History of CRM Software – Mining Data for Sales

Category: CRM Software

CRM has grown into an entirely different animal since its one-dimensional, simple origin of filing cards where customers’ name, address, and phone number were manually written and filed in metal cabinets.  Early adopters had the foresight to realize customers were flesh-and-blood persons that you could profile, and not just sales statistics. If you’ve just come across CRM now, here’s a quick overview on “what is CRM?” to get you started.

Much have been changed in CRM driven by a confluence of factors, not necessarily related, in social behavior, consumer welfare politics, trade relations and, the biggest disruptive of all: information technology including elements such as data mining software.  Yet at the heart of the CRM evolution, one thing remains constant: creating sales out of customer data. 

We can sum up CRM evolution in five milestones that changed the I.T. landscape:

  • Enterprise solutions
  • Web based technologies
  • Cloud hosted technologies
  • Social media technologies
  • Mobile technologies

1970s – Advent of independent mainframe solutions

The seventies saw stand-alone mainframe enterprise technologies spurred the advent of hotline numbers, sales force automation systems and customer information files.  These systems acted on their own and had little semblance to the coordinated data management of today’s CRM.  Often, the aim was to encode manual files into digital data to save storage space or speed up search for customer files.

Relational database like Nomad Software allowed us to create databases, manage data and write applications that would lead to lookup tables and data access from various sources. Piles of computer printouts that ran to hundreds of pages to create one database were not uncommon.

Mid 1980s – Database marketing gained traction

By 1980s, the direct marketing concept pioneered by Lester Wunderman was transforming into database marketing. Marketers started to realize personal communications with individual customers could translate to higher conversions. Although it’s still a far cry from today’s CRM, we were seeing the early integration of customer data with sales strategy.

Mid- to late 1980s – the Rise of contact management software

By now, marketers realized the sales potential of customer data. Disparate platforms were being consolidated—transactional and analytics databases were integrated with customer information—and various company departments, mainly marketing, sales, customer service and accounting were being connected through back office systems.  Banks and insurance companies were the early adopters.

Even as customer data was still largely volunteered in printed forms (e.g., application and survey forms) call centers could mine transactional data and the world was introduced to that dreaded call: the outbound marketer trying to upsell you.

By 1986 the first contact management software, ACT, was rolled out by Conductor Software. We can say this is the Cro-Magnon of CRM with recognizable modern but basic features that paved the way for client/server architecture during the PC revolution into the late eighties. Companies had to invest large sums of money to manage on-premise model, employing an in-house I.T. staff and buying capital-intensive hardware and software to manage CRM.

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On the other end of the spectrum, consumers were getting used to CRM care as companies across industries, such as utilities, consumer goods and health care, opened their communication lines powered by a single view of the customer.

Early 1990s – Enterprise resource planning comes of age

The early nineties saw database marketing evolved into sales force automation. We now see the first true CRM framework, consolidating contact management, lead management, opportunity management and deal tracking in one over-arching CRM infrastructure. Saratoga Systems and Brock Systems would be pioneering sales force automation.

By 1993 it’s a new company, Siebel Systems, which would dominate the shift to front-office. Siebel would be acquired by Oracle fourteen years later for $5.5 billion.

In 1995, the term “customer relationship management” was coined, mainly to signal the rite of passage of front-office CRM. Credit mostly goes to Gartner Group, but, debatably, Tom Siebel and IBM are sometimes credited, too.  Some of the terms considered included “customer information system” and “customer information management.”

1997 saw Oracle rolling out its Oracle Sales and Marketing (OSM) as vendors shifted to the front office. CRM was moving away from a purely customer solution and into an enterprise resource planning (ERP) suite that expanded to now include business operations such as product planning, manufacturing and shipping, on top of marketing, sales and payment systems.

Late 1990s – mobile CRM is introduced, but it’s cloud or online CRM that takes the spotlight

By 1998 Siebel acquired Scopus to add cutting-edge call center technologies to its sales force automation. SAP entered the picture to challenge Siebel’s dominance with a more streamlined CRM format via its research and development organization, SAP Labs.

In 1999, the first mobile CRM was launched by vendor Siebel, the Siebel Sales Handheld. Oracle, SAP and PeopleSoft would release their own mobile versions. However, at that time, mobile adoption was hampered by limited mobile device infrastructure (think Palm organizers; the first smartphone would be released eight years hence) and Internet architecture (think dial-up and Kbps).

However, 1999 proved to be a disruptive year heralded by a new technological platform that would take CRM to new heights: cloud services. Cloud CRM was appealing to price-conscious companies because, with cloud, these businesses could get a cheap but top of the line CRM solutions developed from the best practices and with a free demo to boot. It’s a good alternative to costly on-premise applications. launched the first major Software-as-a-Service (SaaS) CRM. It wasn’t a big splash or an overnight success. Rather, SaaS CRM was touted as a “toy” for small business until SaaS evolved into more robust systems and large corporations started to migrate to cloud. Functionality and scalability were bywords that carried the day for cloud.

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Early 2000s – bubble bursts

As investment in information technology and new buyers dried up, CRM product development also slowed down. Even market leaders Oracle and Siebel experienced declining sales.

By 2003, integrating CRM with legacy systems (older but useful applications without the upgrades) to cut costs became attractive, creating an opening for Microsoft to leverage its MS Office and Outlook to develop its own CRM suite. Today, Microsoft Dynamics is a strong player in the industry.

Mid- to late 2000s – cloud-based CRM takes off; open source CRM is introduced

In 2004, SugarCRM introduced us to open-source enterprise applications, giving businesses more flexibility in fine tuning their CRM at a faction of fixed on-premise cost. The software developer would later release a cloud-based version, which by now was becoming the industry standard in CRM model.

2006. Amazon rolled out EC2/S3, cementing the popularity of cloud CRM. It made a tweak on cloud service by renting out computing power to businesses that scrimp on buying capital-intensive powerful servers. In the same year, Siebel was acquired by Oracle.

In 2007, launched its cloud-based application development ecosystem with SaaS developer partners. The infrastructure convinced doubters that web based CRM could be customized to specific business needs.

Late 2000s – CRM turning social

2008 to 2009 saw the shift of CRM from transactional to interaction relationship model. Companies started to create their own social media strategies to engage customers, albeit for lack of solutions, social media was treated as a parallel unit of CRM.  With stronger cloud infrastructure and faster Internet connectivity across the world, more small players entered the CRM market.

The present and future

Today, companies are focused on three areas touted to be the future of CRM. First, CRM will go fully social. We’re already seeing companies like DemandBase and Nimble provide social media analytics beyond tracking likes and shares. The next-level social CRM is expected to give businesses a more in-depth customer profiles based on digital behavioral attributes across social networks.

Second, social CRM will allow businesses to fine tune their content marketing. They can now deliver the right content to the right person on a case-to-case scenario.

Lastly, we’ll see the coming of age of mobile CRM.  More powerful devices that mimic the convenient features and computing power of desktops, not the least more people are accessing the Internet via their smartphone than desktop, will make mobile CRM the toast of the future.

Other factors like laser-focused content delivery will drive the future of CRM software.


CRM today is more powerful, more insightful and more cost-effective than its predecessors. Despite its massive transformation from filing cards to what is now regarded as the heart of business, CRM remains true to its core: engage customers with a more personal communication.

By Jenny Chang

Senior writer at FinancesOnline who writes about a wide range of SaaS and B2B products, including trends and issues on e-commerce, accounting and customer service software. She’s also covered a wide range of topics in business, science, and technology for websites in the U.S., Australia and Singapore, keeping tabs on edge tech like 3D printed health monitoring tattoos and SpaceX’s exploration plans.

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Businessbanzai says:

I am excited how the future of CRM software turns out. But in your opinion, how will CRM software programs get sales leads in the future?

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David says:

Good question, and thank you for asking that. I think CRM will usher in a new way of tapping and engaging leads in the next few years to come. This is one big reason why you or your business should always be on the lookout on how CRM can transform businesses in the future. CRM solutions, particularly social CRM, will use the crowdsourcing potential of the market and technology in the future to gather fresh new ideas and content from customers, clients, and other prospects to improve products and services. Engagement with existing and new customers will be taken to a new level, where the customers themselves are part of the development of your business brand or campaign. In the next few years, do not be surprised to see that companies are using CRM solutions to outsource content and ideas from the old and potential customers themselves.

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