Only 50% of Fortune 1000 Organizations Will Get a Worthwhile Return From Their Social CRM Initiatives by the End of 2012

Although the adoption of social applications by sales, marketing and customer service departments continues to grow rapidly, Gartner, Inc. said that, by the end of 2012, only 50 percent of Fortune 1000 companies will receive a worthwhile return on investment (ROI) from their social customer relationship management (CRM) initiatives.

During the next two years, the success of social CRM will depend on how well companies and social CRM technology providers can make social CRM projects more than just social objectives by tying them to clear and measurable business objectives. Gartner predicts that by the end of 2012 three-quarters of new social CRM initiatives that receive funding will have a business case incorporating measurable ROI.

Many organizations have established a form of social presence. However, many also lack a clear business performance objective for social CRM, being at early stage in their measurement of its business outcomes.

Gartner analysts said they expect the worldwide market for social CRM software licenses and subscriptions to total $2.1 billion in 2012, up from 850 million in 2011, and that social CRM revenue will represent 10% of the overall CRM market.

Initially, social CRM was mostly a concern of marketing, but it now affects every discipline, from marketing and sales to customer service and support. Social CRM is increasingly important to lead generation and cross-selling and up-selling capabilities, and to other functions that are key to successful sales organizations. Gartner said that business-to-business applications for sales use will have the fastest growth and will account for 30 percent of social CRM spending by 2015, up from 5 percent in 2011.

Today, social CRM vendors differentiate themselves on the basis of functions, analytics, ease of use and superior experience delivered through professional services. Over time, however, they will find it harder to gain an advantage by providing unique core functions. They will need to show quantified business cases and, more importantly, deliver repeatable social CRM processes that are not yet broadly available.

More information on CRM and social media can be found at www.CRMindustry.com

Nearly 60 Percent of Businesses in the US and UK Use Twitter and Facebook for Customer Service

Sword Ciboodle, a provider of customer solutions, and customer experience advisory thinkJar, released the results of a research survey targeting US and UK companies with medium- to large-sized contact centers on their use of social media specifically for customer service. With nearly 400 responses from around the globe, and representation from more than 10 industry verticals, the research helped to reveal insights into how organizations are leveraging social channels for customer service. The analysis covers topics such as the longevity and maturity of the social customer service practice, the integration of social channels with traditional channels, and the decision and selection criteria used to determine social customer service programs.

Survey results indicated that social channels have been strongly embraced, with 59 percent of organizations having adopted Twitter and 60% adopting Facebook, and almost 85 percent of those who have adopted one, have adopted both together. However, while social channels are widely used, participants showed that justification and validation of social customer service is proving to be a challenge. There are a variety of differences in how social channels are used, and factors such as an organization's size, industry and geography also play an important role. Integration of data, as well as finding the right balance between social customer service and more "traditional" channels, is an important part of what companies are wrestling with.

The size of the company is an additional factor in the maturity of its social customer program. For example, 40 percent of respondents in companies with 1000 or more contact center agents say that their social customer service initiatives have been in place for at least two years. In contrast, 53 percent of companies with smaller contact centers say that current programs were implemented within the past year to two years. The reasons behind the move of all companies, regardless of size, to social customer service is customer driven, with 56 percent of respondents implementing social customer service due to customer request, compared with 40 percent that put the programs in place to keep up with competitors.

More information on customer service and social  media can be found at www.CRMindustry.com

High-Tech Companies Face Challenges Keeping Pace With New Cloud-Based Business Models

High-tech companies are struggling to transform their traditional business models of shipping hardware products or packaged software to more complex business models of providing new services based on cloud computing, new Accenture research has found.

The research revealed that many senior leaders lack a clear understanding of how the complexity of these new business models impacts operations in nearly every function of their companies. This disconnect will become increasingly important because most leading technology firms expect to generate revenue growth through five or more business models by 2015, several of which are likely to be based on cloud, the research concluded. These companies typically have two-to-three business models today.

Accenture recommends that companies take these steps to help overcome the challenges:

-- Determine how many business models they have today and which new ones are needed to capitalize on market opportunities;

-- Identify and build distinctive capabilities needed to deliver business in the cloud;

-- Develop a segmented operating model to deliver distinctive service capabilities with the right customer experience and economics; and

-- Implement a governance model for making key resource allocation and other critical decisions.

More information on CRM and Cloud Computing can be found at www.CRMindustry.com.

Research Indicates that Cloud Increases Short Term Costs for Long Term Gains

IDG Enterprise has released the results from the 2012 Cloud Computing survey examining cloud computing implementation, usage, investment plans and vendor requirements.

The survey, completed by more than 1,650 IT and security decision-makers from a range of industries, highlights the growth in cloud computing investments, demonstrating the value cloud computing provides to organizations. Respondents state that 34% of their current IT budget is allocated to cloud computing solutions and more than half (63%) expect to increase spending in the next 12 months. On average, organizations will increase cloud computing spending by 16%.

Key findings include:

-- Sixty-three percent of organizations plan to increase their IT budget allocation for cloud computing initiatives over the next 12 months. On average organizations plan to increase cloud computing spending by 16%.

-- Private cloud deployments are currently where the majority of information is stored in the cloud (24%), and the trend will continue to dominate 18 months from now (33%). Additionally, information is stored in other cloud deployment models including public cloud (10% currently, and 16% 18 months from now), community cloud (9% and 8% respectively) and hybrid cloud (8% and 14% respectively).

-- In addition to investing in cloud computing solutions, 68% of organizations strongly agree/agree that the IT organization had to grow skillsets to keep up with cloud developments.

-- Two-thirds of organizations (66%) believe that cloud computing is a very/somewhat important enabler of business innovation.

-- By a significant margin, the number one barrier to implementing cloud strategies is security (70%), followed by concerns about accessing information (40%) and concerns about information governance (37%).

More information on CRM and Cloud Computing can be found at www.CRMindustry.com

Software and PCs Will Lead the Way in Record-Breaking Year for U.S. Small and Midsize Business IT Spending

Spending on information technology by the 8 million small and medium-sized businesses (SMBs) in the United States will account for approximately one-quarter of overall global SMB IT spending and more than 10% of all IT spending worldwide in 2012. Although U.S. SMB IT spending has more than made up the ground lost during the especially weak years of 2008 and 2009 – and is expected to exceed $138 billion in 2012 -- future levels of investment and spending growth will not be uniform across technology categories. A new study from International Data Corporation (IDC) explores the size and growth of the five major technology sectors in the small (<100 employees) and midsize (100-999) segments – and the critical differences in IT investment between SMBs and large businesses (1000+).

Key findings of this study include the following:

-- The small business segment will spend nearly twice as much as the midsize segment – and more than the entire large enterprise segment – on PCs and peripherals in 2012. The client business is expected to be particularly strong, as small and midsize businesses look to invest in a variety of PC form factors, with particularly high levels of interest in notebooks and media tablets.

-- Small and midsize businesses will spend nearly $50 billion on packaged software in 2012, accounting for more than one-third of total U.S. SMB IT spending; this category will also have the highest compound annual growth rate (CAGR) throughout the forecast period (6.0%).

-- More than one-quarter of total SMB IT spending in 2012 will be allocated to IT services, totaling more than $38 billion. While this level of spending is significant, it also represents a critical departure from the conventions of the large enterprise segment, where IT services account for nearly half of all IT spending. In keeping with the growing importance of IT services as company size increases, the midsize business market for IT services will be more than triple the size of that for small firms throughout the forecast period.

-- Systems and storage will continue to be the slowest-growing IT category in the SMB space. While small and midsize business interest in servers and storage is expected to remain strong, the appeal of virtualization is expected to slow the growth of the server installed base, particularly in the midsize segment.

-- The networking equipment category will account for the smallest share of total SMB IT spending throughout the forecast period. This represents another key difference between the SMB and enterprise segments — while large businesses continue to make significant investments in next-generation datacenters and networking infrastructure, more than one-third of SMBs have not yet deployed networks. Despite increasing interest in networking and network-enabled technologies such as software as a service, cloud resources, and unified communications, SMB spending will remain relatively modest throughout the forecast period.

More information on IT spending can be found at www.CRMindustry.com

Worldwide Software-as-a-Service Revenue to Reach $14.5 Billion in 2012

Worldwide software-as-a-service (SaaS) revenue is forecast to reach $14.5 billion in 2012, a 17.9 percent increase from 2011 revenue of $12.3 billion, according to Gartner, Inc. SaaS-based delivery will experience healthy growth through 2015, when worldwide revenue is projected to reach $22.1 billion.

Although growing interest has been observed in vertical-specific software, the most widespread use is still characterized by horizontal applications with common processes, among distributed virtual workforces and within Web 2.0 activities.

North America, specifically the U.S., currently represents the largest opportunity for SaaS, and it is the most mature of the regional markets. SaaS software revenue is forecast to total $9.1 billion in 2012, up from $7.8 billion in 2011. Consistent with other regions, North America shows the highest SaaS deployments in expense management, financials, email and office suites. Use of Web conferencing is higher in North America than in other regions, in part because of a highly distributed workforce.

In Western Europe, SaaS revenue is forecast to surpass $3.2 billion in 2012, up from $2.7 billion in 2011, while SaaS revenue is Eastern Europe is projected to reach $169.4 million, up from $135.5 million last year. Gartner analysts said SaaS adoption in EMEA is currently running at two speeds.

SaaS revenue in Asia/Pacific is on pace to reach $934.1 million in 2012, up from $730.9 million in 2011. Overall, SaaS adoption in Asia/Pacific has been fragmented. Asia/Pacific (excluding Japan) is a combination of mature markets, such as Australia, New Zealand, Hong Kong, Singapore, South Korea and Taiwan, and emerging markets, including China, India, Malaysia, Thailand, Indonesia, Vietnam and the Philippines.

While the Japanese economy is still struggling and IT budgets are limited, the demand for SaaS solutions is increasing due to their lower implementation costs and faster deployment times. SaaS revenue in Japan is forecast to reach $495.2 million in 2012, up from $427 million in 2011. Gartner forecasts that growth of the SaaS market in Japan through 2015 will be led by CRM and email/groupware, which already have actual demand.

SaaS revenue in Latin America is forecast to total $419.7 million in 2012, up from $331.1 million last year. In Latin America, SaaS has become most popular to deploy in the areas of email, financial management (accounting), sales force automation and customer service, and expense management.

Gartner defines total software revenue as revenue from new licenses, subscriptions, and software maintenance and technical support services that include license sales to update/upgrade an existing license to a new version, telephone support and on-site remedial support. SaaS is primarily a software delivery and management approach that exists in established markets, such as CRM or ERP.

More information on SaaS can be found at www.CRMindustry.com

How Cloud Computing is Generating New Business Opportunities and Fueling Job Growth in the United States

Cloud computing is a powerful catalyst for job creation and has greater potential for employment growth than the Internet did in its early years, according to a new study by the Sand Hill Group, sponsored by SAP America, Inc., a subsidiary of SAP AG.

According to the study, cloud computing is already generating a sizable number of jobs in the U.S. today. Based on numerous trends and indicators, it has the future potential to create very large business opportunities and hundreds of thousands of new jobs in the U.S. The study, titled “Job Growth in the Forecast: How Cloud Computing isGenerating New Business Opportunities and Fueling Job Growth in the UnitedStates,” looked at several ways cloud computing may create jobs and found specifically:

-- Eleven cloud computing companies added 80,000 jobs in the United States in 2010, and the employment growth rate at these organizations was almost five times than that of the high-tech sector overall.

-- Companies selling cloud services are projected to grow revenues by an average of US$20 billion per year for the next five years, which has the potential to generate as many as 472,000 jobs in the U.S. and abroad in the next five years.

-- Venture capital investments in cloud opportunities are projected to be US$30 billion in the next five years, which could add another 213,000 new jobs in the U.S.

-- The economic impact for companies buying cloud services can be even more significant. Cloud computing could save U.S. businesses as much as US$625 billion over five years, much of which could be reinvested to create new business opportunities and additional jobs.

More information on Cloud Computing can be found at www.CRMindustry.com