CRM market in UAE to reach US$90 million in 2008

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By: Wise Marketer Staff |

Posted on August 13, 2003

Demand for customer relationship management (CRM) strategies in the United Arab Emirates (UAE) is expected to increase substantially in the next six years, to boost the local CRM application market size to US$90 million in 2008, according to a new study by Madar Research Group.

Madar's forecast is based on a projected compound annual growth rate (CAGR) of 20% over the period 2003 - 2008, and includes the value of CRM application acquisition, licensing, and related external services. External services considered in the forecast included consultation, installation, integration, and upgrades. The forecast market value also includes the application service provision (ASP) segment but excludes hardware infrastructure and related services.

This projected growth in the UAE's CRM market appears contrary to the global scene, in which CRM spending is instead expected to undergo a downturn according to other international research firms, including Meta Group (which has forecast a 10% decline in 2003).

Gaining momentum
Over the past two years, CRM has begun to gain momentum in the fast-developing and technology focused markets of the Gulf Cooperation Council (GCC), where Madar's predictions are for less than 2% of SMEs having a specialised CRM application in place. Meanwhile, UAE remains ahead of other markets by an estimated 6 months to a year in terms of CRM adoption.

"As more of the larger enterprises and customer-focused businesses start to gain insight into the various benefits of CRM, and appreciate that the long-term returns justify making the relevant investment," explained Madar's president, Abdul Kader Kamli, "growth in the UAE's CRM market is expected accelerate in the next two to three years, followed by a stabilisation."

Market drivers
According to Madar, the need to increase customer satisfaction and to adopt e-business are the top two market drivers for CRM adoption in the UAE, while vertical markets are inhibited by a lack of knowledge, and by the price of software and hardware.

Among those most likely to adopt CRM in the UAE are banks, telecommunication providers, energy utilities, airlines, and some government departments, and the travel and tourism industry is emerging as one of the main growth sectors, according to the study.

The Madar Research study, which is based on a survey of all major CRM vendors in the UAE, covers key market accelerators and inhibitors, demand shift for CRM modules (2003 - 2005), ASP licensing options, a 2002 market estimate and 2003 - 2008 forecasts, leading client industries and growth sectors, UAE market characteristics and trends, and major installations.

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