全球软件业：消费者体验将持续把CRM应用放在消费焦点上

1、GlobalResearch13 June 2019EquitiesGlobal SoftwareJennifer SwansonEquitiesGlobal SoftwareJennifer SwansonLowe HYPERLINK mailto:jennifer.lowe +1-415-3524694MichaelBriest HYPERLINK mailto:michael.briest +44-20-75688367Rakesh Kumar AssociateAnalyst HYPERLINK mailto:rakesh.kumaar +1-415-3524698HannesLeit

2、ner HYPERLINK mailto:hannes.leitner +44-20-75687085FatimaBoolani HYPERLINK mailto:fatima.boolani +1-212-7138345Katherine McCracken AssociateAnalyst HYPERLINK mailto:katherine.mccracken +1-415-3524749UBS Evidence Lab inside: CX Keeps CRM Apps Inthe Spending SpotlightCX Puts Renewed Focus on CRMUBSEvi

3、denceLabsurveyed612ITdecisionmakersaboutCRMsoftwarespendingand our analysis of the data shows (1) strong spending fueled by a focus on customer experience (CX); (2) a common desire to integrate CRM apps although views on how best to accomplish this vary; and (3) ongoing variation in what B2B and B2C

4、 organizations want even as both prioritize CX. We favor vendors able to provide full CRMsuites(CRM,SAP,HUBS)and/orrobustcustomerdataplatforms(CRM,ADBE, ZEN) and CRM remains our favorite play on thetheme.CRM Wallet Share Gains At Odds With Relative Discount ValuationsUBSEvidenceLabsurveydatashowsspe

5、ndingoncustomer-facingappssetfor2019 growth on par with 2018, with CX the most-cited investment priority. 49% of respondentsexpectspendingoncustomer-facingappstogrowfasterthanoverallapp spend in 2019 vs. only 3% expecting growth to be slower, validating Gartners projectionforCRMspendingtooutgrowback

6、-officeappspendingthisyear.However, at10.1xEV/CY20Salesor0.33xEV/Sales/Growth,theSaaSCRMpure-playstradeata discounttoback-officeSaaSat11.6xor0.52xgrowth,agapweexpecttonarrow.CX Drives Need For Integration, But More Than One Path For Success50% listed integration between CRM apps as a high priority,

7、but there was less agreement on the best approach as 29% favored an API-based approach while 21% preferred to standardize on a suite. We think the best positioned vendors will offer both approaches. We believe Salesforce is the furthest down the path towardoffering the best of both worlds, given a b

8、road CRM suite coupled with a comprehensive approach to data with MuleSoft, Customer360, and most recently, Tableau. SAP scoreswellintheseareastoo,exploredinmoredetailhere HYPERLINK /shared/d2SeCDhuRGVP10U LINK.Divergent Buyer Needs Likely Resist One-Size-Fits-All ApproachWhilevendorslikeAdobeandSal

9、esforceaimtoaddressabroadersetofneedsacross B2B and B2C companies, we think specific needs will continue to vary between customer segments even as a common focus on CX takes hold. This likely enables vendors to differentiate on core capabilities, while the suite providers will continue to expand TAM

10、 by layering in a broader set of functionality overtime. HYPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 23. UBS does and seeks to do business with companies covered in its research rep

11、orts. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider thisExecutive SummaryCompanies are investing heavily in customer-facing applications as improving customer experiences (CX) becomes a

12、 cornerstone of Digital Transformation initiatives. This focus is pervasive, regardless of business size (Enterprise and SMB) or type (B2C and B2B), and we see spending on CRM applications on pace to outgrow other categories of application spend in 2019. We believe a number of companieswillbenefit,i

13、ncludingSalesforce,Adobe,SAP,Zendesk,andHubspot, withSalesforceourfavoriteplayonthethemegiventhecompanysbroadsuiteof CRM capabilities and growing stack of dataassets.UBS Evidence Lab surveyed 612 IT decision markers across the US, UK, and Germany,andouranalysisofthisdatapointstorobustdemandforCRMsof

14、tware, withthestrongestgrowthinareasleveragedtotheCXthemeincludingcustomer support, customer analytics, ande-commerce.As companies aim to unlock value from data assets, integration is a priority, but thesurveyresponsesshowedsupportforavarietyofwaystoaccomplishthis,with some respondents favoring an o

15、pen API-driven approach and others looking to standardize on one suite. We think the vendors best positioned to benefit will be theonesofferingbothafullCRMsuiteandarobustandopendataplatform,with Salesforce the furthest along in delivering on thisvision.Spending Outlook Remains Bright For 2019Surveyr

16、espondentsexpect2019spendinggrowthonCRMapplicationstolargely match 2018 growth, with 49% expecting CRM app spending growth to outpace app budget growth overall versus only 3% expecting CRM spending to grow slower. Within CRM, e-commerce, customer analytics, and customer service are the areas generat

17、ing the most investmentgrowth.Figure 1: UBS Evidence Lab Survey Data Shows CY19 Spending Growth Consistent With 2018What Did Customer-Facing App Spend Grow in 2018? What Do Expect It to Grow in 2019?50%ofRespondents30%20%10%0%20%Decline 11-20%Decline 1-10%FlatIncrease10%Increase20%Increase20%2018A20

18、19ESource: UBS Evidence Lab, N = 612Integration Is a Priority, With Multiple Ways to Get ThereAs buyers aim to unlock more data from new and existing CRM investments, we sawwideagreementthatintegrationwasapriority.However,nosingleapproach to integration emerged as a decisive preferred model. We thin

19、k the market will ultimately embrace two approaches to data integration for unified CX. On one hand, some buyers will look to get integration by standardizing on a common suite. On the other, some will opt for an integrated data platform encompassing multipleapps.WeseeCRM,SAP,andHUBSbenefittingfromt

20、hesuiteviewwhile ADBE,CRM,andZENareinvestinginthedataplatformapproachwithSalesforce the vendor best positioned to offer customerschoice.Figure 2: Agreement That Integration Is Important, But Divergent Views On the Best Path For Accomplishing ThisSource: UBS Evidence Lab, N = 612Different Buyer Prefe

21、rences Create Market StratificationVendors are trying to broaden market reach through acquisition and organic development, but UBS Evidence Lab survey data suggests that even as many businessesembraceafocusonCX,someneedsstillvarybetweenB2CandB2B companies,andbetweenlargeandsmallbusinesses.Wethinkits

22、unlikelythata singlesolutioncanadequatelyaddressthefullspectrumofcustomerneeds.When presented with a choice between two scenarios, B2B buyers favored customer support as an upsell opportunity (for example) while B2C buyers were more focused on solutions that could resolve issues quickly. Similarly,

23、smaller businessesweremorepricesensitivethanlargerpeers.Wethinklargevendorswill address multiple customer sets over time through diverse product offerings, but thisdoesstillleaveroomforsmallerplayersaswellthatcancatertoaspecificset of needs.Figure 3: B2B More Focused on Customer Support For Upsell v

24、s. B2C Focus on Rapid ResolutionFigure 4: Enterprises Willing to Pay Up For Better Functionality vs. Price Sensitive SMB BuyersSource: UBS Evidence Lab, N = 612Source: UBS Evidence Lab, N = 612Front Office Apps Trade at a Discount to Back-OfficePeersWerebullishontheoutlookforcustomer-facingapplicati

25、onspendingin2019and beyond, yet many front-office SaaS vendors trade at a discount to back-office peers where we expect less growth in the underlying market. As a result, we see relatively more opportunity in the share of front-office SaaS vendors like CRM, HUBS, and ZEN, and remain more cautious on

26、 names like WDAY that trade at a premium despite exposure to a slower-growingTAM.Figure 5: We Expect Front-Office Software Investments to Outpace App Spend Growth Overall, Yet the Group Trades At a Discount to Back-Office SaaS Peers On EV/CY20 Sales and EV/Sales/GrowthTickerPrice6/12/19EnterpriseVal

27、ueRevenueEV/SalesCY20 EV/Sales GrowthFree Cash FlowEV/FCFCY19ECY20ECY19ECY20ECY19ECY20ECY19ECY20EFront-Office SaaS ProvidersSalesforceCRM151.28116,75916,33919,8187.1x5.9x0.27x3,3544,14234.8x28.2xHubspotHUBS173.297,22665881511.0 x8.9x0.34x6493112.9x77.6xShopifySHOP310.1432,4041,5132,00921.4x16.1x0.44

28、x2683NMNMZendeskZEN88.059,9198081,05512.3x9.4x0.29x62108NM91.7xFront-Office Avg.13.0 x10.1x0.33x73.9x65.8xBack-Office SaaS ProvidersCornerstoneCSOD52.913,3235686455.8x5.2x0.54x7714543.0 x22.9xCoupaCOUP119.298,05634543523.4x18.5x0.63x4164NM126.8xPaycomPAYC21412,42272088417.3x14.1x0.56x15720879.1x59.9

29、xPaylocityPCTY96.175,19551061110.2x8.5x0.41x9411055.1x47.3xWorkdayWDAY209.4550,7123,5644,38814.2x11.6x0.47x451671112.6x75.6xBack-Office Avg.14.2x11.6x0.52x72.4x66.5xSource: FactSet Consensus, UBS AnalysisPivotal Question 1: Will Front-Office Software Growth Outpace App Spending Overall?UBSView:Yes.W

30、ebelieveimprovingcustomerexperience(CX)isakeyfocusof Digital Transformation initiatives, and as such customer-facing software will be a sharegainerwithinapplicationbudgets,evenifITspendingbecomesincrementally more constrained in a slower-growth economicclimate.Evidence: UBS Evidence Lab data shows h

31、alf of survey respondents expecting customer-facing app spend to grow faster than app spending overall, with CX- orientedareas(customeranalytics,customersupport,andecommerce)setforthe fastestgrowthwithinCRM.ThisisconsistentwithGartnerdatawhichalsoprojects customer-facingappspendwilloutgrowback-offic

32、eappspendinCY19.WhatsPricedIn:Ourbasketofpure-playCRMSaaSapps(CRM,ZEN,HUBS,and SHOP) trades at 10.1x EV/CY20 Sales or 0.33x EV/Sales/Growth, a significant discounttoabasketofback-officeSaaSapplications(COUP,CSOD,PAYC,PCTY, WDAY) at an average of 11.6x EV/CY20 Sales or 0.52x EV/Sales/Growth, on conse

33、nsus estimates. We think this valuation gap should narrow and potentially invert as spending trends favor CRMinvestments.UBS Evidence Lab Data Positive For 2019 CRM/CX Spend2018wasahealthyyearforspendingonsoftwareingeneral,andcustomer-facing applicationsinparticular,inpartfueledbytaxreformbenefitsth

34、atallowedbuyers to put added investments into tech. Most investors dont expect 2019 spending growth to match 2018, but were encouraged by UBS Evidence Lab survey data showing respondents anticipating that customer-facing application spending growth in 2019 will mirror the strong spending growth seen

35、 in 2018.Figure 6: Survey Respondents Generally Expect CY19 Spending on Customer-Facing Apps to Grow at the Same Pace as Spending Grew in 2018Source: UBS Evidence Lab, N = 612On a weighted basis, survey responses imply around 8% growth in spending on customer-facing apps both in 2018 and projected f

36、or 2019; however we notethat companiesinvestingthemostincustomer-facingsoftwarearealsothemostlikely toanticipatesignificantspendinggrowth.Breakingitdown,customersthatreport spending $1M per year on customer-facing software anticipate 9% spending growth in CY19, while customers spending 2x more likel

37、y to have a second product from that vendor, and vendors with the best portfolio of solutions also show a lower likelihood of customer churn.CX a Driving Force Behind Customer-Facing InvestmentsCustomer Experience is seen as a driver of competitive differentiation in a world whre word-of-mouth and o

38、mmendtons are the nw adertng. hn UBS Evidence Lab asked 612 IT decision makers for their top investmentpriority when considering customer-facing technology, the most popular response was usingtechnologytocreatebettercustomerexperiencesasasourceofcompetitive differentiation (13% of responses).However

39、, we believe the key to positive CX is offering a unified experience to customers across all touchpoints, powered by a single unified customer profile, and this view was validated by survey data showing improved integration as the second-most cited top priority (11% of responses), and creating a uni

40、fied experience across all touchpoints as the third-most cited (10% of responses).One oft-cited obstacle to achieving an integrated view is the large number of fragmented applications in use at organizations today, both within operational unitsandacrossthebroaderorganization.However,whileUBSEvidence

41、Labdata showed some interest in standardizing on one common application platform, this was relatively lower on the priority list (7% of respondents listed this as the top investment priority).Instead, we think that while theres interest in having one single view of the customer,therewilllikelybemore

42、thanonewaytoaccomplishthisinthemarket. Ononeside,wethinkfull-suitevendorswillbeabletoaddressallneedsforsome customers with a single integrated solution. On the other, we see platforms unifying data and making it available to a broad array of applications using standard APIs and common dataformats.Ul

43、timately,wethinkcompaniesthatcanoffercustomersflexibilitybetweenasuite- driven and a data-platform-driven vision for CX are the most likely winners. We think Salesforce is well down the path on that front, offering the full breadth of CRM capabilities while also investing in a common data platform t

44、hrough the acquisition of MuleSoft and most recently the pending acquisition of Tableau.Adobe has also made strides here through deep partnership with Microsoft and with SAP on the Open Data Initiative.We think Zendesk is also well positioned as the companys Sunshine platform offering, while early,

45、fits well with this vision and builds on the companys long- standing support for third-party APIs. Similarly, Hubspots growth has benefited fromsellingthefullsuite,whilePlatformshouldbroadenitsreachtoalargersetof potential customers and partners.Figure11:TheMostCommonlySelectedTopPrioritiesPertainto

46、DrivingBetterExperiencesandBetterIntegration BetweenAppSilos,ButStandardizingonaSingleProviderRankedLowerOntheListWhat Is the Priority For Customer-Facing Software Investments Over the Next 1-2Usingtechnologytocreatebettercustomerexperiences as a source of competitivedifferentiationImprovingintegrat

47、ionbetweenexistingapplications Creating a unified customer experience acrossalltouchpoints 13% 11% 10%Migrating existing on premise applications to the Cloud9%Improvingthevaluegeneratedfromexistingfront-office applications9%Re-architectingorre-platformingexistingapplicationsto a more moderninfrastru

48、cture7%Standardizingonasmallernumberofapplication providers 7%Better measuring and attributing the impact of customer-facing content and applicationsCollecting feedback regarding experiences directly from customers via surveysReleasingAIcapabilitiestoenhanceexistingoperationsConsolidating, cleansing

49、, and centralizing fragmented data setsBuilding proprietary customer applications using modern coding techniques to address specific business opportunitiesAdoptingaDevOpsapproachtocustomer-facing applicationdevelopment7%7%7% 4%0%5%10%15%Source: UBS Evidence Lab, N = 612Lots of Apps, Limited Integrat

50、ionMost operationally silos use tools from a few different vendors to address the full set of product needs. UBS Evidence Lab data shows multiple applicationsinusewithinthemajorCRMapplicationsilos,with3-5applicationsin significantusebeingthemostcommonresponseinthesurveygroup.Figure 12: Most Organiza

51、tions Have 3-5 Different Apps In Use In Major Customer-Facing Business UnitsSource: UBS Evidence Lab, N = 612Respondents indicated that these applications were somewhat integrated, both within a given department and between departments, although only 37% felt that applicationswerelargelyintegratedwi

52、thinoperationaldepartments,and36%felt apps were integrated across operational groups. However, most agreed that integrating these apps together was a priority, with around half listing this as a high priority. Notably, integrating apps across departments was listed as a high prioritymorefrequentlyth

53、anintegratingwithindepartments,potentiallyaresultof CX initiatives casting a greater light on the need to share data across traditional front-office silos.Figure13:MostRespondentsFeltAppsWereSomewhat Integrated TodayFigure14:ButNearlyAllSawIntegrationAsaPriority, WithHalfListingThisasaHighPrioritySo

54、urce: UBS Evidence Lab, N = 612Source: UBS Evidence Lab, N = 612No Single Path For SuccessUBS Evidence Lab survey data highlighted most organizations placing a high prioritization on integrating various customer-facing apps, but less agreement on the best way to accomplish this. When asked about the

55、 most likely path towards achieving integration, leveraging an Open API architecture was the mostpopular responsewhilestandardizingonasinglesuitewaslesspopular,buteachofthe4 paths presented captured at least 20% of responses. By customer type, larger organizations and those spending the most of cust

56、omer-facing apps were the most inclined to opt for an API-drivenapproach.Figure 15: Agreement That Integration Is Important, But Divergent Views On the Best Path For Accomplishing ThisSource: UBS Evidence Lab, N = 612As a result, we expect significant market opportunities to cluster around two diffe

57、rent routes for achieving integrations a suite-driven vision and a data- platform-drivenvisionwithleadingvendorsofferingsolutionsofferingcustomers flexibility to choose between either path likely the best positioned. We seeSalesforceastheleaderonthisfront,givenabroadarrayofCRMcapabilitiesand afocuso

58、ndataintegration(MuleSoft,Customer360,andnowTableau).Path 1: Concentrating Spend With a Preferred Suite ProviderWhile standardizing on a single suite was a less popular option for achieving integration,UBSEvidenceLabsurveydatadidshowastrongpreferenceforbuying multiple products from a single vendor.

59、Within the survey population, Salesforce showed the highest adoption of multiple products within its user base, with customersusingoneproductfromSalesforcebeing2.3xaslikelytobuyanother productfromSalesforcevs.thecompanysmarketshareoverall.SAPalsoshowed strong adoption of multiple products within its

60、 base, as a customer buying one SAP CRM app was 2.2x as likely to buy a second product from the company, albeit it performed much better in Germany than in either the US or UK in this regard.Figure 16: Customers Already Using One Salesforce Product Are 2.3x More Likely To Buy AnotherSalesforce Produ