Voices of CRM

Jul 14 2011   1:52PM GMT

CRM buyers likely to benefit from market upswing

Rosemary Cafasso Profile: Rosecafasso

If you are in the market for CRM software, you are in a good spot. Two analysts firms are predicting plenty of growth and lots of healthy competition – good news if you can go shopping.

Recent market projections from both Gartner Inc. and International Data Corp (IDC) indicate it is all up from here in the CRM segment, or it is until at least midway through this decade.

Gartner predicts that the CRM segment of the software as a service market (SaaS) should hit about $3.8 billion this year, up from $3.2 billion in 2010. That total puts CRM in a lead position in the overall SaaS market, which the research firm said should generate about $12.1 billion in revenue overall. The market total represents a nearly 21% improvement from a year ago.

Further, Gartner said it anticipates the overall SaaS market to hit $21.3 billion in revenue in 2015.

The Gartner research shows that CRM is leading the SaaS pack because much of the earlier hesitation about moving customer systems off site and into the hands of a third-party provider has dwindled.

Worries about security and availability are giving way to a comfort level, in part because this market segment is no longer brand new, Gartner noted. It is also the result of the increasing competition in the CRM space where “megavendors’’ are now cloud advocates and are therefore giving the SaaS model even more legitimacy, Gartner added.

Meanwhile, IDC is forecasting the CRM applications market will top $18 billion this year, up from $16.5 billion in 2010. The IDC results include applications sales in both on-demand and on-premise markets and cover customer service, marketing, sales applications and contact center software.

IDC said it expects the CRM industry to remain a “vibrant market,’’ in part because customers are looking to CRM vendors to help them with social networking and social analytics.

Even the contact center market, which has experienced a “modest’’ decline last year, is expected to turn around and could report a 5% improvement in revenues for 2011.

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