CRM market grows 12.5% in 2008

New Delhi: Worldwide CRM market revenue totaled $9.15 billion in 2008, a 12.5 percent increase from 2007 revenue of $8.13 billion, according to Gartner. 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. Actual market growth was moderated by a stronger dollar but reflects higher contributions from emerging markets,” said Sharon Mertz, Research Director, Gartner.

Software as a service (SaaS) continued to drive the market forward, representing nearly 20 percent of total CRM software market revenue in 2008, up from just over 15 percent 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 percent of worldwide CRM software revenue in 2008, but this is down from a 25.5 percent share in 2007. Microsoft experienced the strongest growth rate among the top five vendors, as its revenue increased 75 percent in 2008.

While the CRM market remains highly concentrated in Western economies, emerging markets are growing rapidly and now account collectively for nearly 16 percent of the worldwide market, up from approximately 13.8 percent 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 percent and 31.6 percent, respectively.

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