In Fragmented Social CRM Market, Gartner’s Magic Quadrant Report Sees No Place for Microsoft Dynamics CRM

When it comes to social CRM what does Microsoft Corp. have in common with Salesforce.com, Lithium Technologies Inc., Jive Software, Kana Software, OpenText, Attensity, Telligent, and BazaarVoice?

Apparently nothing, according to the recently released Gartner 2011 Magic Quadrant for Social CRM report, which, in addition to analyzing the state of the social CRM market, evaluated companies and identified market leaders (Salesforce.com, Lithium Technologies and Jive); niche players (Kana Software and OpenText among others); visionaries (Attensity and Telligent); and challengers (BazaarVoice).

Gartner Inc. placed 20 companies into one of those categories but Microsoft did not make any of them. Micosoft did not return an email seeking comment, but as recently as Worldwide Partner Conference has explained new social features of Dynamics CRM Online and CRM 2011 coming in the Q4 2011 service update.

In the report Gartner describes the social CRM industry as "fragmented," and made up of more than 100 vendors, many of which are not profitable and only generate $1 million in revenue annually.  Spending on social software for marketing, sales and customer service was reportedly up 40% in 2010, but social CRM applications accounted for less than 5% of the total CRM application market. Gartner expects the social CRM market to reach $1 billion by the end of 2012, up from $625 million in 2010.

So why exactly didn't Microsoft make the list?

"We had a criteria we used for who gets on, who gets off," said Adam Sarner, a Gartner research director and lead analyst on the report. "There are hundreds of vendors doing something around social CRM so we looked at issues like focus, how much they end up on short lists for sales, marketing, customer service reasons and time and attention placed ...