IDG News Service —
Global spending on CRM (customer relationship management) software surged in 2007 to roughly US$8.1 billion, a 23.1 percent jump over 2006's total of about $6.6 billion, according to the research firm Gartner.
Some of the increase can be attributed to currency fluctuations, noted Gartner analyst Sharon Mertz. The weak U.S. dollar has resulted in software companies reporting higher totals from sales made abroad.
"Although our estimates for 2007 accurately reflect dollar-valued market growth, they overstate market growth from the perspective of most other currencies. Accordingly, great care should be exercised in their interpretation," Mertz wrote.
SAP held the top spot, with 25.4 percent market share, followed by Oracle with 16.3 percent. Salesforce placed third with 8.4 percent, followed by Amdocs at 5.2 percent and Microsoft with 4.1 percent.
Salesforce and Microsoft registered the highest growth rates of the top vendors, with 49.8 percent and 88.6 percent, respectively.
Most CRM spending is still happening in Western markets, with 53.4 percent in North America and 31.8 percent in Western Europe. But while sales in emerging markets only account for 15 percent of the overall tally, both the Middle East/Africa and Eastern European regions saw growth rates in 2007 of more than 40 percent, according to Gartner.
The CRM category encompasses a number of subsegments, including sales, marketing and customer service, the report notes.
During 2007, the sales subsegment grew 27.6 percent, a figure that represents 40.5 percent of the overall market, compared to 39 percent in 2006. Marketing automation products had a 15.4 percent growth rate, for 20.3 percent of the overall market, a slight drop from their 21.6 percent take in 2006. The customer service segment rose 22.7 percent, for roughly 39 percent market share.
Trends driving the CRM market include social networking and related technologies, the report notes.
"Businesses face increasing challenges identifying customers, determining which behaviors they should be monitoring and subsequently responding to, and which types of social media are appropriate to support their particular business and industry," Mertz wrote. "Customers will look to vendors to provide innovative technologies and services that assist them in proactively channeling the power of social nets into successful CRM strategies."
Oracle, for one, is beginning to roll out a series of "social CRM" applications. The first is Sales Prospector, which is meant to help salespeople find viable leads by analyzing the buying histories of companies. Users add data from their sales transactions; over time, the additional information improves the database and provides better recommendations, thereby giving users an impetus to participate, according to Oracle.
Mertz was not available for comment Monday. But another industry analyst described the CRM space as a "moveable feast."
"It's a category that's continually expanding its reach. I guess the key question is whether the CRM vendors like Salesforce, Oracle, Microsoft, SAP, et al, will expand into areas which are being developed nicely by niche players or whether they'll continue to be content to partner," said China Martens, an analyst with the 451 Group.
