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Gartner Says Worldwide CRM Market Grew 12.5 Per Cent in 2008

Growth Driven by Technology Focused on Customer Retention, Analytics and On-Demand Solutions

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Worldwide CRM market revenue totalled $9.15 billion in 2008, a 12.5 per cent increase from 2007 revenue of $8.13 billion, according to Gartner Inc. Analysts said that market growth was driven by enterprise investments in technologies focused on customer retention, analytics and on-demand solutions.

"Despite financial market volatility, the worldwide CRM market enjoyed its fifth consecutive year of double-digit growth as businesses continued to invest in solutions across all sub-segments," said Sharon Mertz, research director at Gartner. "Actual market growth was moderated by a stronger dollar but reflects higher contributions from emerging markets."

Software as a Service (SaaS) continued to drive the market forward, representing nearly 20 per cent of total CRM software market revenue in 2008, up from just over 15 per cent in 2007. Interest in social networking and social software also escalated in 2008 as businesses were confronted with the sales, marketing, and serviceability impact of increasing consumer participation in online forums.

SAP continued to be the market leader accounting for 22.5 per cent of worldwide CRM software revenue in 2008 (see Table 1), but this is down from a 25.5 per cent share in 2007. Microsoft experienced the strongest growth rate among the top five vendors, as its revenue increased 75 per cent in 2008.

While the CRM market remains highly concentrated in Western economies, emerging markets are growing rapidly and now account collectively for nearly 16 per cent of the worldwide market, up from approximately 13.8 per cent in 2006. Although both North America and Europe underperformed in terms of CRM market growth in 2008, their share of the market remained high at 52.5 per cent and 31.6 per cent, respectively.

Overall market share of each CRM sub-segment shifted slightly in 2008, with sales remaining as the largest sub-segment, representing 42.8 per cent of the market and enjoying the highest growth of 14.7 per cent. Marketing automation also continued to grow in 2008, with a 10.4 per cent increase, representing 20.6 per cent of the CRM market. Customer service and support represented 36.6 per cent of the CRM software market, as this segment grew 11.2 per cent in 2008.

Gartner said that most vendors remain cautiously optimistic for continued growth for the worldwide CRM market. "Investments in technologies which enhance productivity, provide better visibility and insight into customer behaviours and grow online commerce, sales and marketing activities are expected to grow through 2010," said Ms Mertz. "However, while we expect overall CRM growth prospects to remain positive in 2009 we do anticipate them declining to mid single-digits due to continued economic uncertainty."

Ms Mertz advised vendors that they can benefit from strategies that drive customer value creation, which include:

- Aligning products, services and contractual agreements to enable customer business imperatives of higher client acquisition, retention and satisfaction.
- Continuing to offer creative terms to maximise revenue potential and enable businesses to consumer critical products and services.
- Extending application vertical-market functionality, whether by in-house development, acquisition or partnership agreements to take advantage of key verticals or government stimulus packages.
- Focusing product offerings on applications and technologies that provide customers with tools and capabilities to increase visibility on customer requirements and behaviours.

Additional information is available in the Gartner report "Dataquest Insight: CRM Software Market Share Analysis, Worldwide 2008." The report is available on Gartner's website at http://www.gartner.com/....

Gartner UK Ltd

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.

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The publisher indicated in each case (see company info by clicking on image/title or company info in the right-hand column) is solely responsible for the stories above, the event or job offer shown and for the image and audio material displayed. As a rule, the publisher is also the author of the texts and the attached image, audio and information material. The use of information published here is generally free of charge for personal information and editorial processing. Please clarify any copyright issues with the stated publisher before further use. In case of publication, please send a specimen copy to service@pressebox.de.