CRM boom sparked by digital marketing, customer experience projects

Customer Relationship Management (CRM) software is going through something of a boom and, if the analysts at Gartner are right, it is a boom that shows no sign of ending anytime soon.

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The analyst firm said that investment in digital marketing and customer experience initiatives were the primary growth drivers last year.

From a technical point of view, growth is being fuelled by the increasing demand for software-as-a-service (SaaS) applications which represented "more than 41 per cent of CRM total software revenue in 2013", according to Gartner.

This was driven by "organisations of all sizes seeking easier-to-deploy alternatives to replace [their] legacy systems, implement net-new applications or provide alternative complementary functionality".

The market for CRM software continues to be dominated by the larger players, with the top five CRM vendors accounted for 50 per cent of CRM software revenue last year.

Salesforce.com continued to be the largest vendor overall in the CRM market, with 16.1 per cent of the market.

SAP remained in the number two position for overall CRM space, but is still the leader in terms of revenue and market share for what Gartner calls the" subsegments" of customer service and e-commerce. 

 CRM Software Spending by Vendor, Total Software Revenue Worldwide,

2013 (Millions of Dollars)

Source: Gartner (May 2014)

Looking at the regions, Western Europe had strong growth of 15.2 per cent in 2013, and North America continued to drive the bulk of the revenue share (52.9 per cent) for the overall CRM market. These two regions represent almost 80 per cent of all software spending on CRM technologies.

The way Gartner sees it, customer acquisition and retention continue to be the main drivers behind the continued success of CRM and are the key drivers for cloud/SaaS deployments.

"CRM will be at the heart of digital initiatives in coming years," said Joanne Correia, research vice president at Gartner. "This is one technology area that will get funding because digital business is critical for companies to remain competitive."

While seeing some growth, the emerging Asia/Pacific and Greater China regions did not experience the same levels of growth as other regions, according to Gartner, but they still reached double-digit growth rates.

Their numbers were also affected by other factors such as "a slowing macro-economy, influenced by notable depreciation of some local currencies such as the Indian rupee and the Indonesian rupiah", Gartner said.

The communications, media and IT services vertical industries are still the largest spenders on CRM because of their focus "on large groups using call centre technologies". 

Detailed analysis is available in the report Market Share Analysis: Customer Relationship Management Software, Worldwide, 2013.

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