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Salesforce.com joins ACT! in contact management market

Salesforce.com jumped into the market for contact management software today with a lightweight, low-cost option to compete with Sage's recently updated ACT!

September has been a busy month for contact managers. I haven't seen this much activity in years. On September...

1, Sage announced its ACT! 2010 release, and then Salesforce.com dropped a small bomb -- as of today,  they're into the contact manager space too.

Contact management has been a poor cousin to sales force automation (SFA) for many years. Initially, there wasn't much difference between the two. Contact managers were a sort of subset of SFA, which tracks deals, opportunities and leads as well as contacts. For many salespeople, the choice -- if the choice was theirs to make and not the company's -- was largely one of work style. You could organize your work around the stair-step categories or just glom it all together in a contact manager through your own system of user defined fields and notes.

Real SFA also offers the important ability to connect to the broader CRM suite, thus making the information collected by the salesperson more useful and available to the rest of the company.

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Learn how to migrate data off of ACT!

The two announcements this week -- so far -- blur some distinctions and to a degree switch the roles of the leading vendors. Sage has been around for a long time, and ACT! has gone through several ownership changes but has resided with Sage for many years. The ACT! 2010 release is a luxury edition, if you can call it that, which includes integration with Facebook, Twitter, LinkedIn and Plaxo. Sage has also introduced an optional integrated subscription-based e-marketing service, a very nice, new user interface, and fully customizable opportunities to support multiple sales models.

All told, this isn't the stripped-down contact manager that was introduced in the late 1980s, and you might quibble about whether ACT! 2010 is really a contact manager or whether it has crossed the line into SFA territory. I don't know. I am a realist and not too interested in theoretical issues like that.

Interestingly, Sage went out of its way to benchmark the new UI with a keystroke level modeling study conducted by Measuring Usability, LLC. The company claims in its press release that the new UI achieves up to 35% better productivity than competing products. Clearly, the company invested significantly in the new release to send a message to its 2.9 million users, and any competitors, that contact management is a viable category and one that it intends to compete for aggressively.

You could say similar things about Salesforce.com today. The company had been testing a small version of its SFA product for some time, and the announcement of its Contact Manager Edition culminates that process. There are several advantages that Salesforce brings to the table with its approach, including its increasingly popular Cloud Computing Platform and easy migration to full CRM capabilities if and when the customer chooses.

How much upgrade or up-sell business Salesforce generates over time is currently a question without an answer. Contact managers tend to support two very different segments — small users like entrepreneurs who intend to stay small and for whom CRM would be overkill, and large sales groups that are disconnected for many reasons from the rest of the company.

The latter group might include the sales team of a partner in an indirect channel, for example. Such groups rely on internal lead generation and OEM marketing programs that are fairly detached from day-to-day selling. I am not saying this is a good idea -- just reality. The first group, entrepreneurs and similar people, keep their own counsel and may not do much formal marketing, preferring personal relationships. So they don't need CRM.

Nonetheless, the recent announcements by Sage and Salesforce serve to blur many distinctions. ACT! is a high-end contact manager capable these days of taking on some of the less complex SFA functions; and Salesforce, with its upward compatibility, now reaches from the smallest users to the largest. Salesforce may have an advantage in pricing at nine dollars per seat/month, but at that level, the cost differential is much less than a daily latte, and I doubt it will affect many buying decisions.

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