Customer management applications rebounded in 2003, growing by 4% over 2002, and the market is expected to outstrip other enterprise application categories this year by growing some 6%, according to new market statistics published by AMR Research.
AMR's report, entitled 'Customer Management Applications Report 2003-2008', also revealed the emergence of SAP as the new market leader for the customer management applications category.
In researching the report, AMR surveyed more than 100 enterprises (all with annual revenues of up to US$5 billion) about their customer management budgets, investments, priorities and goals for 2004 and 2005. For the purposes of the research, 'customer management' was defined as being those business processes touching sales, marketing, customer service, price management and customer analytics.
Market forecast
"The overall customer management market will see incremental growth through to 2008, with a five-year Compound Annual Growth Rate (CAGR) of 8%," said Laura Preslan, research director for AMR Research and lead analyst for the report. "Customer analytics, price management, systems integration, and Application Service Provider (ASP)-based hosted applications (such as 'CRM as a service') will account for the bulk of growth."
Many of the major solutions providers saw growth in this category during 2003, including PeopleSoft (61%, based on increased PeopleSoft customer management sales as well as the acquisition of J.D. Edwards' customer base), and Microsoft CRM which topped the growth chart with a 94% improvement (leaping to number 10 from number 18 the previous year).
Market leaders
"Perhaps best-known for Enterprise Resource Planning (ERP) software for large, global manufacturers, SAP's growing lead in customer management demonstrates the German company's ability to scale the functionality of its products, sales, and footprint," noted Preslan.
While Siebel's customer management revenue is reported to have decreased by 17%, SAP increased its revenue for the category by 30%. And although Siebel's 2003 customer management revenues were still higher than SAP's (at US$1.29 billion compared to US$1.28 billion for SAP), AMR Research predicts that SAP will grow within the category at the rate of 12% in 2004, compared to 3% for Siebel.
From 1998-2000, customer management was the fastest-growing market segment with double-digit growth rates. When the technology 'bubble' burst, customer management was among the enterprise software segments affected. According to AMR, revenues for the entire customer management software market totalled some US$9.93 billion in 2003, representing a total market growth of 4% over 2002's figure.
Key findings
Among the report's other key findings were:
- Companies with less than US$1 billion in revenue represent the largest growth segment for customer management.
- PeopleSoft, Siebel, and SAP are the top three most widely used customer management application providers among survey respondents.
- Web self-service is the highest priority overall among decision-makers who want to improve business processes.
- Adoption challenges and defining ROI continue to be a struggle, with two-thirds of companies citing problems in those areas.
- Companies using a CRM application are more likely to upgrade their existing system than companies that have deployed an ERP solution.
The report is part of AMR Research's Market Analytix Market Sizing Report Series, which aims to provide insights and guidance for the major enterprise application software segments, including supply chain management (SCM), enterprise resource planning (ERP), product lifecycle management (PLM), human capital management (HCM), and procurement and sourcing applications.
|
More Info: |