CRM applications market to reach US$11bn by 2008
The worldwide customer relationship management (CRM) applications market will reach US$11.4 billion in revenues by 2008, experiencing a compound annual growth rate (CAGR) of 8.9% over the 2004-2008 forecast period, according to independent market research firm IDC.
According to IDC, Siebel also continues to maintain its leadership position in the worldwide CRM applications market, despite being slightly down on its market share proportions previously held in 2001 and 2002. SAP has effectively established itself in the market and solidly occupies the number 2 position.
Buzzwords live on While return on investment (ROI) and total cost of ownership (TCO) are the key buzzwords that have dominated the market, IDC asserts that they are still important requirements that CRM applications vendors must emphasize. Indeed, IDC believes that ROI and TCO will not go away but may in fact be intensifying as market reality points to an increasing need.
"The environment has fundamentally changed with respect to purchasing patterns, from optimistic buying to increased requirements for a clear return on investment and benefits," said Mary Wardley, vice president of CRM applications research for IDC. "Happily, customers are finding both and are achieving a 'meeting of minds' with suppliers."
Analytics forecast Demonstrating ROI is also rising in importance for conducting sales in the CRM analytics applications market. According to IDC, the science of analytics is becoming increasingly critical in generally accepted customer management strategies. IDC reports that the worldwide CRM analytic applications software market revenues grew by 12.7% to reach a healthy US$908.7 million in 2003. IDC also reports that market concentration is increasing, with the top 5 vendors (by revenue) now representing 44% of the market.
"The consolidation trend in the CRM analytics space is not only due to the rapid growth of vendors such as Siebel, SAS Institute, and NetIQ, but also due to the rapid growth of smaller players like Coremetrics and DoubleClick," explained Robert Blumstein, CRM analytic applications research director for IDC.
The reports The full report, 'Worldwide CRM Applications 2004-2008 Forecast Update and 2003 Vendor Shares: July 2004', examines the CRM applications market and provides vendor revenue and market share data from 2001-2003, with worldwide market sizing for 2003 and a five-year growth forecast for 2004-2008. An additional IDC report, 'Worldwide Customer Relationship Management Analytics Applications 2003 Vendor Shares: A Market Entering Transition', offers vendor revenue and market share data from 2001-2003. Both documents provide profiles of the leading vendors participating in the market, and can be purchased directly from IDC.
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