Gartner Says Worldwide Customer Relationship Management Software Market Will Grow 14 Percent In 2007
As enterprises continue to invest in front-office applications, worldwide customer relationship management (CRM) software revenue is forecast to exceed $7.4B 2007, up 14 percent from $6.5B in 2006, according to Gartner, Inc.
The strong performance of the CRM software market is being fueled by growth across all subsegments and the explosive growth of software as a service (SaaS) solutions within the sales subsegment. In 2006, SaaS represented 12 percent of total CRM software revenue, and it is on track to reach nearly 14 percent in 2007. By year-end 2007, SaaS is forecast to represent more than $1B in CRM software revenue, growing at more than double the rate of the total CRM software market.
"The sustained performance of major on-demand solutions providers is driving the growth in the SaaS segment," said Sharon Mertz, research director at Gartner. "As businesses refresh existing sales force automation systems to align with their renewed drive for business and revenue growth, we expect this to push sales software to become the largest CRM subsegment by 2011."
The worldwide CRM software market will experience healthy growth through 2007; however growth will slow in the next 12 to 18 months because of the downstream impact of economic conditions, but also because the market size overall will increase. The market is forecast to grow to more than $11.4B in total software revenue by 2011 (see Table 1).
"In late 2008 and 2009, forward momentum will return to the market as buying decisions become clearer and customers undertake platform migrations to service-oriented architectures," said Ms. Mertz. "Increasing demand for analytics, marketing automation and a focus on SaaS solutions will also drive growth during this time. Buyer application selection will continue to focus on areas showing rapid return on investment in all CRM subsegments."
Table 1
Worldwide: Forecast for Total CRM Software Revenue 2007 Through 2011
(Millions of Dollars)
Note: Gartner defines total software revenue as revenue generated from new licenses, updates, upgrades, subscriptions and hosting, technical support, and maintenance. Professional services, training and certification, and hardware revenue are not included in total software revenue. Source: Gartner (August 2007))
Additional information is available in the report "Forecast: CRM Software Worldwide, 2006-2011 Update." This report examines the state of the worldwide CRM software market and looks at what trends are developing and provides a full forecast for the market. The report is available on Gartner's Web site at www.gartner.com/DisplayDocument?ref=g_search&id=512197&subref=simplesearch.
Gartner analysts will examine additional trends in the CRM market at the Gartner Customer Relationship Management Summit taking place September 17-19 in Hollywood, Florida. The Gartner CRM Summit 2007 hits the critical spot between strategic planning and tactical advice for IT organizations as they look to grow their customer base, cross-sell to established customers, segment and retain their most valuable customers and service them more efficiently. Additional information is available at www.gartner.com/us/crmsummit. Members of the media can register by contacting Christy Pettey at christy.pettey@gartner.com.
About Gartner
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SOURCE: Gartner