In the following series, we will look at the rise of Configure Price Quote (CPQ) software as a segment of its own, just as CRM and ERP are. We will trace its journey starting from its precursors when the word CPQ was not coined and through the various stages of initial growth to its maturity in the backdrop of technology and platform innovation. We will also talk about the rise of Salesforce and the serverless trend of cloud-based delivery models.
We will look at strategies played out by various contenders through mergers and acquisitions and how they have responded to retain relevance. We will also look at the path forward and explore the gaps and opportunities today and how different niche players are eyeing those gaps to capitalize on those opportunities.
Part 1 Advent of CPQ
Late Fangers guide to galaxy of CPQ solutions
Having a late initiation into the world of Configure Price Quote (CPQ) piqued my interest to understand the key business process of Quote to Cash, which is central to most businesses, and I also wanted to understand where it came from and where it is headed.
Having spent the first decade in the telecom domain working in the backend of fulfillment and assurance space, I had heard sparingly about the packaging and options software used in some quarters as far back as 2007. I remember some colleagues were discussing about pricing the device and the value-added services for the mobile subscription plans.
Salesforce was yet to emerge as the low code platform of choice back then. Software used to be license priced per deployment units, i.e., site licenses or the number of CPU cores on which the cluster would have been installed. This helped the software vendors cash in on the willingness to pay upfront (WTPU) when selling the same software to large enterprises. In those days, businesses had expectations set on paying upfront. Software solutions were complex things to sell and price, and they were available in packages of suits by Oracle and IBM, delivered in CDROM.
Salesforce – the Disruptor
Incidentally, Salesforce was making a lot of right noises to break from the shackles of complex software and disrupt the market by making a point for simplicity. The humble beginning of Salesforce as a CRM software delivered as a website like Amazon.com ─ with simple tabs for accounts, contacts, and opportunities ─ to becoming the precursor of Serverless was all happening since 2000. With the launch of Apex user layer DSL and Visualforce in 2005, Salesforce set in motion a truly disruptive platform for business software delivery and consumption.
Forerunner
Meanwhile, Godard Abel, the founder of BigMachines, was truly one of the forerunners of CPQ space. His analytical prowess, combined with the challenges faced by his father’s pump manufacturing company in pricing the custom-built machine pumps with bespoke configurations, inspired the creation of the company’s form, function and name. It was founded in 2000, and seeing the meteoric rise of Salesforce, they built integrations with Salesforce CRM. Also, BigMachines Express, a force.com native CPQ, did not survive after its acquisition in 2013. But even today, many large installations in industries such as Telecom have Oracle or Siebel CPQ, which must have benefited in code and inspiration from this acquisition.
Guesstimated stack rank by market share
Though the actual market share is evolving and dynamic, some of the prominent players today are:
- Salesforce CPQ (formerly SteelBrick): Salesforce’s CPQ solution had a strong presence in the market due to its seamless integration with Salesforce’s CRM platform and wide customer base.
- SAP CPQ (formerly CallidusCloud CPQ): SAP CPQ, as part of SAP’s suite, was recognized for its extensive capabilities and presence in the enterprise segment.
- Apttus (Now Conga CPQ): Apttus, known for its comprehensive Quote-to-Cash solutions, had a notable market presence in various industries.
- PROS CPQ: PROS, while recognized for its pricing optimization solutions, also offered CPQ capabilities that contributed to its market presence.
- Experlogix CPQ: Specializing in CPQ, they had a presence, particularly among organizations with complex product configurations.
- Oracle Siebel CPQ (formerly BigMachines): Oracle’s Siebel CPQ, formerly BigMachines, catered to enterprises, contributing to Oracle’s overall CPQ market presence.
- IBM CPQ (formerly Sterling Commerce): IBM CPQ, part of the IBM Sterling suite, had a presence in both B2B and B2C CPQ solutions.
Advent of CPQ on Salesforce
Just as Salesforce disrupted the enterprise software, two of the top four CPQ players, Salesforce CPQ (formerly SteelBrick) and Conga CPQ (formerly Apttus), forayed into CPQ space with solutions natively built on Salesforce serverless architecture. Not surprisingly, just as Salesforce gradually assumed a leadership position over the next decade as the system of experience, these CPQ solutions built on Salesforce increasingly gained market share compared to incumbents like BigMachines.
Read the other blogs in the series: Part 2 The Evolution of CPQ on Salesforce and Beyond , Part 3 The Evolution of CPQ on Salesforce and Beyond , Part 4 The Evolution of CPQ on Salesforce and Beyond.
Author’s Profile
