"We're gonna knock the competition's socks off," he said. "Our biggest challenge is to get in front of these execs. C-level customers want what we have; they don't want what [competitors] have." McDermott acknowledged that a year ago, SAP's CRM technology lagged behind Siebel's largely because of an inferior user interface. But the company's current mySAP CRM product has an interface that he said is on a par with Siebel's, and SAP's strength in related product segments--such as product life-cycle management, supply-chain management, and partner-relationship management--gives it a significant advantage. "All things being equal, checkmate," McDermott said.
SAP is choosing not to get into on-demand CRM, a market Siebel has attacked aggressively in recent months in response to the success of upstart hosted CRM vendor Salesforce.com. McDermott says SAP's customers want their CRM systems to be integrated with other enterprise apps and linked to business processes--and that it's only a matter of time before hosted CRM customers look at what they've got and determine it's a standalone sales-force-automation tool. He questions whether hosted CRM vendors will be able to retain their customers for long.
In vying to provide CRM to small and midsize companies, SAP faces competition from Microsoft, which has set its sights on the lower end, particularly in delivering customer and sales data to field personnel via wireless devices. But McDermott said that segment of the market is so healthy that there's plenty of room for both companies to succeed.
When it comes to larger enterprise customers, however, SAP plans to differentiate itself by offering industry-specific CRM apps and by framing the benefits of its technology within the context of real-world business scenarios in which tight integration is a necessity. It's an approach McDermott says the other enterprise apps vendors can't match. "If you're PeopleSoft, you're praying for your independence," he said. "If you're Oracle, you're hoping to pick up an apps company. If you're Siebel, you're praying that customers aren't moving away from best-of-breed."