Cameleon (Software) Might Change its Colors but Not its (Q2O/CPQ) Purpose - Part 2

Part 1 of this blog series talked about my recent reunion with Cameleon Software (formerly Access Commerce) a provider of on-demand and on-premises configure, price, and quote (CPQ)/quote-to-order (Q2O) solutions. Prior to analyzing the recent events at Cameleon, Part 1 first established the need and market drivers for such software solutions.

I then analyzed how Cameleon helps product managers and marketers during the design phase of new product and service offerings, with the focus on being amenable to business (vs. power IT) users in these departments. Part 2 continues with the analyses of how Cameleon helps the sales process (often via multiple channels) and a discussion of recent developments at Cameleon. 

Helping Sell More and Faster

On the Sell side, Cameleon has long been helping sales teams and partners/resellers sell more products and services (i.e., solutions). More sales can come from sales teams’ ability to manage product bundling and subscription-based services, perform “what if” scenarios to choose the right product offering at the right price, and via cross-selling and up-selling recommendations.

The Cameleon suite is also enabling customers and consumers to configure solutions that meet their unique needs in a self-service manner. Users are guided through an interactive guided selling dialog, which is dynamically adapted according to customer needs and their current selections, whereby pricing and promotions are calculated and displayed in real-time.

Q2O cycles can be reduced by eliminating back-and-forth time-consuming clarifications and validations with product managers during quoting and ordering processes. The recently released test module by Cameleon – integrated in the product modeling environment – ensures that offerings are consistent before deployment.

During the modeling phase, business users can build models and then validate them by automatically running test campaigns (that they have already created themselves). When models change, business users will be able to run new test campaigns to ensure that the changes have no any negative impact.

Moreover, proposals can be generated with an appropriate and friendly template incorporating  the drawing and manufacturing data at the end of the order process. Needless to say, orders do not need to be re-entered into another system when integration is already in place.

Being Multi-Channel Friendly

What has always impressed me about Cameleon (and Access Commerce) was its partner relationship management (PRM) orientation. Thus, the third leg of Cameleon’s three-legged (“Design, Click, Sell”) mantra is Click, i.e., the ability to quickly distribute the new offerings release with the right content according to the different channels (via a single click, or so). 

Cameleon is a native multi-channel order management system, meaning that the same model can be deployed across multiple sales channels simultaneously, while still enabling the guided selling and quotation processes to vary based on the channel preferences and the user profile. The abundant choice of channels is as follows: a business to consumer (B2C) self-service portal, a business to business (B2B) portal (e.g., a dealer portal), telesales, field sales, store kiosks, and enterprise resource planning (ERP) order entry. This short video presents Cameleon's value proposition for both sales and marketing teams.

Some Other Strong Traits

As mentioned in Part 1, Cameleon is a web-based collaborative application for business users. It enables ordinary end-users to define and manage a product and offerings repository, with personalized product and service offering structures and pricing policies. Users can create and manage related guided selling processes by creating many questions and rules to modify the guided selling process behavior. They can also apply different pricing rules to the generated offer and personalize the generated offer with any kind of hierarchy and many types of associated info (e.g., sales price, cost price, taxes, commissions, etc.).

Therefore, Cameleon addresses the functional needs of the “services” industries, such as Telecoms, Media, Insurances, and Life Sciences. For example, Cameleon can manage as many prices types as needed, from one-time charges to monthly subscriptions. The product can handle guided selling scenarios independent from the product and services structure and can identify existing (once quoted) product and service bundles based on the options that have been selected.

Impressive Scalability

Cameleon’s Java Platform, Enterprise Edition-based architecture delivers best-in-class performance and scalability to thousands of concurrent users. The scalability comes from Cameleon’s approach of dividing complex configuration scenarios into sub-segments and applying any constraints automatically only to these sub-spaces. Thus, the system performance can easily scale to billions of combinations.

A representative example is SFR Vodafone (with Capgemini as an implementation partner), who has benchmarked Cameleon for thousands of users with sub-second response times. In addition to sub-segments, pooling of objects reduces the required memory size and loading time, while the caching of calculation results further optimizes performance. Multi-threading of user sessions ensures even more scalability, while the approach of lazy loading of objects optimizes the loading time. Last but not least, clustering and load balancing of servers guarantee a high level of availability.

Aggressive Growth Plan (and a SaaS Catching Up)

In spite of its strong growth of 30 percent for Q1 of fiscal 2010, on the down side, Cameleon’s new brand and ambitions come from a need to catch up in terms of software as a service (SaaS)/on-demand offerings. Namely, BigMachines has lately become the unofficial market leader, with over 200 customers, established partnerships with, Oracle CRM On-Demand, and Microsoft Dynamics CRM, and an established global partner ecosystem.

Webcom is holding its own SaaS turf with over 100 customers and similar (albeit less extensive) partnerships. For their part, FPX and Experlogix have also reinvented themselves as SaaS Q2O players, while still maintaining their sizeable legacy client-server install bases.

Thus, over the last five years, Cameleon has reportedly invested between 20 percent and 26 percent of its revenue in research and development (R&D). The brand new Java technology-based Cameleonedge on-premises software suite of products was released in late 2008, and is already used by a dozen of major customers.

Moreover, Cameleon entered the world of cloud computing two years ago with the two brand new SaaS products: Cameleoncloud Designer and Cameleoncloud CPQ for Salesforce CRM. Cameleon has been integrated with Salesforce CRM for over two years but became a fully multi-tenant SaaS provider about a year ago.

The first large SaaS customer was IMS Health. The SaaS install base is quite fledgling, but Cameleon claims to have more than 2,200 end-users in different industries across the world. In the meantime, Cameleon Configurator was also enabled for the cloud, while the Cameleon Catalog cloud version was slated for late 2010. The Cameleon Channel Selling offering (for the abovementioned Click phase) is the latest product to be made available on-premises and SaaS. None of the products is yet enabled for smartphones (i.e., iPhone or Android).

To date, Cameleon has chosen to partner exclusively with at AppExchange and no other SaaS CRM provider. After being the first Q2O player to integrate Salesforce Chatter to its CPQ application for its collaborative social media capabilities, Cameleon Software has been strengthening its partnership with by sponsoring and exhibiting at the Dreamforce and Cloudforce events. BigMachines and FPX have yet to follow suite, while Webcom has been embedding its ResponsAbility social platform’s capabilities within WebSource CPQ for a number of collaborative sales scenarios.

Is the Q2O Market Sustainable?

SaaS Q2O vendors have been showing healthy annual growth for years, which indicates the need for the Q2O market. But, as discussed in Kurt Chen’s recent blog post, is Q2O/CPQ sustainable as a standalone application in the log run?

Surely, Q2O functionality will eventually be subsumed by ERP, customer relationship management (CRM), or product lifecycle management (PLM) vendors (e.g., Consona’s acquisition of Configure Solutions), but the need for such solutions and their market potential is here to stay. The next frontier for Q2O solutions would be verticalization (e.g., Q2O offerings tailored for retailers, insurers, software vendors, etc.) and localization (to reach multiple geographic regions).

So far, all of the abovementioned Q2O vendors have gotten the collaboration and guided selling parts right, i.e., in terms of bridging the chasm between sales, marketing, and channels. In my opinion, Q2O vendors could extend their staying power by harnessing business intelligence (BI) and predictive analytics to discern, say, which product variants/options are the most profitable, what sells (and will sell) best in which demographic segments, rationalization of stock-keeping units (SKUs), components, etc.

In fact, each established on-demand Q2O vendor should have a wealth of design data and transactional history from their customers by now. There could be nothing as powerful as in sales & marketing data warehouse out there as these vendors’ repository engines. Imagine now combining these repositories with a powerful analytics engine, i.e., a world-class OLAP (online analytical processing) cubes crunching limitless combinations of billions of pieces of information?

The market wants world-class analytics – not just a limited number of canned key performance indicators (KPI’s) or tightly contained analytic application extensions. Right now companies have to painstakingly build these analytics themselves. Time will only tell whether any of these Q2O vendors will be able to pull this sales & marketing BI feat off.

Dear readers, what are your comments, thoughts, suggestions or individual experiences with the abovementioned vendors’ Q2O and CPQ solutions, in the cloud or on-premises? How do you handle your “design, click, and sell” processes? Manually? In an automated way? Somewhere in-between (within your ERP system)? Do you think the Q2O/CPQ market is sustainable as standalone in the long run?
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