I once thought collecting what I called "Americanisms" - unique phrases that come from deep within our culture - might be a fun undertaking. It seemed as though the business world was full of them, and it would be easy to compile some into a dictionary or encyclopedia-like book - the kind your aunt Muriel might give you for the holidays. I got a good start with phrases such as "They've been rode hard and put up wet" and others I can no longer remember. But with the advent of the Internet, ideas like this became the fodder of Web sites. The other day, I was exploring one of them, World Wide Words, in search of the origins of another favorite, "The catbird seat."
The catbird seat is one of those phrases that you might instinctively know from American vernacular. It means sitting pretty, having an advantageous position. In the middle of the 20th century, hall of fame baseball announcer Red Barber would apply it to a batter with a count of three balls and no strikes - the upper hand. But finding its origin might be problematic, and what might this have to do with CRM anyway? Well maybe a lot, read on.
There really is a species called the catbird, and it's a relative of the mockingbird. Like its cousin, the catbird is a great imitator and one of its specialties is the feline meow. The catbird has a seemingly innate sense of its own superiority, possibly because it can intimidate its competitors by imitating a predator, and when it stakes its claim to territory, the catbird instinctively selects the highest perch available from which to issue its song. It is that perch that is signified as the catbird seat.
As I look at the CRM market in early 2006, I see a vastly changed landscape than was evident a year ago. At the beginning of 2005, PeopleSoft was still fighting its hostile takeover by Oracle, and Siebel was an independent entity, leading the CRM market. There were others in the hunt too, most notably SAP and salesforce.com as well as a burgeoning group of vendors building the on-demand space.
A year ago Siebel was the CRM leader with SAP nipping at its heels. Critics (myself included), loved to point out SAP's funny accounting methods that brought it into a virtual tie for market share leadership in the conventional space. And Salesforce.com led the on-demand market with a crusade that at times looked more Ken Kesey-esque than high tech.
A year later everything has changed. Having gobbled PeopleSoft and on the verge of ingesting Siebel, Oracle dominates many of the leadership categories by the numbers. But the numbers don't tell the whole story. It is SAP and Salesforce.com that have market momentum, and each is a more likely successor to the catbird seat than the Oracle alliance. The two, though vastly different in product lines and outlooks, have more in common than might first appear.
In my mind, the lesson of the moment - who sits in the catbird seat today - has a lot to do with the financial paths each took to their present situations. Recall the Internet bubble: a time that is receding from us now but which still has all of the resonance of the big bang, when companies were forming and reforming. IPOs were common and stock valuations were so high that companies were using their certificates like cash to buy one another.
Some companies, such as Siebel, grew by acquisition - buying up competitors and complementary parts as fast as they could, cementing them together to build bigger and bigger product suites that customers found difficult to deploy and maintain. If early vendors gave the world a taste of the power and utility of CRM, they also drove demand for better, faster and, above all, cheaper solutions that later entrants would deliver.
What's interesting to me right now is that most of the vendors that grew like mushrooms after a summer rain have been sidelined by financial pressures - either leaving the field by bowing to the verdicts of the market or obeying the imperatives of finance by being acquired. Today's market leaders are SAP, a company with a strong cultural bias toward building what it sells, and salesforce.com, which, to my knowledge, has never acquired another company. In the mergers and acquisitions arena, salesforce.com has blazed its own trail by making complementary product integration part and parcel of its value proposition. Why spend the money buying and integrating when partners are willing to do the work themselves?
For the moment, it appears that the companies in the catbird seat got there, dare we say it, the old fashioned way. They listened to the market, built what customers told them they needed, and sold what they had. It's an instructive message as new companies form around interesting ideas and venture firms try to determine whom to back.
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