(Bloomberg) -- When Salesforce.com Inc. emerged two decades ago, it lashed out at the software establishment: large companies that allegedly locked clients into dated products. Now, a coalition of newer rivals have extended that criticism to the cloud applications pioneer.
Ten software upstarts kicked off a public campaign Thursday that knocks customer relationship management, or CRM, titans, including Salesforce, Oracle Corp. and SAP SE, by saying the large companies keep clients trapped in subpar software suites, potentially shutting out smaller rivals with newer technology.
The “Platform of Independents” leading the effort include Segment Inc., Amplitude Inc., Outreach Inc., Pendo.io Inc. and Drift.com Inc. Some of the companies are privately held unicorns, with valuations exceeding $1 billion. Each caters to a different software niche. The campaign began with a two-page ad in Thursday’s print edition of the Wall Street Journal and includes a web page and information sessions for prospective clients. More than 190 companies co-signed the main tenet of the campaign, that CRM software “isn’t enough” to provide good customer experiences to consumers.
“We, as independent software companies, have built our products with the belief that a business should never be locked into a suite, never forced to have a one-size-fits-all technology approach, and its data should never be siloed,” the companies said in a statement. “It’s time to break free of the data monopoly.”
The smaller companies argue the large software makers focus more on selling bundled packages of products than serving their clients’ needs with continuous innovation. Large technology companies have come under increasing antitrust scrutiny for their business practices, including how they wield power to maintain advantages over smaller firms. Beyond panning the quality of the bigger players’ technology, the chief executive officers of the startups said their larger rivals use acquisitions to bolster their market power.
“If any of these guys becomes too big, that’s a threat to all of us in this ecosystem,” said Spenser Skates, CEO of Amplitude, which helps clients understand user behavior to improve product experiences. “Salesforce bought MuleSoft, Cisco bought AppDynamics. This is continuing to happen. It’s definitely a concern.”
Representatives for Salesforce, Oracle, SAP, and Microsoft didn’t immediately respond to a request for comment.
Salesforce has been well served by its strategy in the CRM market. The company’s shares climbed about 19% last year. Oracle’s stock rose about 17%.
Salesforce led the market for customer-management applications with 16.8% as of 2018, the last full year for which data is available, according to research firm IDC. Oracle was next with 5.7% while SAP came in third with 5.6%. Adobe Inc. and Microsoft Corp. rounded out the top five.
Salesforce, founded in 1999, is the youngest company in the group. The others have been around for about four decades.
“I think there’s something significantly broken that there’s been no big CRM company built in the last 10, 15, or 20 years,” Peter Reinhardt, the CEO of Segment, which helps companies compile their data about consumers, said in an interview.
Reinhardt, who spearheaded this campaign, said he isn’t interested in being acquired. Rather, he wants to work more closely with his Platform of Independents peers to jointly sell packages of software solutions to clients, as a way to counter the selling advantages and software product bundles of larger companies. And Reinhardt is optimistic that a shakeup is possible in enterprise technology.
“I think we have a temporarily dominant set of companies,” he said. “But I think there’s a huge opportunity for another rewrite of the CRM world.”
(Updates with 2019 share performance in the eighth paragraph.)
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