The popularity and acceptance of hosted customer relationship management (CRM) applications is growing, according to a new report, 'Hosted CRM Popularity Continues to Grow', published by market analysis firm Aberdeen Group.
Hosted CRM applications - delivered as services via the internet rather than by conventional software delivery models - are gaining acceptance, with 35% of survey respondents saying they already use hosted CRM products, and 85% of respondents saying they would evaluate hosting as they enter the market for CRM solutions.
"Application hosting in the CRM market is clearly showing signs of robust growth," said Denis Pombriant, author of the report and vice president and research director for Aberdeen's CRM practice. "Our data also suggest that companies are looking beyond the current slow-down to a period of more vigorous growth, and that application hosting is an important component of such growth strategies."
The report also notes, however, that the CRM industry faces challenges in the years ahead. The sluggish economy and the changing make-up of the CRM market is likely to force vendors to find better, cheaper, and faster ways to provide the benefits of CRM to budget-constrained buyers who may also be sceptical of the technology's ability to deliver significant value.
"Hosting is a major challenge to this industry, which is accustomed to selling software licenses at high margins, in addition to a 'sibling' services industry that frequently charges two to three times the license fee for implementation services," added Pombriant. "But for hosting to become a credible alternative to licensing, customers must be able to find long-term value in the solutions."
The research for the report was conducted in conjunction with CRM portal web site, RealMarket. More than 150 RealMarket subscribers - considered to be a statistically significant group - completed Aberdeen's survey.