CRM Competition Causes Dramatic Cut in Software Prices

Good news for public, private organizations implementing or upgrading their CRM apps

Good news for public, private organizations implementing or upgrading their CRM apps

Betheshda, MD — June 3, 2004 — Revenues for 2004 are increasing, 10 to 15 percent, but profits for customer relationship management (CRM) software vendors are decreasing. That's the news presented by CRM strategic advisor Barton Goldenberg, president of ISM Inc. and co-chairman of the DCI CRM Conference & Exhibition held last week at Jacob Javitz Convention Center.

Goldenberg painted a picture for the U.S. CRM industry with revenue for software and implementation services projected to exceed $13 billion by year's end. The federal and state government make up the market segment with the highest growth at 30 percent for 2004 with $2 billion in sales.

Growing competition is impacting the per user software price with a 20 percent decrease in 2004. As an example, Goldenberg said an average of $1,200 per user typical in 2003 has steadily declined to below $1,000 per user in 2004 and by year's end is expected to drop to $800 per user.

"Even during the depressed economy of 2001 through 2003, CRM managed to stay viable, and now with the dramatic growth of CRM in the public sector we see significant financial improvement for the industry," said Goldenberg, whose firm works with global companies and government organizations implementing CRM. "The good news is for public and private organizations implementing or upgrading their CRM applications; prices are much lower due to companies around the world competing for a piece of the CRM pie."

Goldenberg praised the level of software options, based on ISM's 2004 Top 15 CRM Software Awards for Enterprise and Small & Medium Business (SMB). The Top 15 for each category are featured in ISM's 12th edition of The Guide to CRM Automation, and are available online and in CD-ROM format.

Founded in 1985, ISM Inc. offers strategic advisor services and research to organizations planning and implementing CRM and real-time enterprise initiatives. ISM private sector clients include AAA Mid-Atlantic, ExxonMobil, IBM, McGraw-Hill, Nike, and United Way of America; ISM's government clients include Communications Security Establishment, National Reconnaissance Office, National Security Agency, and the U.S. Postal Service.