Market Share, Tweet Share, and Market Leadership

I’ll admit I’m skeptical about the value of market share. Here are just a few reasons not to put excessive focus on it:

• Various definitions of ”the market” are essentially arbitrary, and share measures will be highly dependent on these definitions.
• What are the important metrics? Revenue? Seats? Server licenses? Different vendors have different licensing models, and when you throw open source into the mix, traditional measures might miss important trends. (If you measure blog platform market share by revenue, Microsoft’s probably the leader, but there are a lot more WordPress blogs out there than SharePoint!)
• Other than as a warning indicator if the vendor you’re using drops to 0% or thereabouts, it probably isn’t a good way to decide on a platform anyway!

Here’s a good article that addresses the “does market share matter?” question in more detail: Chris Selland’s article on market share.  

I think the best reasons to care about market share are that it’s fun and interesting. In that spirit, the numbers in the following table are from the Gartner 2007 CRM market share report. Just for fun, the default sort is alpha by vendor name, but you can click columns 2 or 3 to sort, respectively, by the Gartner estimates of share and revenue growth rate (from 2006 to 2007).

[table id=1 /]

(In column 2, btw, the numbers in parentheses are revenue in thousands of US $, and estimated share.)

To me, these numbers seem reasonable:

• I’d expect SAP and Oracle to have leading shares, and also to be growing their revenues, but slowly enough to be losing share.
• When the “Others” category has a 40% share, that’s a market in flux, possibly ripe for consolidation.
• SalesForce.com and Microsoft are small players overall, but look at those growth rates!  

I’ve never been one to shy about reaching conclusions based on very little evidence, so here’s my impression of the CRM market. In 18 months, Microsoft and SalesForce.com will be contending for share leadership. Apart from both having good platforms, each will get there in its own way:

• Microsoft will leverage the partner channel the way it always has. I’ve seen it the last couple of years in the investments they’ve made in partner training and certifications, and the enthusiasm with which the partner community is adopting the Dynamics CRM platform.  
• SalesForce seems to me more like Apple, with its direct sales model, and the vibrant AppExchange being to SalesForce.com what the App Store is to the iPhone.  

But as I said, I’m skeptical about market share. It’s market leadership that matters. And I want to know what you think. So in that spirit, please fill out this simple two question survey, and we’ll come back to this in 18 months and see how we did.

I used my editorial judgment and added Sugar CRM (www.SugarCRM.com ) and Sage. Another one of those arbitrary things, but it seems reasonable to me that they are two of the most important CRMs in Gartners “Others” category.

Tweet Share

Quickly, though, before you take the survey, consider “Tweet Share” as another alternative. I’ve talked about Twitter in some previous posts, and tried to make the point that the value of Twitter lies in search. For example,

http://search.twitter.com/search.atom?q=”salesforce”=&rpp=50=&tude=:-)

returns the most recent 50 Tweets containing “salesforce.com” with positive “tude” (that is, containing a smiley face). The “atom” qualifier turns the results into an RSS feed that a good developer could do some analytics on. Compare the results you get for that search with what you get for this one:

http://search.twitter.com/search.atom?q=microsoft crm=&rpp=50=&tude=:-)

or for this one:

http://search.twitter.com/search.atom?q=crm online=&rpp=50=&tude=:-)

Now this is about as unscientific as you can get, but my observation from looking at those search results is that Microsoft has some work to do to win the “hearts and minds” of people who care about CRM enough to Tweet about it. To me it seems something like the AppExchange really drives the passion and energy in the SalesForce.com community – I’d love to see Microsoft do something like that!

The First Ever Trick Bag Market Leadership Survey 

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