires the frequent or constant exchange of domain experts with each other to identify how to solve challenges best. Good places for this knowledge exchange are industry events or even gatherings that are part of vendor events. According to Jon, this can even work well for smaller companies.

These domain experts then need to work out with engineers and UX experts how to implement the solutions. This can create a winning proposition.

This is why I prefer to talk about industry solutions and rarely use "industry cloud". Industry solution does not have the strong focus on technical delivery that the term industry cloud has. It gives a more holistic view of the idea.

How to create winning industry solutions 

This leads directly to the question of how to fill the idea with life.

An industry solution always needs domain expertise.

Additionally, an industry solution requires a strong technical platform. This platform enables the building of industry specific functionality, based on horizontal functionality.  The exception is the vendor targeting a small number of industries.

Creating winning solutions requires the platform provider having the strength and honesty to not only say where they are strong - but also to state where they are not!

Why?

Because this is exactly the spot where industry play and ecosystem play overlap!

Furthermore, it builds trust. No company can be equally good at everything. Once companies admit weaknesses, an ecosystem around industries can emerge. Then they can bring together domain and software experts. Partner companies can fill in the identified gaps. Practitioners can design solutions that augment each other. All this becomes easier if the partners can trust the platform provider.

So, an industry strategy needs to be part of an ecosystem- and partner strategy.

This strategy needs three industry buckets.

The first bucket contains the industries that the platform owner delivers solutions for, or intends to deliver solutions for. These are the industries where the platform owner feels strong or already has a strong offering. Partner companies are not forbidden to provide solutions for these industries, but they are aware that they are potentially competing with a big company in any given deal. Partner solutions are still also free to augment these industry solutions for use cases that are not covered by the platform provider.

The second bucket has all the industries that the platform provider leaves to partners. They can build their own industry solutions without competing with the platform provider. The platform owner should even support the creation of these industry solutions. The important part of this is that this is not a temporary commitment by the platform provider but an assertion. This is about trust. Removing the risk of getting crushed enables ecosystem partners to confidently invest in a way that helps all stakeholders: customers, platform provider, partners.

The third bucket is the most interesting one. it covers the industries that the platform provider may or may not enter. The platform provider should also indicate the likelihood of its entry into these industries. While this involves some uncertainty for ecosystem partners, it also provides the transparency that is essential to take investment decisions.

These buckets need some stability. Still, they can and will change over time. However, changes should not come as a surprise to the ecosystem partners. Partnership requires mutual trust and respect to be valuable for everyone. The platform provider shows this trust and respect by committing to provide a stable framework. This gives the breathing space for the partners. These partners commit to providing complementary solutions.

The winner is the customer.

The result of the customer winning is that the other ecosystem members win, too.

Industry solutions are a platform play!

On November 10, 2022, SugarCRM held its annual analyst day in the beautiful Chaminade resort in Santa Cruz. In attendance was an elusive crowd of 14 analysts and six customer representatives, along with the SugarCRM executives.

We gathered to inform ourselves about what is going on, what will be going on, and of course, to listen and talk to customers about how they solve their business challenges with SugarCRM. All of this in plenum- and individual formats along with good space for informal talks.

The event

Apart from the very important social activities that enabled SugarCRM executives, customers, partner representatives and analysts to mingle and talk, the event consisted of several informative briefings that ranged from strategy and roadmap sessions across the platform to all-important customer interviews. The last session was an open question and answer with the executive team.

The customers in attendance have been very diverse, including (for profit) social business, a jet charter and service business, educational, medical businesses, and a governmental organization. Some of them are fairly new Sugar customers, some of them are with SugarCRM for a long time. What all of them have in common is that they have non-run-off-the-mill businesses and processes and that they use at least two of SugarCRM’s solutions. Some key insights that they shared were that they are often able to adapt their systems to changing needs by themselves and that, whenever they needed the support, it was readily available. Two of the stories brought very notable points. One business explained its ability to merge twenty plus acquisitions in less than two years into their system, so that their sellers could sell more efficiently.

One of the medical companies essentially managed to cut all slack activities out of their providers schedules so that they can concentrate on treatments. To put this in perspective, this company was able to triple the patient time of their personnel by automating necessary administrative and billing processes and/or making them more efficient by smartly using the SugarCRM platform.

The customer interviews also didn’t shy away from looking into the bumps that the implementations, and hence the partnerships, did overcome. Nor did the customers shy away from asking the one or other hard question, too.

Another very notable session was about partnership with a focus on and especially the ISV relationship with Triblio that brings more account-based marketing ABM into SugarCRM – with SugarCRM being the first one to use this integration themselves. The excitement about this partnership is clearly visible, culminating in a story about a head of sales calling a prospect about an RFP, inquiring whether the interest is legit as the vendor doesn’t see prospect personnel researching their website – a fact that changed in an instant and caused the return question: How do you know? 

The answer was: Because I use SugarCRM – and yes, the head of sales was SugarCRM’s GM Americas.

The official part concluded with an open Q and A with the executive team that showed quite a cohesion. 

The bigger picture

The market with the biggest opportunity is the market of midsized companies, whereas midsized can be quite a broad range. This is one aspect that makes it interesting. The second one is that it allows for a mix of indirect and direct engagements which helps vendors scale and serve the development of specific functionality that a vendor alone would not be able to deliver. Third, it is where projects become bigger, i.e., where the cost of acquisition of any individual customer vs. the potential revenue goes down. 

Why not the enterprise market then? Because the enterprise market is mostly saturated. There are only so many fortune 5,000 companies. Additionally, this market is dominated by a smaller number of big vendors, most notably Microsoft, Oracle, Salesforce and SAP when it comes to business software, or bigger niche players, looking at marketing technology or e-commerce, or other adjacent markets.

However, most of these players have one thing in common: They have a hard time scaling down and creating offerings – and offers – that are appealing to and affordable for the vast number of midsized companies.

This is similar for companies that focus on the midmarket but then there are so many more potential customers that the risk of being disrupted from below is significant smaller; and it can be mitigated further by defining the lower end of midmarket low enough.

To be successful in the midmarket, it essentially requires a few things 

• An appealing set of products with sufficient functional breadth and depth, that make users’ lives easier, integrate well and are easy and fast to implement.
• As a corollary, these products should be built on one common technology base (aka technology platform) 
• Advanced analytical capabilities that provide insight to the users across the applications.
• Productivity capabilities that boost collaboration and make the system valuable to the users by helping them to work more efficiently.
• An ecosystem with resellers, systems integrators, and ISVs that enrich the vendor-delivered solutions, sell them, and implement them.  
• A strong messaging that shows differentiation and resonates with the market.

The middle four points you will recognize as the components of the experience platform flower.

My point of view and analysis

The event was organized as a presence event. One interviewed customer was participating via Zoom, which immediately showed how difficult hybrid engagement is. It is a laudable to do, still, unluckily the customer representative did not get the attention that she and her story deserved. 

Amongst the vendors that I include in the Clash of Titans, SugarCRM is a smaller one, albeit growing faster than the competition. The ambition is to double revenues in the next year. SugarCRM clearly has right mix of people and attitude to achieve this in an organic and inorganic way. 

SugarCRM targets the mid-market which the company defines as businesses with 100 – 2500 employees, regardless of revenues. The team knows that their strength is the sales force automation software; hence SugarCRM is working hard on closing existing gaps, including some functional gaps in the sales force automation area (nobody is perfect). There is a clear view on what is needed – and a strategy to get it.

Looking into the success criteria I mentioned above, SugarCRM has achieved a lot in terms of providing the users with solutions that have sufficient functional breadth and depth to make their lives easier. The solutions integrate well and are quite easy and fast to implement. SugarCRM also put considerable effort in putting its applications on one platform and, where they are not – e.g., the acquisitions – make them appear to be from a single cast. This will be even strengthened by an upcoming release. So, the technology platform is clearly in place. 

The acquisition of Node and partnerships like the one with Triblio have strongly increased the insight part of the house. There are an increasing number of machine-learning based prediction capabilities, which will bolster this. Does SugarCRM has the strongest analytical capabilities in the market as one executive claimed for Sugar Market? Maybe not, still the ability to surface and deliver insight is clearly there, from marketing through customer service. 

These insight capabilities as well as some underlying AWS capabilities that SugarCRM leverages, also help to increase user productivity, whereas I count collaboration and “office-like” functionality in this category, too. This includes mail and meetings. Thanks to own capabilities, using AWS and other partners, many of these capabilities are technically there and some are ingrained in the applications. This also includes making the services of the system available without forcing the user to log in to the system. Sugar Connect is a good example for this.

Still, I see a chance here, considering what Salesforce is doing with Slack, Microsoft with Teams, or Zoho with its set of solutions. These companies make their business solutions available through communications and collaboration solutions. Plus, people are increasingly turning to conversational UIs, especially on devices, which supports these roadmaps. 

A vibrant ecosystem is a cornerstone for fast growth. With more than 150 ISV partners and more than 200 channel partners, SugarCRM clearly has an ecosystem to fuel growth. Channel partners include resellers as well as solution partners, e.g., systems integrators. The acquisition of Outfitters strengthened the marketplace capabilities. Supporting the resellers via a small network of strong distributors was a smart move that can further help with scaling. Enabling more partners to not only resell but to also add (industry) functionality and to implement SugarCRM, will be of crucial importance going forward. This is where tuck-in acquisitions like W-Systems or Loaded Technologies are incredibly helpful. They enable significant credible own implementation capabilities and can help in enabling partners to become better. I am keen to see how the partner network evolves.

The last criterion is the messaging. SugarCRM’s tagline is “let the platform do the work”. This gets underpinned by “automate anything”, “accelerate everything” and “predict what’s next”. This messaging is about giving value to the user, which is a strong message. Along with “I am a CX vendor”, “platform” is also probably the most used term in the industry. Plus, the underpinning – strong – messages are rather technical messages. Given the emotionality that the SugarCRM team shows, it might be a good idea to connect the brand and brand messaging of SugarCRM to strong positive emotions. Sugar, as a term, surely invites to do this. 

To sum it up, if people and culture, followed by products & services and growth technology are the foundations for success, SugarCRM is clearly on a good way. 

Let the mojo rise further.

Full disclosure: SugarCRM paid for travel, accommodation for my attendance of the analyst summit

The year 2021 comes to an end. More than three years have gone by since the last look at the Clash of Titans, an analysis of how the then big 4.5: Microsoft, Oracle, Salesforce, SAP, and Adobe – along with some other players, are shaping the greater CRM and CX arena. A lot has changed since Thomas Wieberneit published his 2018 series that consisted of 4 articles:

• Platform Play
• Microsoft and SAP weigh in
• The War Cry: Oracle and Salesforce
• The IaaS Platform Providers

It is obvious that the commoditization of the business application continues, and the vendors’ focus on the underlying platform has even increased since 2018. CRM, and enterprise software in general, has always been a platform play although this has not always been recognized and sometimes even negated. Two obvious reasons for it being a platform play is that the creation of positive customer and user experiences needs a consistent technical platform, or we end up with engagements that are fragmented across interactions. This results in inconsistent and poor experiences. The second reason is that it needs a technological platform to enable and grow a thriving ecosystem.

Vinnie Mirchandani in January 2020 stated that Enterprise Software Platforms have so far underperformed. Mirchandani looked at Microsoft, SAP and Salesforce. He basically argues, without providing too many details, that the major enterprise software vendors’ platforms are all lacking ambitious goals and do not aim high enough. One of his major points is that none of these vendors has put enough emphasis in empowering, nurturing and growing their respective partner ecosystems to take advantage of the software platforms by augmenting the applications delivered by the platform vendor with meaningful software solutions of their own.

Another colleague, Denis Pombriant, in his January 2018 article Let the platform wars begin, proclaims platforms as the new battleground in enterprise software. Pombriant sees software platforms for customers as “key to making and saving money” and for vendors as a way out of commoditization, as it is “hard to find true differentiation among competing products, which naturally leads to price wars.”

In our opinion the enterprise software platform is not that new a battleground, but as part of the Clash of Titansit is becoming more evident as a battleground, even the main battleground. An enterprise software platform was always part of the battle for dominance in the customer engagement – or putting it into (marketing) industry lingo – the customer experience market. As a technology platform, the enterprise software platform is actually an integral part of it. As Pombriant argues, this is largely because of the ongoing commoditization of transactional business applications.

Until a few years ago, the technology platform was more associated with boring topics like security, user management, connectivity, systems configuration, measurement, alerting, and so on. Even analytics was, and often is, regarded as an application of its own, and not a part of the technology platform. And while topics like security, GDPR, privacy and secure data utilization are becoming more urgent, they still do not have “sex appeal.”

Consequently, it was sexier to talk about shiny topics like engagement and experience than to talk about the grease and the machinery behind them, that drives and enables the technical delivery of engagements. Please note the choice of words. There are systems of record, systems of engagement, but there is nothing like a system of experience. 

And now topics like chatbots, machine learning, AI, ambient computing, IoT, to name a few, make the machinery – the enterprise software platform – the new black.

With all this, an enterprise software platform is no longer optional, but has become mandatory, for vendors to have, and for customers to employ.

So far, so well known.

A bit less obvious is the fact that a platform market is generally a winner-takes-all market. In the end, there will be only a few dominant platforms. Vendors who want to become and stay successful on a grand scale need to be one of these few platform providers and attract partners as well as customers. 

This is the chief reason why we consult our customers that one of the very first IT strategy decisions that they need to take is the platform decision. Many of them have already taken it without being aware of it. This is a dangerous situation for them, as they might have chosen the wrong horse for their race or, moving forward, may choose best-of-breed or point solutions that do not harmonize well with the core infrastructure that they already run. The result of this is additional cost and frustration in the IT as well as business departments.

In our report The Clash of Titans we will start by explaining the framework that we will use, thus laying out the very definition of what we talk of when saying that the CRM market has evolved into a platform market or a platform play. In essence we will define what a platform is. 

The subsequent chapters then cover the big 4 – Microsoft, Oracle, Salesforce, and SAP – the big infrastructure providers, which coincidentally also have been 4, plus a bonus one. It also covers some of the smaller and upcoming players like SugarCRM and Zoho. There are surely more players to be covered, like Creatio, Freshworks, or Pega, to name but three.

If you are interested in receiving a personal copy or a copy with distribution rights, please contact ClashOfTitans@aheadcrm.co.nz.

These days every significant software vendor and some others, too, is positioning itself as a CX- and/or a platform player.

By now, it is well known, what it means to be a platform player, and this is also not the main topic of this post. Just as much: In order to be a significant CX player, one quite simply needs to be a platform player. 

Also, regardless of whether one has a platform or not, if everyone is a CX and a platform player, then obviously this is nothing that differentiates one vendor from the other anymore. Customers meanwhile nearly expect a set of solutions by one vendor being built upon one platform – or at least to appear like they are built on one platform. This basically means that “platform” as a thing to emphasize on has reached its zenith.

And then, there is an additional problem associated with the platform game.

A platform market is a kind of a winner takes it all market. Following the analysis and argumentation of Ray Wang in his new book Everybody Wants to Rule the World, in a platform market there will be only two major players. All other players are becoming insignificant or will vanish. While this sounds somewhat dystopian the point that I want to make is that there will not be a great many successful and strong players in a platform market. To use a metaphor, at one point in time a few vendors will have created enough gravity to become the entity that customers are attracted to.

It is also visible that the first vendors have understood this and are acting strongly to create this required gravity.

Salesforce seems to be one of the first ones. Regardless of whether one calls Salesforce a platform company by design, it is doing everything to grow. Analysing the company’s last quarterly figures, one can come to the conclusion that it continues to buy growth at the expense of profitability. It essentially copies and transfers Amazon’s successful model to the (wider) CRM market. 

SAP is working from its strong ERP and supply chain footprint in a bid to get more ‘share of wallet’ of the enterprise applications, both in the direction of the supply chain as well as into the direction of customer facing applications. SAP practically ‘owns’ business transactions with around 80 percent of all business transactions crossing SAP systems.

Oracle uses its strong technology stack, coming from the home base of the most powerful database, augmented by an integrated hard- and software stack. 

Microsoft, finally, comes from a strong productivity, gaming and operating system footing, combined with a wealth of data.

And these are the Titans of the CX applications world, commanding a market share of something between 35 and 45 percent of this market. These four, plus Adobe, already had a market share of more than 36 percent in H2, 2019 according to the IDC worldwide semiannual software tracker of April 2020. The rest of the market is quite fragmented. 

Even though this number is quite old, we see that the marketplace is slowly moving towards the consolidation direction that Ray also sees.

All these players also have their share of buzz and their marketing messages.

All of them have a strong ecosystem that surrounds them.

Which makes it difficult for other companies who are in the market, too, and want to differentiate themselves from the others. Of course, they have everything that is needed for a successful ecosystem play, too. Including the very important ecosystem. There are only so many levers that are left to them:

• Connecting one’s brand to strong principles and ethics that are well beyond what the marketplace usually offers.
• Tying one’s brand to strong positive emotions
• Focus on the PaaS parts of the stack supporting easy extensibility and automation
• Providing deep industry experience in a number of relevant industries to become the de facto standard
• A price point that is lower than the competition’s, while still offering attractive functionality

There may be more, but let’s concentrate on these.

These levers are used by the many players, including the tier one vendors. For example, all tier one vendors offer industry solutions. They are also more or less successfully connecting themselves to principles like sustainability or giving back. Often, this runs under the flag of ‘purpose’, one of the industry’s most misused terms.

On the other hand, Zoho does credibly showcase an ethics story, with its strong focus on privacy, rural enablement, humbleness, and employees. It is not a marketing-story, but one that is lived in the company (e.g., check cookies). This story extends into something that is very tangible for customers: Pricing. Zoho showcases that it is possible to benefit from pursuing principles; this strategy reduces Zoho’s own cost, which makes it possible to offer solutions at a low price point while staying profitable. One could call this ‘social capitalism’. It is a very good message that appeals to empathy and rational thinking at the same time – and because it is credible because the company itself also lives it.

Freshworks ties positive emotions to its brand, starting from the company’s name. Fresh is not boring. The recent customer and analyst event took up the name and was called Refresh. The message that was sent out loud and clear during this event was “delight made easy”. This story was also how the event, with all the challenges that a hybrid event has to offer, was run. The website expresses the same. So do most people I had the pleasure to interact with.

This is a strong message, because this is reflecting on something that the whole CRM/CX industry suffers from since its inception: No fun, no ease, no help is offered by the software. And it ties into strong positive emotions. The challenge is to keep up with this message over time because it raises expectations and missed expectations are a great distractor.

SugarCRM is going the route of automation and ease, with the slogan “let the platform do the work”. In contrast to Freshworks, SugarCRM is focusing more on the so-called left brained people and the rational side, talking in outcomes rather than emotions. The outcomes are more accuracy, less effort and faster time to use. These are again arguments that appeal to the ratio, not to emotion – even though the slogan is quite catchy and certainly hits a nerve. It is also a statement that raises expectations that need to be met.

Similar, ServiceNow. ServiceNow focuses on workflow, automation and offers some industry solutions. The company says “Let the work flow from anywhere”, which is closer to an outcome. The most interesting part is that ServiceNow also positions itself as the platform of platforms, i.e., a meta platform. This is a step up in the game. It recognizes that it is probably unlikely to succeed in a head-on clash with the titans but better to focus on connecting different infrastructures, i.e., different platforms. This is a smart move, also considering that many companies do not have a single platform strategy in place often run best-of-breed strategies.

What does this mean?

As said above, with every vendor emphasizing on “platform” and “CX” it is obvious that these terms have reached their zenith. While CX is an outcome – an end customer (or a user if we include employee experience) creates experiences as part of engagements – a platform is more about technology than outcomes. Furthermore, a platform is a means to an end and not an end in itself. This is very similar to “artificial intelligence” or “machine learning”. This means that it is more urgent to think about the term “platform”.

In the short term, for a company it is important to position one’s platform with a suitable story to be visible, recognized and sufficiently differentiated as a player. 

Still, while important, some of these ways to differentiate oneself might not lead to a lasting differentiation.

Having said that, tying one’s brand to high ethics and strong positive emotions is a very good thing, given that the company lives up to the promise. The positive emotions might even work better than the high ethical standards. This is because ethics appeal more to the rational being while emotions run deeper. We can see this all the time in (b2b) sales processes. 

If you have it, maintain it and tie it strongly to benefits of applications and solutions, to outcomes. If you don’t have it: Build it, but credibly.

On the longer run, there needs to be more. 

More focus on outcomes and users.

For users, outcomes revolve around three levers:

• Solutions are available wherever they are, physically and digitally
• Solutions show them what is important, and give them good advice
• Solutions work the way they do. This includes the user interface that needs to cater for text and voice

That way, the platform, that is more interesting for the IT department than the users, gets more into the background in favor of outcomes.

The News

On November 11, 2021 Freshworks held its annual Freshworks Refresh event. This year, the event had a hybrid format with around 250 customers, partners and analysts participating on site while around 17k people have registered for online participation.

There was a social pre-event and an after-event for entertainment and networking purposes. 

The event itself was themed around “delight made easy”. Naturally, it had different agendas for customers and partners on one side and analysts on the other side.

The morning was dedicated to a 4-hour sequence of keynote sessions for everyone. The event was kicked off with a keynote by Neuroscientist, entrepreneur, and author David Eagleman, who spoke about the “Science of Delight”. The closing keynote was delivered by Amy Purdy, who shared her inspiring story of how she used creativity, a positive outlook and a never-give-up attitude to turn her life from nearly dying, finding herself with a double lower leg amputation and failing organs into becoming a 3 times Paralympic medalist. Between these two speakers, who set the scene, Freshworks offered product and customer information.

Freshworks CEO Girish Mathrubootham gave a product update that linked into Eagleman’s message and a distributed customer panel spoke about their experiences with Freshworks, how they implemented Freshworks solutions and how these help the respective businesses. Rounding this off, Freshworks awarded several prizes to customers who offer exceptional EX or CX and showcased the winners of an internal hackathon. The latter is relevant because these winning solutions made it into or will make it into Freshworks products.

The afternoon was filled with customer related information in the customer and partner track and product and strategy sessions for the analysts. The analyst track started with an open Q & A session with CEO Girish Mathrubootham, a session about the changing role of the CIO and continued with product updates and a distributed fireside chat with a customer. 

The bigger picture

Every significant player – and every player that wants to be looked at as significant – is positioning itself as a platform player and its platform as the foundation for the ability to generate a great customer- and/or user experience. This can be observed in offerings for all sizes of customers, from small businesses to enterprise. The definition of what a platform is and contains varies. So does the maturity of the various platforms. 

As I have repeatedly written before, having a great technology platform is not enough to enable experiences.

There is more to being able to create an individual experience than just a technology platform. Apart from an appropriate, customer-oriented strategy and a culture to match, that is.

The platform that is needed to enable experiences at scale for organizations consists of more than IaaS and PaaS. Software vendors that want to be successful platform players need to be able to deliver on four areas to succeed:

• (Technology) Platform 
• Ecosystem
• Insight
• Productivity

By extension, this means that smaller vendors that cannot or do not want to deliver on these four dimensions need to choose the platform or platforms they want to become a part of.

My PoV and analysis

This part I need to cut into two sections, one about the event itself and one about the content.

The event

First, kudos to the team who organized it. The event was well organized and structured. The Freshworks team around Alan Berkson and Shelbi Gomez was always available with a helping hand. I think the team can be sad that only 7 analysts came on site.

Plenty has been said in the past years about Las Vegas conference venues, so I do not need to add anything but that we certainly got our ten thousand steps. Seriously, the Mandalay Bay is a good choice.

The two external keynotes by David Eagleman and Amy Purdy have been highly engaging and in the case of David Eagleman also highly relevant to the event theme. The following keynote by Freshworks founder and CEO Girish Mathrubootham showed how ease of use and delight can be combined. Doing this, he established an emotional connection around delight and ease. Using this smart approach, these terms are now tied to the Freshworks brand.

Another kicker was the customer panel with representatives of DHL, GE Digital Aviation Software, Carrefour and TaylorMade who talked about which parts of the Freshworks software they use, how the implementations went (easy as) and how they use Freshworks to pursue the digital transformation of their respective businesses. In line with the nature of the overall event, it was made up in a hybrid way with one participant attending from a remote location.

From a brand perspective, these customers are at the upper end of Freshwork’s sweet spot in the market, but then this emphasizes on the company’s ability to scale up.

These customers, as well as the customer representatives, who accepted the prizes often spoke with strong positive emotion about Freshworks, rather than only pointing out rationally where and how the products help their business. This increased the tie between delight and ease on one side and Freshworks on the other side. 

Why is this important? Because every significant player is playing a platform game, which also reduces the differentiating factors. Consequently, it is important to be front of mind when it comes to positively loaded keywords. This worked well in quite some industries, think automobiles or smartphones, to name only two. Freshworks establishes itself as a likeable brand.

In an interesting twist, Freshworks not only presented several customer awards but also gave a glance at what I would call “employee-driven innovation”. Chief Product Officer Prakash Ramamurthy presented the winners of an internal hackathon. Their implementations did make it or will do make it into the products. 

The afternoon started with an open Q&A with Girish Mathrubootham who openly answered all questions that were fired at him, which is testament to authenticity. I didn’t fully understand the relevance of the subsequent CIO session, although it seemed to partly set the stage for the AIOps topic that came up a little later. It was followed by a fireside chat with a customer and various product roadmaps along with their respective Q&A rounds. Some of the sessions were based on more detailed video information that was made available to us before the event. It was often important to have this material reviewed before the event.

The event overall felt good. It was well structured, quite rich on information and offered many strong customer testimonials. I think that especially the customer success stories have been a strength of this event. More of them might have even strengthened it even further. In any case it was good to be able to freely speak with customers.

There was ample opportunity to network with Freshworks people, partners, and customers. As written above, from a session point of view I wonder how Amy Purdy fit into the message and what the sense of the CIO session was.

Being asked, Marshall Lager confirms that “very little of my time felt wasted, and I’m the first to admit it if I tune out of a presentation. I think they missed the mark by making Delight the theme, though, because the content didn’t really bear that concept out.” 

Having been one of a few on-site analysts, what I missed was more possibility to interact with the remote colleagues. This may have been due to the tight schedule. As a caveat, I am aware that this is difficult to achieve.

All in all, I like the concept.

The messaging

Messaging is a difficult topic. Marshall Lager opines that the event tended to lean “into the message at the expense of substance.” I would agree to this as I sometimes had a feeling of questions being dodged by executives.

The topic of messaging is however, not only from a CRM (or CX) point of view, very important. During last year’s Refresh, this has been a major discussion point with the analysts, which was partly addressed.

According to Chief Product Officer Prakash Ramamurthy “CRM now does include support. Lots of investment is going into creating a unified solution. We have strong offerings in all three areas marketing, sales and service/support.”

Still, the Freshworks CRM suite message is slightly confusing. 

Freshworks announced a bundle named Freshstack, which consists of Freshsales, Freshmarketer and Freshdesk and that is dedicated to startups. Given this, it covers all functions of a CRM. Why not name it (Fresh)CRM? Especially, since some of the product slides refer to this combination of products as CRM. 

Freshsales and Freshmarketer, on the other hand, are grouped as the Freshsales Suite and marketed as an “All-in-one CRM”. This weakens the idea of the “One Platform for One Unified Business” and confuses the CRM (or CX) message. Again, CRM consists of marketing, sales, and service.

Still, this package acknowledges the trend towards fostering a closer collaboration of marketing and sales departments to achieve one common goal and not two separate ones although there is no talk about revenue operations, which is the next evolution of this trend.

The functional roadmap of the overall customer solutions suite appears sound; yet it shows that Freshsales and Freshmarketer are fairly young products.

Which is a fact that can be used as an advantage, as there is little legacy. Freshworks Head of Product for the Freshsales Suite, Peter Stadlinger is well aware of this fact. In the prerecorded part of the session he speaks of an “unfair advantage” that Freshworks has. It remains to be seen how the company uses this advantage.

Freshworks clearly positions itself as a platform vendor – like everyone else. Asked what beyond high usability the differentiators of the platform are, VP of Product Marketing, Neo, Tejas Bhandarkar maintains that “our platform strategy is based on 3 things: 

a) giving a unified experience to customers through unified customer experience, collaboration, multi-channel, federated search, etc., 

b) delivering insights built on data, enabling customers to compose their own analytics the way they want, and

c)  empowering developers to build simple as well as sophisticated apps easily.”

Prakash Ramamurthy extends that “easily customizable and extensible is what customers call out as a differentiator. The extended roadmap includes analytics.” This extension is important as several customers pointed at analytics when queried about where Freshworks could improve.

In addition to this, Freshworks recently partnered with UIflow, to enrich the Neo platform with low code abilities, while looking at Slack and Microsoft when it comes to productivity and collaboration apps.

So, looking at the components of a platform, Freshworks plays the ecosystem card in these areas.

Interestingly, Freshworks also does not talk much about AI and machine learning as part of the platform. These topics, e.g., in the form of the virtual assistant Freddy, mainly come up in the application layer. Freshworks wants to provide purpose-built features and not deliver AI as a technology. “Users do not care whether it is an AI or not”. Still, the foundation for these purpose-built features needs to lie in the platform, i.e., Neo, to allow for efficient development and deployment. I think that this topic deserves some more clarity.

However, Freshworks chose an interesting approach out of the dilemma that being a “platform vendor” is not a differentiator anymore. This approach is the use of emotion.

The message that permeated all communication is “we want your success; we are easy to deal with and we create our solutions for ease of use”. This was confirmed by customer testimonials in an impressive manner, even considering that customers who attend this type of event are rather positive and customers who get on stage are even more positive. With this, and with the themes of “delight” and “ease”, Freshworks managed to tie strong positive emotions to the brand. This is a path to differentiation that other vendors have not yet chosen to this extent, and this might give Freshworks an edge.

All this leads to the question how Freshworks gets into and grows in and with accounts. There are two main ways, organically and via the ecosystem, i.e., partners. Freshworks has partners with presences in more than fifty countries.

Although partners have not been that big a topic during Refresh2021, Freshworks has a network of more than 500 partners and a marketplace that lists 1,100+ applications. That certainly gives some scale and reach into various markets.

The company clearly positions itself for the mid-market. At the same time, it opens itself to enterprises that do not want or need too much customization but prefer functionality out of the box. Still, Freshworks wants to establish that its solutions do scale and are attractive for (divisions of) enterprises. This is in alignment with “delight made easy”.

A division that implements Freshworks then grows its implementation footprint in two ways, increasing usage across countries and rolling out additional solutions. Eventually, other divisions might implement Freshworks, too – a classical land-and-expand strategy. Asked whether the employee solutions and the customer solutions mutually enable this strategy, replies seem to suggest that land-and-expand works well between the customer solutions, e.g., a division starting with Freshdesk and then rolling out Freshsales or vice versa, starting with Freshsales and then moving on with Freshdesk; the employee solutions so far seem to play a smaller role here.

The last topic of interest is the one of industries. Freshworks does not offer industry solutions. Being asked when this will change and a vertical strategy be employed, Girish Mathrubootham answered that the company will remain horizontal to ensure that the market stays broad enough. While this is a sound answer, one might argue that addressing verticals does not reduce the size of the addressable market but adds ease to verticals that are specifically targeted. This, especially in times of industry clouds. It might become necessary to explain why Freshworks does not require industry solutions. This should be possible, also following the theme of ease. In any case it will be interesting to see how a pureplay horizontal strategy pans out.

Overall, I think that we see another interesting player emerge that can be a good and viable alternative to the bigger players in the CX market, given that customizing requirements are not too big and that there is an own local presence or a local partner.

Freshworks is a young company. The most mature products are on the customer service and ITSM sides. The sales, marketing and employee solutions are younger and, given that, still somewhat simpler than other solutions. On the other hand, there is an ambitious, young company behind them. Building and delivering on the existing messaging will be key.

The Clash of Titans seems to get an additional participant.

Zoho is a privately-owned technology company that was founded in 1996 as Adventnet, Inc. and has quietly evolved into an ambitious global player that serves the SMB and enterprise markets with cloud applications. The company offers a suite of more than 50 business, collaboration and productivity applications. These include applications for CRM, project management, finance, human resource management, analytics and support. 

The company is headquartered in Chennai, India. It has eleven offices in India, five in the United States and has offices in Brazil, Canada, Mexico, Australia, Japan, Singapore, China, Egypt, South Africa, United Arab Emirates and the Netherlands. Offices in France and Germany are in preparation. Zoho has more than 10,000employees as of mid-2021. It is present in 180 countries with more than 70 million users.

Zoho is led by its co-founder and CEO Sridhar Vembu. Being a privately held company, Zoho is not obliged to, and does not publish revenue or profit numbers. However, the company indicates a track record of profitable growth that is well in the double digits.

The company manages its growth organically, i.e. without acquisitions. All applications are built by Zoho, using one single hard- and software stack. They are deployed and delivered via Zoho owned data centers in the United States, Europe, India, China and Australia. Following this unique approach, the company has built a solid platform with a unified data model that allows it to grow and deliver software at high speed.

Core values of Zoho include corporate self-determination, privacy as a principle and a commitment to delivering high value.

Zoho One

Zoho aspires to deliver the operating system of a business with the goal of driving customers' margins by unifying business operations on one single technology platform. The most important part for delivering this vision is Zoho One. 

Zoho One is Zoho's premier bundle of business applications. Currently, Zoho One consists of 45 applications supporting sales, marketing, email and collaboration, helpdesk and customer support, finance, HR, analytics and business process. Of these, customers have activated on average 21. 

Zoho One can be licensed as an all in one platform but also be part of a journey that starts at first licensing one application, then more and then moving to Zoho One directly or via licensing one of the other suites (such as CRM+, Finance+, or Workplace).

The most used applications in Zoho One are CRM, Analytics, Cliq, Books, SalesIQ and Desk. Zoho analyses show that this is quite consistent across regions. This means that customers use Zoho One to support a broad variety of front office, back-office collaboration and business intelligence processes.

Figure 1: Most used Zoho One applications

Zoho One has currently around 40,000 customers, which makes it Zoho's most popular suite. The largest customer has around 32,000 employees. Customers are distributed worldwide in more than 160 countries, with the highest numbers in the United States and the European Union. 

Organizations that have implemented Zoho One are from a variety of industries, although the top five industries are the high tech, professional services, Real Estate and Construction, Retail, and Banking/Financial Services/Insurance industries.

Analysis

With Zoho One, Zoho offers a comprehensive set of applications that support a major part of the corporate value chain, including supporting processes. The main areas that are only partially covered (via Zoho Inventory) are Procurement and Inbound Logistics, as depicted in the diagram below. These processes, however, are supported by partner solutions that are available on the Zoho Marketplace.

Figure 2: Processes of the corporate value chain that are supported by Zoho One

Zoho One is a set of solid horizontal applications without much industry flavor. Still, it is adopted across a wide range of industries around the globe, which shows the versatility of Zoho One and its underlying development platform. Due to Zoho owning the whole solution stack, the applications are well integrated with each other. This goes beyond process- and data integration. In fact, the applications that are part of Zoho One can be regarded as components of a unified system. They share the same set of underlying core services, like AI, analytics, communication, provisioning and search to name but a few. This set of services is continuously enhanced, with new services being for example the work graph, mobile application management and organizational dictionaries.

Zoho focuses especially on the flexibility and adaptability of its system. Even during development, everything is kept simple and expressed in a uniform and easily understandable style. The solution stack’s design allows for rapid creation or translation of business applications for most vertical industries, as well as adaptability to individual customer requirements using no code, low code and high code environments. 

With Canvas, Zoho opened the solution to detailed visual adoption of roles, customer corporate identity or templates, e.g. for industries. In combination with Zoho Creator, Zoho Catalyst, Zoho Flow and the Zoho Marketplace this creates opportunities for partners and developers by offering a complete develop - extend -integrate - deploy platform. At this time, Canvas supports only Zoho CRM.

Zoho One’s pricing model has worked well for companies that are growing and want to go beyond CRM applications, with more than 50 other applications available and more on the way. With Zoho One, companies can scale easily and quickly. Zoho also benefits from the significant synergies and savings in organic marketing in highly competitive markets. 

The availability of a wide range of APIs as well as more than 2,500 integrations, either natively or via tools like Zapier, Integromat or PieSync, enables Zoho One to become an integral part of a corporate business application landscape. Customers are using parts of Zoho One in combination with parts of or the complete Google Workplace (GSuite), Netsuite and various marketing applications. 

Currently there are around 1,000 extensions or custom apps solutions available on the Zoho Marketplace (https://marketplace.zoho.com/home), but the number is steadily increasing.

Zia, the Zoho Intelligent Assistant, is a platform tool that provides AI/machine learning driven services throughout Zoho One. Zia not only provides intelligent data enrichment services but also powers predictive scenarios. In addition, Zia is a core part of Zoho's context-aware, natural language enterprise search. The enterprise search is already pre-integrated with external applications like box, Dropbox, Slack, Salesforce and others. In combination with its ticketing system and knowledge management capabilities, this could be a game changer in the industry. Many companies are looking for a service that answers questions across a wide variety of sources and topics.

Further, with its integration into more than 100 call center solutions, in combination with the collaboration suite, Zoho PhoneBridge and Zoho Voice (not part of Zoho One), Zoho, from a capability point of view, is already now on the forefront of the converging call center and unified communications markets, without saying so.

Zoho One represents an interesting path for Zoho to take, the path to disassembling applications into services which can be recombined as needed. Thought to an end, every business object like "account," "quotation" or "customer visit" is a service that any other application can use. These services are recombined with no code/low code (workflow engines) and high code tools to create solutions as needed.

SWOT

Strengths

• Deep integration between applications that cover a wide range of corporate value chain including an e-commerce solution that offers visibility into inventory and financials
• Built-in data cleansing through the data preparation capabilities of the Zoho BI and Analytics platform
• Independent applications reduce entry barriers and allow multiple entry paths into Zoho One
• Work graph, which enables context aware communications and search based on an understanding of the strength of interactions between people
• Context aware conversational search
• Transparent and attractive  pricing without hidden fees
• Natural Language Processing powered enterprise search and analytics 

Weaknesses

• Usability is not always consistent across the various applications and devices 
• Missing industry solutions
• No CPQ solution in their own stack

Opportunities

• Capitalizing on industry solutions and technology trends, leveraging the deep and wide solution stack, full development platform and the Zoho Marketplace together with technology and implementation partners
• Hybrid work solutions extending Zoho Workplace like Zoho Backstage, but also Zoho Learn, Zoho Lens and further solutions

Threats

• Competitors' acquisition strategies might out-compete Zoho's organic growth strategy by enabling faster delivery of new functionality
• The partner management organization might be lacking local staffing to support strong growth in strategic regions