Podcast Review: Why platforms will drive the next generation of systems of engagement

Beagle Research analyst and author Denis Pombriant joined the MSDW Podcast to discuss his recent article on both historical and future of CRM trends. Cloud business models are evolving in fascinating ways, with platform giants vying for the trust of buyers and partners. Buyers of multi-cloud and vertically focused solutions with tougher data requirements are driving the market toward what Pombriant believes is a new phase of utility-like consolidation. If it works out well, this trend ought to leave open a range of interesting opportunities for agile vendors looking to address market segments with more tailored offerings.

Toward platforms, commoditization and systems of engagement

Around 2000, Pombriant left his role at a larger research firm and began work as an independent analyst researching CRM systems and early versions of what is now known ubiquitously as cloud computing:

Back in Y2K or 2001, there was something called hosted computing, a client server model pushed through a virtual private network. It was inefficient and expensive and never really gained traction. Every key click needed to go to the server and be echoed back onto the screen. Early vendors discovered they couldn't fit enough users onto a server to be profitable. Stateless computing became the dominant model and cloud took off after that. A lot of it can be traced to the Amazon model for servicing millions of customers at a time and getting their orders right. Being able to put the right stuff on your screen is a major accomplishment.

As SaaS apps have matured, the strategic importance of the underlying platforms has become more obvious due to the consumption of other services like analytics, machine learning, and integration. With the platform, everything falls into place, Pombriant says.

Platform has sort of become the religion of the enterprise and SMB software industry. Platform isn't necessarily the thing everyone talks about like chatbots and machine learning, but platform is what really will drive things over the next five to 10 years.

Major vendors like Microsoft, Oracle, Salesforce, and SAP are heading down an increasingly customizable, platform-based path, he believes.

Microsoft understands the importance of giving people the ability to build apps in house and giving partners the ability to build fine-grained apps for vertical markets. The difference between then and now is that apps used to be systems of record, but we now have tools to build systems of engagement. They're not going to replace systems of record, but layer on top of them and use the data to create information. The [first party] CRM apps that we see today are really becoming demonstration projects for the utility of the platform. "Hey look we did this with the platform, what can you do?"

Banking, finance, insurance, manufacturing and healthcare [are just a few examples of industry verticals]. Business agility is becoming the principal virtue in enterprise software and you get that by having flexible software for building and changing for your business processes to pursue really short-term temporal opportunities in your chosen market.

Pursuing data – and applying it

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