Gartner: CRM Market Showing Growth

July 21 - 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 Inc.

Market growth was driven by enterprise investments in technologies focused on customer retention, analytics and on-demand solutions. Software as a service 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.

SAP, Oracle and Salesforce.com were market leaders accounting for 22.5, 16.1 and 10.6 percent, respectively, of worldwide CRM software revenue in 2008. SAP ‘s growth was down -.8 percent, while Microsoft revenues were up 75 percent to a 6.4 percent market share. Gartner said that most vendors remain cautiously optimistic for continued growth for the worldwide CRM market.

“Investments in technologies which enhance productivity, provide better visibility and insight into customer behaviors and grow online commerce, sales and marketing activities are expected to grow through 2010,” said Sharon Mertz, research director at Gartner. “However, while we expect overall CRM growth prospects to remain positive in 2009, we do anticipate them declining to mid single-digits due to continued economic uncertainty.”

Gartner recommends strategies that drive customer value creation, such as:

Aligning products, services and contractual agreements to enable customer business imperatives of higher client acquisition, retention and satisfaction.
Continuing to offer creative terms to maximize revenue potential and enable businesses to consumer critical products and services.
Extending application vertical-market functionality, whether by in-house development, acquisition or partnership agreements to take advantage of key verticals or government stimulus packages.
Focusing product offerings on applications and technologies that provide customers with tools and capabilities to increase visibility on customer requirements and behaviors.