‘Large CRM vendors leveraged their acquisitions to extend their position in new markets and to enrich the depth of their current feature sets’
The worldwide customer relationship management (CRM) software market totalled $23.2 billion in 2014, up 13.3 percent from 20.4 billion in 2013, according to industry analyst Gartner.
“Large CRM vendors leveraged their acquisitions to extend their position in new markets and to enrich the depth of their current feature sets in 2014,” said Joanne Correia, research vice president at Gartner.
“We saw market consolidation continue, and price wars started quickly as large vendors fought to keep their installed base from moving to other vendors and to stop the descent of their maintenance revenue.”
Overall, the top 10 CRM vendors accounted for more than a 60 percent share in 2014, or $14 billion, growing 14 percent over 2013. The top 10 vendors in 2014 had very little change in ranking compared with 2013.
However, with the notable exceptions of Salesforce and Microsoft, most vendors in the top 10 only held their positions or they lost share in 2014.
The top five vendors by revenue were Salesforce, SAP, Oracle, Microsoft and IBM in that order.
“Strong demand for software as a service (SaaS) continues, with SaaS accounting for almost 47 percent of total CRM software revenue in 2014,” said Correia. “This is driven by organisations of all sizes seeking easier-to-deploy and faster-ROI alternatives to modernising legacy systems, implementing new applications, or providing alternative complementary functionality.”
North America and Western Europe represented 78.6 percent of all CRM software spending, and both saw mid-double-digit growth in 2014.
More than 23 percent of 2014 CRM spending was in the communications, media and IT services industries, because they focus on large groups using call centre technologies, and have mobile field service and sales organisations, said Gartner.
Manufacturing (including consumer packaged goods) is not far behind, with companies in this industry using CRM for product and channel management. Third-ranked is banking and securities, in which customer service experiences and upselling to other financial products are core to growth, including through enhanced analytic capabilities, Gartner said.