Aberdeen Group report shows 85 percent of survey respondents would evaluate hosting as they enter market for customer relationship management apps
Boston September 8, 2003 The popularity of hosted customer relationship management (CRM) applications those delivered as services via the Internet rather than by conventional software delivery models continues to gain acceptance in the marketplace, according to a new report by Aberdeen Group, an IT market analysis and consulting firm.
According to the report, titled "Hosted CRM Popularity Continues to Grow," 35 percent of survey respondents said they already use hosted CRM products, and 85 percent of respondents said they would evaluate hosting as they enter the market for CRM solutions.
"Application hosting in the CRM market is clearly showing signs of robust growth," said Denis Pombriant, vice president and research director in Aberdeen's CRM practice and author of the report. "Our data also suggests that companies are looking beyond the current slowdown to a period of more vigorous growth, and that application hosting is an important component to such growth strategies."
The report also notes, however, that the CRM industry faces challenges in the years ahead. The sluggish economy and the changing complexion of the CRM marketplace will force vendors to find better, less expensive and faster ways to provide the benefits of CRM to budget-constrained buyers who may be skeptical of the technology's ability to deliver value.
"Hosting is a major challenge to an industry accustomed to selling software licenses at high margins, as well as a sibling services industry that frequently charges two or three times the license fee for implementation services," Pombriant continued. "But for hosting to become a credible alternative to licensing, customers must be able to find long-term value in the solutions."
Research for the report was conducted with RealMarket, a CRM portal site with more than 30,000 readers. Over 150 RealMarket subscribers completed the Aberdeen survey.