IBM launches Corepoint CRM spin-off

IBM yesterday was set to launch the first fruit of its recently formed software spin-off in the customer relationship management market, dubbed Corepoint.

Customer relationship management (CRM) encompasses call-centre, help desk, computer telephony, billing systems, and other technologies used to handle the full range of customer relations.

Corepoint is based in Indianapolis and headed by Scott Webber, former CEO of Software Artistry, which IBM's Tivoli systems management subsidiary bought in January.

Company officials declined to comment.

The spin-off has targeted marketing, sales, customer service, support, related foundation technologies for integration with legacy systems, decision support applications, and computer telephony systems, according to company officials.

With Corepoint, which was first announced in August, IBM is making a concerted push into an area it's previously addressed only haphazardly, according to one analyst.

"They're taking pieces that they have individually and pulling them together. They had the Software Artistry piece, and had made a half-willed attempt at the external customer service market. They had the Early Cloud telephony technology, but it was buried as a middleware layer at IBM. Scott Webber was looking for an identity within Tivoli and (advocated) pulling the different pieces together," said Curt Johnson, an analyst with market researcher, Meta Group. "They're also breathing more life into the effort, with the service component and consulting, which have been pushing process redesign and customer service outsourcing. A lot of efforts are now being pulled together."

Johnson expects help desk and customer service vendors like Vantive and Siebel Systems to be most directly affected, with less head-on competition between the new group and enterprise resource planning (ERP) vendors like SAP, although the latter recently spelled out plans for the CRM arena.

Competitors lacking strong professional services offerings are the most vulnerable, according to Johnson.

"From what we've seen, the technology will fail if you don't have a good consulting and services message. IBM is bringing a lot of services clout," Johnson said. "By comparison, the help desk vendors are working hard to get mind share from the Big 5 and IBM's services organisation. This [services muscle] eases the whole transition and time to market, and throws another formidable competitor in the mix."

IBM's dual role as market player and partner to existing players for everything from system platforms to services shouldn't cause too much friction, according to Johnson.

"IBM's always had a reputation of being a pretty pragmatic bunch, and those vendors need IBM more than IBM needs them," he said.

After the initial push, it remains for Corepoint to integrate its far-flung product offerings.

"They've got a lot of work do to bring those products to the next generation and work on the integration between them," Johnson said. "They've got to build that type of integration, see where the holes are, and then decide to make or buy the remaining pieces."

The CRM market is a fairly open sector, compared to the relatively saturated ERP market for such staples as financial, human resource, and manufacturing applications, according to Harry Tse, an analyst with the Yankee Group, a market research firm in Boston.

"If you look at the front-office and building systems market, it's not dominated by any of the ERP software vendors, and that gives an opportunity to IBM, which has a valuable brand name. It's not dominated by any kind of ERP backbone player," Tse said. "IBM also gets back to [leveraging] Tivoli systems management software for managing things like help desk and building systems."

In particular, those opportunities exist in furnishing operational systems to banking, insurance, healthcare, energy, and telecommunications companies, according to Tse, who expects IBM's strategy in the CRM market to combine packaged applications and custom development.

"The ERP guys are not in it today, but they, the vendors, are going there too. You will see them running into each other," Tse said.

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