One surefire way to insult a software vendor is to say their product is not suitable for high-end applications. Why this is so offensive is something of a mystery: Just as all children cannot be above average, except in Garrison Keillor's Lake Wobegon, all software cannot be high-end. Yet the usual vendor response to such an observation is sputtering indignation, followed by a pugnacious challenge to list the required features. The vendor's hope is that either you will not be able to produce a list or that a point-by-point rebuttal will show the system can indeed do everything needed. If neither hope is fulfilled, the vendor then points to its list of big-name clients, with the implication that if the system is good enough for them, it must be high-end. However, the vendor is rarely able or willing to discuss how these companies actually use the software. Thus, the client list by itself proves nothing at all.
In other words, the only substantive part of the discussion revolves around requirements. Of course, requirements depend on the application. A high-end call center has different requirements than a high-end Web server. In the realm of marketing software, one particularly interesting niche is high-end campaign management. This refers to outbound promotions with many cells for example, more than 100 defined through complex segmentation schemes. These promotions are usually executed through direct mail but sometimes use telephone or e-mail. Users are classic direct marketers such as catalog merchants, financial services providers and telecommunications firms.
The first interesting thing about this niche is its size: very small. While just about every marketer needs some form of campaign management, only a few companies have the scale and sophistication to execute high-end campaigns. The worldwide market is probably well under 1,000 installations. In the twenty-year history of such systems, the most successful vendors have each topped out at approximately 100 clients before losing ground to a next- generation competitor.
With so little potential, it is not clear that a major software firm can justify the cost of developing the features needed to serve the most demanding campaign management customers. Indeed, the market has traditionally been dominated by small software firms that could make a living on low volume.
However, larger firms continue to enter the field. Some major companies with offerings they position as high-end campaign managers include Siebel Systems; E.piphany; Teradata, a division of NCR; and SAS Institute. In most cases, the main motivation seems to be supplementing sales of the firm's primary products rather than selling campaign management by itself. Prestige is also involved rather like auto companies which buff their images with racing programs, even though most customers never drive at anything approaching race-track speeds.
The second interesting thing about this niche is that its boundaries are becoming less distinct. Five years ago, what most vendors called "campaign managers" were feeble creatures that could select one segment at a time and could generate only the simplest queries. A single question Can the system generate a random sample? eliminated most pretenders.
Today even lowly contact managers support multi-segment selects and complex queries. This doesn't make them suitable for high-end campaign management, but it does mean you have to work harder to understand why they are not.
The high-end niche also faces encroachment from other directions. Real-time interaction management systems, which conduct multistep dialogues with individual customers, have many of the same features as a high-end campaign manager. Indeed, these systems sometimes run traditional outbound campaigns, but the architectural differences required to optimize for real time rather than batch processing make interaction managers a different species of software.
Finally, the features that define a high-end campaign manager are themselves continuing to evolve. Today nearly every high-end system can generate personalized e-mail and offers some form of tightly integrated statistical modeling. Both features were much less common even one year ago. Additional capabilities, including project management, personalized reporting portals and company-wide promotion calendars, also seem on their way to becoming standard. Statistical optimization and simulation are on a more distant horizon but getting closer.
Thus, what we have here is a small, blurry and moving target. No wonder defining a high-end campaign manager is difficult. However, next month we'll give it a try.
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