The Battle for CRM Control in the Channel

The good news is that companies of all sizes are starting to recognize the strategic value of customer relationship management (CRM) software. The bad news is that there’s not only a price war on, but a lot of the vendors providing CRM application software are trying to take the business direct via the cloud.

The most obvious CRM provider in the cloud is Salesforce.com, which has made some nascent efforts to create a channel around partner that add value by helping integrate Salesforce.com software with the rest of the business. That’s not quite the same thing as meaningful sharing of application license revenue.

For that very reason this week saw Blytheco, a solution provider focused mainly on ERP application software from Sage Software, add open source CRM software from SugarCRM to its lineup. According to CEO Stephen Blythe, small to medium (SMB) customers are discovering the importance of CRM software in lager numbers. By partnering with SugarCRM, Blytheco can be price competitive with any of the CRM applications, while at the same time enjoying higher margins by working with a company that has a channel-centric sales model.

Blythe says that in the future Blytheco plans to offer a hosted version of SugarCRM in the cloud. But right, there are plenty of customers looking for a company to provide hands-on support for an on premise implementation of a CRM application. Down the road, Bythe says that Blytheco expects to generate additional revenue by integrating CRM and ERP applications as part of an effort to create solutions that unify business processes.

Although CRM has been a mainstream application for 10 years or more, it’s pretty clear that there still plenty of opportunities to sell CRM into the SMB sector. And in a lot of those organizations, the solution provider that controls the IT environment that drives sales can easily wind up owning every other IT process in that organization as well.