Onyx Thinks ASP Opportunities Are A Gem

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Onyx Thinks ASP Opportunities Are A Gem
L. Talarico - October 18, 2000

Event Summary

Onyx Software, a CRM vendor that competes against the likes of Siebel, Kana, and Pivotal in the mid-market, is committed to distributing its applications through ASPs. Onyx's main product is Onyx 2000, which has the following four components:

  • E-business Engine - This is the backbone for the rest of the applications. The engine consists of a data center, process technology (technology that tracks customer interactions across company divisions and routes customer data to the appropriate division), an interface framework that manages the user interface for the other three components mentioned below, and an integration framework to tie Onyx's front end applications to other vendor's back end (ERP and other) systems.

  • Customer Portal - This application allows organizations to provide personalized marketing, e-commerce, and service functions to their customers over the Internet. Capabilities include catalog and campaign management, product configuration and order processing, and online service functions - including a self-help knowledge database.

  • Employee Portal - This application allows employees to manage contact information and sales opportunities, and view customer service queues. The Employee Portal also allows third party products to be viewed in the same interface via enterprise portal technology

  • Partner Portal - This application allows organizations to provide collaborative marketing, selling and support capabilities to their partner channel. This includes the ability to distribute leads to partners and provide product configuration and order processing.

The full version of each component is available via ASPs. Onyx has developed a partner network titled ASPiN that matches software, hardware, and hosting companies to the needs of the client. Clients that choose to have their CRM data managed by an ASPiN partner can decide to purchase or rent the applications and select onsite or offsite data storage.

Scott Bledsoe, Vice President of Business Development, says the ASPiN program is a business development initiative as much as it is a service offering. Mr. Bledsoe states that Onyx strives to make their ASP partner relationships successful by ensuring that partners have the vertical expertise in the client's industry before allowing them to administer Onyx applications. This forces Onyx to maintain close relationships with its ASP partners such that ASPs only take business for which they are qualified. Although this makes Onyx's partner relationships difficult to maintain, the potential benefit to the client is clear - their CRM solution will go to the partners with a set services that most closely meets the client's needs.

Market Impact

ASP offerings for CRM applications are enjoying fast acceptance in the mid-market. Onyx is positioning its offering to take advantage of this trend. A challenge for any mid-market CRM vendor is to convince potential clients that their offering provides a clear advantage in a confusing market. Mid-market organizations have many choices in the marketplace. TEC is witnessing a few trends in the CRM marketplace that will benefit organizations in the long-term, but currently create confusion.

The first trend is the acceptance of the ASP model as a mode of distribution to the mid-market. Nearly every mid-market vendor has some form of an ASP offering. Although the promise of reduced implementation risk and time, lower upfront costs, etc. justify the ASP model, this brings an entire new set of issues for the mid-market organization to consider. Some of the issues that need consideration include the technical capability of the ASP to administer the program, the ability of the ASP to guarantee connectivity, what pricing model to choose, and how to negotiate a service level agreement. These issues need to be addressed in conjunction with evaluating the capabilities of the software package, and understanding if the ASP offering differs from the traditional licensed offering.

The second trend that is sure to make a CRM selection cumbersome is the push to have a single vendor supply both analytical and operational applications. Analytics applications include business intelligence tools, customer analytics tools, segmentation tools, and web analysis tools. SAS, Broadbase, E.piphany, WebTrends, and Net Perceptions traditionally supplied analytics tools. Operational applications include sales force automation, contact and lead management, and customer service functions. Siebel, Onyx, Pivotal, and Interact traditionally supplied operational tools.

There have been a number of acquisitions and alliances between the two types of vendors (see Broadbase Continues to Expand and When You Realized the Need for a Unified View of Your Customers, that is E.piphany for more information on this market trend). This makes a CRM selection perplexing because no vendor has every aspect of operational and analytical CRM, and every vendor is focusing efforts on coming up with a "complete solution." Wading through the marketing hype to find a vendor that has the right mix of operational and analytical CRM to meet the organization's needs is becoming increasingly difficult in this blurred market.

Over the long term as the product offerings and ASP distribution models mature these trends should benefit most organizations. Onyx appears to be moving in the right direction because its focus on managing the ASP reseller as a close partner should help make many of the ASP issues less cumbersome for its clients. Furthermore, Mr. Bledsoe did tell TEC that although Onyx's current offering has limited analytics capabilities; it is actively seeking partnerships with analytics vendors to provide those functions. Onyx will not disclose whom it is considering as partners, or what types of analytical tools it is planning to add at this time.

User Recommendations

Mid-market firms looking to use an ASP for their operational CRM needs should certainly consider the service options available in the Onyx ASPiN program. Onyx has a sound strategy for distributing its product through ASPs. If analytics components are important to your CRM initiative be sure to wait and see who Onyx partners with, what tools will be available, and what the timeframe is for commercial availability.

Consider the tradeoffs with using an ASP. Some of the potential benefits are:

  • Reduced implementation risk

  • Reduced implementation time

  • Reduced upfront product costs

  • Removal of application maintenance from the internal IT staff's agenda

Some of the potential pitfalls with using an ASP are:

  • Selecting an ASP that lacks the technical ability to administer the program

  • Connectivity problems

  • Determining responsibility when something goes wrong (the ASP blaming the application vendor and vice versa)

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