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Magic Quadrant for Sales Force Automation

Magic Quadrant for Sales Force Automation banner
Magic Quadrant for Sales Force Automation banner

Summary

The sales force automation market grew 12.8% in 2016, to $5.6 billion. SFA vendors have made a significant move toward embedded predictive analytics. Our evaluation of 16 products from 15 vendors will help application leaders choose the solution that best meets their sales execution requirements.


 

Strategic Planning Assumption

By 2020, 30% of all B2B companies will employ artificial intelligence to augment at least one of their primary sales processes.

 

Market Definition/Description

Sales force automation (SFA) applications automate the sales activities, processes and administrative responsibilities for an organization’s sales professionals.

SFA is a foundational technology that provides core sales execution capabilities: account, contact and opportunity management, sales forecasting, reports and dashboards, and mobile applications.

Additional noncore capabilities that are often part of SFA offerings include lead management, sales enablement (content management and guided selling), quote management, partner relationship management (PRM) and analytics. Because these noncore capabilities are so common to B2B and B2C selling, Gartner also evaluates vendors on these capabilities.

Gartner continues to see product innovation from SFA vendors in relation to opportunity predictive analytics, business process modeling functionality and vertical-specific functionality. These are not yet core SFA functionalities, but they are likely to be central to SFA products in the next two to five years.

 

Magic Quadrant

Figure 1.Magic Quadrant for Sales Force Automation
Magic Quadrant for Sales Force Automation

Source: Gartner (July 2017)

 

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor’s appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

  • Xiaoshouyi.

Dropped

  • Bullhorn: This vendor does not appear in this Magic Quadrant because it no longer sells to multiple industries.

  • Microsoft (Dynamics CRM): In this Magic Quadrant, Gartner evaluates Microsoft Dynamics 365 for Sales as a single product offering, whereas previously we evaluated Microsoft’s SaaS and on-premises products as distinct products. We have therefore combined all feedback for both products into a single Microsoft Dynamics 365 for Sales evaluation.

  • Sage: This vendor does not appear in this Magic Quadrant because it is no longer actively marketing its SFA product.

  • Tour de Force: This vendor does not appear in this Magic Quadrant because it did not meet several of the inclusion criteria.

 

Inclusion and Exclusion Criteria

To qualify for inclusion in this Magic Quadrant, vendors had to have:

  • A technology solution that automates core selling processes, including but not limited to account, contact, opportunity and sales activity management.

  • A solution that provides opportunity pipeline reporting and sales forecasting.

  • SFA customers in at least three industries, with at least 20 active customers across those industries.

  • Revenue from SFA software and services of at least $5.5 million during the calendar year 2016.

  • Made multiple releases with significant functional improvements during the 12 months from April 2016 to March 2017; a new or acquired offering from an established vendor in this market was also considered, if Gartner established that offering was being sold to customers.

  • At least five new, named customers (not unique new contracts sold to an existing client) that had actively deployed its SFA functionality during the 12 months from April 2016 to March 2017.

  • Demonstrated corporate business viability through business performance, new customer adoption and strategic partnerships over multiple years.

  • An SFA system that supports B2B inside, field, and indirect/partner sales models, and/or supports B2C long-cycle sales processes via direct and indirect sales.

 

Evaluation Criteria

Ability to Execute

Different sales organizations require different levels of depth and complexity in terms of capabilities. Vendors that support a wide range of complexity have greater market potential and are rated accordingly. This is a cross-industry Magic Quadrant; therefore, the evaluation of a provider’s offering is focused on the ability to serve several broad industry sectors, not to provide industry-specific solutions.

In many cases, an SFA application will combine several functional components, some of which require third-party vendors. A key evaluation criterion is how well the SFA vendor’s application integrates with third-party products and customer data sources. This is measured primarily by the number and complexity of data and application integrations, as demonstrated by live customer deployments. Vendors that have fostered an ecosystem of value-added application suppliers and partners will score well in this regard.

Product or Service:The overall vendor product/service functionality score is developed by evaluating specific SFA functionality, mobile access and architecture (in terms of, for example, openness, flexibility, usability and workflow), and sales reporting and analytics. The overall vendor product/service functionality score is developed by evaluating specific SFA functionality, mobile access and architecture (for example, openness, flexibility, usability and workflow), and sales reporting and analytics.

Opportunity management capabilities are weighted more heavily than other SFA application building blocks. This reflects the demand for SFA functionality by sales organizations. To score well, the vendor must have a stable product development team for each product module that it sells. Increased emphasis is also given to the value that SFA applications provide directly to salespeople.

Overall Viability:Key aspects of this criterion are the vendor’s ability to ensure the continued vitality of its product, including support for current and future releases, as well as a clear roadmap for the next three years. The vendor must have sufficient cash “on hand” and consistent revenue growth during four quarters to fund employee “burn rates” and to generate profits. Each vendor is also evaluated on its commitment and ability to generate revenue and profits specifically in the SFA market.

Sales Execution/Pricing:The organization’s capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support and the overall effectiveness of the sales channel. The vendor must provide global sales and distribution coverage that aligns with its marketing messages. The provider must have specific experience of, and success in, selling SFA applications to sales buying centers (that is, vice presidents of sales or sales operations).

Market Responsiveness/Record:We evaluate the vendor’s ability to respond, change direction and be flexible to evolving customer needs and market dynamics. This criterion also considers the vendor’s history of responsiveness.

Marketing Execution:This refers to the clarity, quality, creativity and efficacy of programs designed to deliver the vendor’s message to influence the market, promote its brand and business, increase awareness of its products, and establish a positive identification of the product, brand or vendor by buyers. This mind share can be driven by a combination of publicity, promotions, thought leadership, word of mouth and sales activities.

Customer Experience:Feedback from active customers on generally available releases during the period April 2016 to March 2017 is an important consideration. Sources of feedback include vendor-identified reference customers, Gartner client inquiries and other customer-facing interactions, such as those at Gartner conferences. Customers’ experiences are evaluated based on the vendor’s ability to help customers achieve business value, as well as sustained user adoption, quality implementation and ongoing support.

Operations:This criterion evaluates the vendor’s ability to meet its goals and commitments. Factors include the quality of the organizational structure — skills, experience, programs, systems and other vehicles that enable the vendor to operate effectively and efficiently on an ongoing basis. For SaaS offerings, operations also includes the vendor’s ability to manage operational infrastructure requirements in order to meet client demand.

Table 1.
 
Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product or Service

High

Overall Viability

Medium

Sales Execution/Pricing

Medium

Market Responsiveness/Record

High

Marketing Execution

Medium

Customer Experience

High

Operations

Medium

Source: Gartner (July 2017)

Completeness of Vision

Marketing Understanding:An evaluation of the vendor’s ability to understand the business issues facing vice presidents of sales, and to demonstrate and explain how SFA applications can be applied to improve the overall sales effectiveness and performance of a prospective customer’s sales organization.

Marketing Strategy:A clear, differentiated marketing strategy has a set of messages that appeals to selling organizations and is consistently communicated throughout the organization, and externalized through the website, customer programs and positioning statements. Vendors are evaluated on how their solutions appeal to selling organizations in multiple industries. If a vendor derives a significant percentage of its revenue from recurring revenue-based products, it must also have a customer retention strategy.

Sales Strategy:An evaluation of how well the vendor’s strategy for selling SFA software uses an appropriate network of direct and indirect sales, marketing, service and communications affiliates to extend the scope and depth of its market reach, skills, expertise, technologies, services and customer base. Key elements of sales strategy include a sales and distribution plan, internal investment priority and timing, and partner alliances.

Offering (Product) Strategy:Vendors should demonstrate a vision for new application functionality across the breadth and depth of product capabilities; this is critical for meeting the needs of a maturing market. Subcriteria cover the vendor’s vision for opportunity management; sales effectiveness capabilities, such as guided selling, sales configuration, quote management and content management; access and architecture (such as its openness, flexibility, extensibility and usability); and sales reporting and analytics. Also considered is the vendor’s vision for industry-specific products. The product strategy can be a combination of organic development, acquisitions and/or ecosystems. It can also include industry-specific offerings. However, for ecosystems, close attention is paid to the quality and support of third-party partners.

Business Model:Vendors need to have clear business plans for how they will succeed in the SFA market. These plans should include appropriate levels of investment to achieve profitability and healthy revenue growth over a three-to-five-year period. Sales channel and partnership strategies are important components.

Innovation:To score well, vendors must show continued investment to improve their core SFA capabilities. They must also be growing in new areas, such as sales execution improvement, analytics, social collaboration and SaaS; or devices, such as tablets and smartphones; or new technology directions, such as those arising from the Nexus of Forces.

Geographic Strategy:An evaluation of the vendor’s strategy to direct resources, skills and offerings to meet the specific needs of regions other than that in which its corporate headquarters is located, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market.

Table 2.
 
Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

Medium

Marketing Strategy

Medium

Sales Strategy

Low

Offering (Product) Strategy

High

Business Model

Medium

Vertical/Industry Strategy

Not Rated

Innovation

High

Geographic Strategy

Medium

Source: Gartner (July 2017)

Quadrant Descriptions

Leaders

Leaders have the ability to execute their vision through products, services and demonstrated, solid business results in the form of revenue and earnings. Leaders have significant successful customer deployments in North America, EMEA and Asia/Pacific in a wide variety of industries, and with multiple proof points for deployments above 500 users. They demonstrate consistently above-average customer experience satisfaction. Leaders are often the vendors against which other providers in the market measure themselves.

Challengers

Challengers are often larger than most (but not all) Niche Players, and demonstrate a higher volume of new business for SFA. They have the size to compete worldwide; however, in some cases, they may not be able to execute equally well in all geographies. They often return strong customer experience satisfaction scores. They understand the evolving needs of a sales organization, yet may not lead customers into new functional areas with a strong functional vision. Challengers tend to have a good technology vision for architecture and other IT organizational considerations, but have not won over the top sales executives.

Visionaries

Visionaries are ahead of most potential competitors in delivering innovative products and/or delivery models. They anticipate emerging and changing sales needs and move the market into fresh areas. They have a strong potential to influence the direction of the SFA market, but are limited in terms of execution and/or track record.

Niche Players

Niche Players offer products for SFA functionality, but may lack some functional components; they may not show the ability to consistently handle deployments of more than 500 users across multiple geographies, or they may lack strong business execution in the SFA market. These vendors may offer complete portfolios for a specific industry, but face challenges in one or more areas necessary to support cross-industry requirements, such as complex forecasting and sales effectiveness. They may have an inconsistent implementation track record, or they may lack the ability to support the requirements of large enterprises. Even so, Niche Players often offer the best solutions for the needs of particular sales organizations, considering the price/value ratio of their solutions.

 

Context

All the vendors in this Magic Quadrant have customers that are using their products and services successfully. However, they are not the only vendors in this market. There are more than 70 vendors in this market, and some regional and/or vertical-industry SFA specialists did not meet the inclusion criteria.

This Magic Quadrant represents a wide cross-section of vendors, including those that offer different delivery models (such as on-premises, SaaS and hybrid), and differing levels of functional breadth and sophistication. To give a cross-section of the market’s vendors and offerings that is as accurate as possible, we include some vendors that have comparatively low annual revenue and comparatively small installed bases.

Consistent with the concept of core SFA capabilities as described in the Market Definition/Description section, this Magic Quadrant places particular emphasis on vendors’ core SFA capabilities. However, for the purpose of building as complete a picture as possible, we also evaluate their noncore SFA capabilities, such as content management, lead management and PRM.

Separately from this Magic Quadrant, Gartner covers a range of add-on sales automation capabilities that are relevant to sales execution, including sales enablement, business information services for sales, CPQ suites, and sales performance management. SFA vendors are increasingly expanding their offerings by adding these capabilities to their SFA products. Please see the Recommended Reading section for some documents that provide more detail about these solutions.

By collecting and analyzing a wide range of sales automation capabilities, Gartner has developed a broad and deep understanding of vendors’ solutions. This also means that Gartner has a strong understanding of how the full range of sales automation technologies applies to a variety of industries and selling practices. Software buyers should note, however, that SFA requirements are unique to each B2B sales organization, based on the maturity and culture of the organization in terms of its use of technology, the sophistication of its sales practices and the expected return on investment.

SFA has distinct implications for different types of sales organization:

  • Product-driven, transactional sales organizations, such as those engaged in short-cycle B2B sales, will value basic lead and opportunity management capabilities to reduce sales cycles and improve sales management visibility.

  • Product and service organizations selling enterprisewide deals, such as long-cycle B2B sales organizations, will value account management and forecasting capabilities. These organizations often also value PRM, CPQ and sales enablement tools, such as those for sales content management. They often tie together proposals, bids, configurations and quotes with authorizations and order-capture systems. Organizations operating in this space require granular forecasting and pipeline management features.

  • Organizations engaged in relationship selling or that have indirect sales processes require SFA tools to manage their customer and prospect data, but they also require sales enablement tools for content distribution and sales activity capture.

In this Magic Quadrant, Gartner refers to vendors’ target customer segments. We define these segments as follows:

  • Small business: fewer than 50 sales users

  • Midsize business: 50 to 500 sales users

  • Large businesses: 500 to 1,000 sales users

  • Enterprises: more than 1,000 sales users

Whichever provider you are considering, ask yourself the following question: “Will this vendor help my sales organization sell more effectively?” In many cases, a sales organization must evaluate not just a vendor’s suite of products, but also the ecosystem of providers that can fill functional gaps for capabilities the considered vendor does not offer.

A good vendor selection strategy assesses providers that support data requirements, access modes and functionality for each sales role. It is informed by a good understanding of how sales processes dictate the functional components that best satisfy organizational and individual sales requirements.

To help clients make the right choice of vendor and product, Gartner is publishing the inaugural “Critical Capabilities for Sales Force Automation.” In it, Gartner scores each vendors’ core SFA capabilities against five common sales use cases: long-cycle B2B sales, short-cycle B2B sales, short-cycle B2C sales, long-cycle B2C sales, and indirect/relationship sales.

Implementation methods for SFA vary, ranging from self-implementation to global system integrator (SI)-led efforts for comprehensive global implementations involving multiple business units. Companies that have low to moderate sales process complexity and that do not need to integrate with back-end systems can self-implement some of the systems reviewed here. Companies with complex processes that span multiple departments and require data integration commonly employ third-party SIs. In cases with exceptional process complexity, it is common to hire the vendor’s professional services group for the implementation. As a general rule, regardless of the complexity of your sales process, Gartner recommends that you employ an SI if you are new to the vendor’s technology.

Use this Magic Quadrant to aid your evaluations, but explore the market further to assess the capacity of each vendor to address your unique business problems and technical concerns. Your shortlist should be determined by the complexity and scale of your requirements. This Magic Quadrant is not designed to be the sole tool for creating a vendor shortlist; use it as part of your due diligence, in conjunction with discussions with Gartner analysts.

Magic Quadrants are snapshots in time. To be impartial and to complete our analysis, we stop our data collection efforts at a consistent time across the board. In this case, the cutoff date was 1 March 2017. Although this means that some products’ capabilities may have changed since then, the same is true for all vendors evaluated.

 

Market Overview

In 2016, the SFA market grew by 12.8%, to $5.6 billion, with almost all the growth relating to cloud-based offerings.

Almost 69% of sales were of SaaS, and 64% of revenue was generated in North America. Almost 87% of worldwide sales in 2016 was concentrated in 10 countries.

Gartner forecasts that the SFA market will grow to more than $9.4 billion by 2019, with SaaS-based solutions continuing to take a larger share (see “Market Share Analysis: Customer Relationship Management Software, Worldwide, 2015”).

The overall CRM sales segment shows substantial innovation beneath its top-line growth of 13.4% in 2016. This compares with an application software growth rate of 9.2%, and 5.3% growth for all software. Although SFA is a mature sector, innovation in SFA technologies, with improvements in ease of use, better mobile use cases and early applications of artificial intelligence, have driven growth through deeper penetration and larger deals.

This innovation and growth has extended to the sales enablement sector — a range of add-on tools and functions designed to make the sales rep’s life more efficient, organized and effective within an SFA environment. Gartner’s market share figures estimate the growth in the sales enablement segment in 2016 to be 15.5% and the segment’s size to be $445 million, which represents 5.6% of the overall sales sector. Sales enablement includes third-party solutions that cover the entire life cycle of sales reps — from recruitment and selection to onboarding, coaching and training. They make reps more efficient in sales situations, with just-in-time training, curated account intelligence, recommended sales content and optimized pricing solutions. The sales enablement segment is receiving a lot of attention, startup activity and venture capital.

As part of the Magic Quadrant analysis process, Gartner collected input, via a survey, from over 130 vendor reference customers who use the SFA solutions reviewed in this Magic Quadrant. Insights we gained from this survey include the following:

  • Sales automation implementations are a considerable investment. Respondents spent an average of $276,440 each on SFA solutions in their most recent fiscal year, compared with $153,970 on non-SFA sales applications.

  • The top-three reasons for purchasing SFA solutions:

    • To improve customer relations/service (69% of respondents).

    • To create operational efficiencies (68%).

    • To improve business process outcomes (67%; multiple responses were allowed).

  • The top-three criteria for selecting an SFA solution:

    • Product functionality and performance (67% of respondents).

    • Competitive costs (60%).

    • Architectural scalability (49%).

  • Eighty-nine percent of the surveyed respondents were “very satisfied” or “completely satisfied” with their SFA solution. This, however, is a drop of six points from last year’s survey.

Based on recent innovations and product improvements on vendors’ roadmaps, Gartner believes that the following product considerations will shape the SFA market during the next three years:

  • Predictive analytics for improving sales forecasting, lead conversion, relationship intelligence, and “white space” opportunities.

  • Embedded AI.

  • Sales enablement tools that support better sales execution.

  • Data-driven selling, whereby companies apply big data analytical techniques to their sales programs, to uncover new insights about sales execution best practices.

  • Model-driven SFA applications, using business process modeling techniques and methods that are already well-established in the fields of B2C selling and customer service.

The first two considerations will have the biggest impact in the short term. Most SFA vendors now offer native, embedded predictive analytics for at least one of the capabilities listed above. This development is important because SFA tools have traditionally been systems of record, suitable for capturing sales activity, looking up contact details or managing sales forecasts. They have rarely been good at improving sales execution, at helping representatives close more deals. Predictive analytics addresses the two most common questions of representatives:

  • What should I do next with this deal?

  • How likely am I to close this deal?

Predictive analytics, when combined with emerging (but not yet mature) prescriptive analytic functions, will go a long way toward answering these questions. They are predicated on self-adjusting machine-learning models that improve the quality of insights, based on continuous collection and analysis of new sales process inputs.

Artificial intelligence has not yet achieved wide adoption, but there are many relevant new technologies on the market. Tools that automate sales activity entry, or that send emails on behalf of representatives, are already available from third-party vendors. For more examples of the use of artificial intelligence in sales environments, see “Cool Vendors in CRM Sales, 2017.” Based on the roadmaps of SFA vendors that Gartner has reviewed, it will only be another two or three years before artificial intelligence is common in SFA offerings.

Sales enablement will be an important factor in this market in the midterm. Gartner regularly speaks with companies that are looking to improve sales execution. Sales enablement processes — representative training, managerial coaching and sales content distribution — are an essential part of this objective. However, Gartner finds that sales enablement is not a significant part of SFA offerings, regardless of vendor. Nor is it typically part of vendors’ roadmaps. This means that many organizations must continue to consider additional tools to fulfill all their sales execution needs.

 

Evidence

As part of the Magic Quadrant process, Gartner analysts collected input from over 130 reference customers (who had been identified by the vendors) using a formal online survey, as well as via inquiries from Gartner clients evaluating the vendors’ products. Gartner analysts also used data drawn from the Gartner Peer Insights portal for the SFA market. In addition, they interviewed vendors and attended product demonstrations.

 

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability:Viability includes an assessment of the overall organization’s financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization’s portfolio of products.

Sales Execution/Pricing:The vendor’s capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record:Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor’s history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization’s message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This “mind share” can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience:Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations:The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding:Ability of the vendor to understand buyers’ wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers’ wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy:The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy:The vendor’s approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model:The soundness and logic of the vendor’s underlying business proposition.

Vertical/Industry Strategy: The vendor’s strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor’s strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the “home” or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. [BMI]