Press release
STAMFORD, Conn., July 7, 2008 — Worldwide customer relationship management
(CRM) software revenue totaled $8.1 billion in 2007, a 23.1 percent increase
from 2006 revenue of $6.6 billion, according to Gartner, Inc.
“Though currency buoyed growth, this represents the fourth year of solid market
performance for CRM,” said Sharon Mertz, research director at Gartner. “The
market was driven by greater contributions from emerging regions, continued
rapid adoption of software as a service (SaaS), and a continued focus on
investments that promote customer retention and enhance the customer
experience.”
SAP was the No. 1 vendor in worldwide CRM software revenue in 2007, accounting
for 25.4 percent of the market (see Table 1). Oracle maintained the No.2 spot
with 16.3 percent of the market. SalesForce.com and Microsoft registered the
highest growth rates of the top vendors with 49.8 percent and 88.6 percent
growth, respectively.
SaaS
continued to drive the market forward, representing more than 15 percent of
total CRM software market revenue in 2007. Growth in SaaS resulted from gains
by SaaS pure plays, traditional on-premises vendors offering on-demand
solutions and vendors transitioning their installed base from on-premise to
on-demand. Though the sales segment still represents the largest contributor to
SaaS revenue, demand is increasing for marketing automation and customer
service and support solutions. Vendors that offer both on-demand and on-premise
solutions are acquiring new customers and shifting their customer bases and
revenue models to a greater proportion of SaaS in response to market demand.
The CRM market remains highly concentrated in Western economies, with emerging
markets accounting for only about 15 percent of the market. In 2007, over 53
percent of the CRM market was concentrated in North America, and Western Europe
garnered 32 percent of the market. However, growth rates in emerging markets
surged in 2007 with the Middle East and Africa region and Eastern Europe both
exceeding 40 percent growth. Growth in Latin America is beginning to
accelerate, and Asia/Pacific is providing growth prospects for an increasing
number of vendors as the CRM market expands into Singapore, Malaysia, Hong
Kong, Vietnam and South Korea. Australia continues to be the largest market in
Asia/Pacific, but China and India represent significant longer-term market
opportunities.
“CRM vendors should focus on offering products, services and contractual
arrangements that enable customers to create the optimal experience for their
clients,” said Ms. Mertz. “Top priorities include online communities, workforce
optimization, analytics, multichannel campaign management and marketing
resource management.”
“Looking forward, social networking, collaborative technologies and social
software are producing a major impact on the CRM market. Enterprises face
increasing challenges to determine how best to harness these trends and
technologies for growth, both internally and in their customer service
strategies,” said Ms. Mertz.
