I'll See Your CRM, and Raise You 84 Percent

CRM apps continue to gain market share

Framingham, MA  August 15, 2001  Customer relationship management (CRM) applications revenues grew to new heights in 2000. According to IDC, the CRM applications market increased 84 percent in 2000 to $6.2 billion. By 2005, this market will generate over $14 billion in revenues. IDC says new products, companies, and technologies are driving growth in this industry.

"The rise of new market players and products indicates the many fronts on which end users are fighting the CRM battle," said Mary Wardley, program director of IDC's CRM Applications and eCommerce Applications Software programs. "Despite the current economic downturn, end-user organizations continue to rate CRM as critical to their organizations ongoing business strategy. End-user response to the market condition is to plan an ongoing implementation strategy over an extended period of time rather than purchase the total solution up front. This will fuel CRM applications growth over a longer period of time."

Other key findings include:

  • Robust growth was experienced across all three markets  sales automation applications, marketing automation applications, and customer service and contact center applications  in 2000, with no one market showing revenue growth below 70 percent.

  • Sales automation was once again the largest of the CRM applications market, garnering over 42 percent  or $2.6 billion  of the worldwide CRM application revenues in 2000. Marketing automation applications experienced the greatest growth but remains the smallest of the three markets in terms of revenue.

  • According to IDC, Siebel maintained its stranglehold in this market, outperforming all other competitors by a huge margin. Siebel's market share increased from its standing in 1999 to 23 percent in 2000. The next nearest competitor grabbed a 5.5 percent market share.

  • Regionally, North America will continue to dominate the worldwide market for CRM applications, with nearly $8.6 billion in revenue in 2005. However, Western Europe will boast growth bragging rights, increasing its revenues at a 22 percent clip from 2000 to 2005. By comparison, North American CRM revenues will increase at a lower compound annual growth rate.

"CRM revenues in Western Europe have accelerated due to an increased understanding of CRM issues and the internationalization of product offerings," Wardley said.

IDC's bulletin, Worldwide CRM Applications Market Forecast and Analysis Summary, 20012005, forecasts CRM applications revenues by region and operating environment through 2005. Additionally, it analyzes the market's overall performance in 2000 and compares the performance of leading suppliers in 2000 with their performance in 1999.