History and Milestones of CRM

As we have promised in our last article, CRM has undergone an evolution of its own that was closely coupled with the evolution of information technology. In this article we have condensed the story into few paragraphs and a table that summarizes the main milestones.

CRM technology has evolved from a range of stand-alone technologies including those mentioned in previous articles - call centers, sales force automation systems and customer information files (CIF), some of them dating back to 70s of last century. In late 1980s some companies realized that they could consolidate these disparate technologies and especially insurance companies and banks realized the great marketing potential in the customer data they had acquired. Call centers started to do outbound calls such as up-selling customers and the customer started to be recognized as a single entity across all customer‑facing departments, leading to the idea of a single view of customer.

Since customers got quickly used to CRM care their expectations increased and besides early adopter industries such as banks and telecommunications companies, CRM has spread to utilities, consumer goods and health care. The ultimate goal became multichannel CRM, whereby customer contact channels and service center were consolidated into a single view of the customer, across all communication media. In the end, customers were expecting a continuous and consistent dialogue with a company, not caring about systems and departments within.



Typical CRM architecture was based on back office systems, which were integrated with database tier (analytics database, CRM metadata, and transactional database), application server tier (application and web servers), and user interface tier. This architecture was originally implemented on-premise into client/server model, which meant that companies had to invest into their own IT staff, hardware and software, servers, and manage upgrades. However, there has been a breakthrough with the introduction of Web CRM also known as hosted, on-demand, SaaS or cloud computing CRM, which delivers CRM across the internet cutting out company need for software, hardware or IT staff. This is the area covered by start2cloud and it’s sales and marketing section.

The following table sums up all of the important events and milestones in the history of CRM applications and CRM market. It is possible to say that the breakthrough of SaaS started in 1999, when Salesforce.com (NYSE:CRM) entered the market. However as the dot-com bubble burst in 2001 the overall progress in the CRM field has slowed down for a while. First Open Source vendors were founded and cloud CRM and social CRM became the new buzzwords later on.


Year/Period Event
1986 The company Conductor Software was founded in Dallas, TX by Pat Sullivan and Mike Muhney. Their intention was to develop contact management software. They released their first product, ACT! in 1987, which is recognized as the pioneering contact management application. Goldmine and other vendors followed suit with their own releases of contact management systems. (ACT! is still an important player on present CRM market where it can be found under the name Sage ACT!) 
Early 1990s As progress goes on, simple contact management evolves into sales force automation (SFA), and other early innovators enter the market. These new systems automated standard processes for sales professionals to promote efficiency in tracking their leads, opportunities and deals, also called sales pipeline. 
1993 New company Siebel Systems, which is later to become the dominant player, enters the market. Tom Siebel, who used to direct Oracle’s direct marketing division and crated a program to streamline the sales process, is the founder. At first he tried to persuade Oracle CEO to give the internal application for sale but was not successful. Later on Siebel Systems was acquired by Oracle for $5.5bn. 
1995 The term "customer relationship management" (CRM) is coined as the term for front-office applications. Gartner is mostly credited with inventing it but some point to Tom Siebel or IBM. Other terms that were considered are CIS (customer information system), CIM (customer information management) and PIM (personal information manager), but it was CRM that had the upper hand after all. 
1997 ERP vendors start expanding to Front Office applications either via acquisitions or in-house development. 
1998 CRM is moving beyond just being only customer solution but it is turning into a broad based suite of sales, service and marketing functions. Even Siebel was forced by the market competition to acquire Scopus, adding leading call center technologies to Siebel's traditional strength in sales automation solutions.
1998 SAP seriously enters the CRM market by establishing SAP Labs as a unique research and development organization, which would focus solely on emerging application categories like CRM. 
1999 CRM goes mobile after Siebel releases Siebel Sales Handheld, one of the first mobile CRM applications. The following year, other major vendors such as Oracle, SAP and PeopleSoft released their own mobile applications. These early mobile applications were quite limited in functionality.
1999 Salesforce.com enters the scene as the first major player in the Software-as-a-Service (SaaS) CRM space. It launches in small San Francisco apartment, and the “End of Software Revolution” begins. Originally, Salesforce is viewed as a "toy" for smaller businesses but as it evolves and adds functionality and scalability, even the big leaders get disrupted. 
2001 The Dot-com bubble bursts and the CRM market retracts. Oracle experiences a loss in license revenues of over 25%. Even industry titan Siebel Systems is impacted, posting its first quarterly decline in revenue. 
2003 Integration With Legacy Systems picks up and gives vendors advantage. Microsoft enters the CRM market with the acquisition of Navision and release of Dynamics CRM. The main benefit of this product is its strong integration with other Microsoft products like Microsoft Outlook. Later on it will evolve into a strong CRM market player.
2004 SugarCRM Becomes First Major Open Source CRM Vendor. It started its project on Sourceforge.org and was one of the first open-source enterprise applications. The application gained rapid adoption amongst early adopters and price conscious organizations. Later on SugarCRM rolled out a cloud-based version of its product. 
2006 Amazon launched its EC2/S3, which was the very first widely accessible cloud computing infrastructure service. It allows small companies and individuals to rent computers (computer power) on which they can run their own computer applications. 
2006 Siebel is acquired by Oracle.
2007 Salesforce.com launches Force.com, its cloud-based application development environment. The platform enables Salesforce to build an ecosystem of SaaS partners, address gaps in its product line and counter the notion that cloud-based systems are not customizable.
2008 Switch in Focus From Transaction to Interaction is evident with the arrival of social CRM. Companies start their Twitter and Facebook accounts where they interact with customers. Positive feedback is earned and new trend evolves. 
2009 Many companies providing CRM solutions for small businesses are being founded: Base, OnePage CRM or Nutshell. 


In the next article we will tell you something about CRM functionality and what should you look for when selecting a suitable CRM application.



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