Analyst firm Gartner has reported the worldwide customer relationship management (CRM) software market grew to $23.2 billion in 2014, with the top 10 CRM vendors accounting for more than 60 per cent of market share.
“Large vendors leveraged their acquisitions to extend their position in new markets and to enrich the depth of their current feature sets in 2014,” said Joanne Correia, research vice president at Gartner. “We saw market consolidation continue, and price wars started quickly as large vendors fought to keep their installed base from moving to other vendors and to stop the descent of their maintenance revenue.”
The top five CRM software vendors were Salesforce, SAP, Oracle, Microsoft and IBM, with only Salesforce and Microsoft making ground on their competitors in the top 10. SAP’s market share slipped slightly from 12.8 per cent in 2013 to 12.1 per cent in 2014.
“Strong demand for software as a service (SaaS) continues, with SaaS accounting for almost 47 percent of total CRM software revenue in 2014,” said Correia. “This is driven by organizations of all sizes seeking easier-to-deploy and faster-ROI alternatives to modernising legacy systems, implementing new applications, or providing alternative complementary functionality.”
Gartner found that infrastructure for cloud/SaaS deployments is most mature in North America and Western Europe, with customer retention and acquisition the main drivers for investment in this region.
While North America continued to generate the bulk of revenue in the CRM market (52.3 per cent), emerging Asia/Pacific grew the fastest at 18.7 per cent in 2014.
From an industry perspective, more than 23 per cent of 2014 CRM spending was in communications, media and IT services, with a focus on large groups using call centre technologies or with mobile field service and sales organisations.
Manufacturing (including consumer packaged goods) was the second top CRM spender, with companies deploying CRM for product and channel management, followed by banking and securities, which is looking to CRM and enhanced analytic capabilities to improve customer service experience and upselling to other financial products.
The analysis comes from Gartner’s report, ‘Market Share Analysis: Customer Relationship Management Software, Worldwide, 2014’, available from http://www.gartner.com/document/3045522.
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