CRM application pricing has changed dramatically during the past 10 years, with organizations commonly paying $1,000 to $1,500 per licensed user in 2009 compared with over $3,000 at its peak in 2000. The most common pricing model is still per user, but process-based pricing, fuelled by service-oriented architecture and software as a service will become commonplace by 2020, up from less than 1 percent of the time in 2009.
The shift to SaaS will see nearly 50 percent of all field sales applications be delivered in this way by 2012, compared with less than 1 percent in 2000. However, the percentage of all CRM applications delivered through SaaS will be only 25 percent in 2012, and 40 percent in 2020. As competition for SaaS CRM intensifies, pricing will drop from $800 per user per year in 2009 to near $500 by 2020.
In terms of architecture, CRM applications have fully transitioned from client-server but there is a notable lag between availability and adoption. “Fewer than 10 percent of organizations are currently running the latest version of their CRM suite providers’ technology. This will change to 50 percent of organizations running on the latest versions by 2020 as SaaS applications force users onto the latest releases,” Mr. Thompson added.
The worldwide CRM application software market grew at a rate of nearly 90 percent in 2000 then collapsed in 2001 bottoming out in late 2003. Since 2004, the market has grown steadily, at 11 percent to 23 percent per year. It is set for 10 percent growth from 2007 to 2012, despite the recession in 2009 and knock-on in 2010. Gartner estimates that total revenue for CRM application software market in 2008 amounted to nearly $9 billion worldwide and will reach $10 billion in 2009, a 7 percent per cent year-on-year increase. This includes licenses, maintenance and subscription revenues.
While the vendor landscape has changed dramatically, it is likely to change beyond recognition with the number of vendors leaving the market outpacing the number of new entrants. The five largest CRM application vendors are estimated to represent almost 60 percent of the market in 2008. Gartner estimates that three or four large vendors will remain with an aggregate of more than 50 percent market share in 2020.
Additional information is available in the Gartner report “Looking at CRM in 2000 Foretells Its Future in 2020."
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