Cross-industry increase of CRM software use: IDC report

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The manufacturing, communications and media, and healthcare industries show the strongest growth in customer relationship management software over the next five years, with compound annual growth rates of 8.1 percent, 8.0 percent, and 7.2 percent, respectively.

This was a key finding from a research study recently published by Framingham, MA-based market intelligence firm IDC.

The report, Americas Customer Relationship Management Software 2005 Vendor Shares: Top 10 Vendors by Vertical Market, said CRM firms that have penetrated into these industries will have the greatest future growth potential in CRM software.

The report also offered its analysis of the top 10 CRM vendors in eight vertical markets for the Americas: communications and media, financial services, government, healthcare, manufacturing, retail/wholesale, utilities and other industries. Market share positioning for CRM software vendors is identified using a vertical segmentation of 2005 revenue.

The report said Siebel, whose revenue is presented separate from its new parent company, Oracle Corp. for comparison purposes, clearly dominates the market. Siebel maintains the largest share of revenue in five of the eight vertical industries.

The acquisition of Siebel by Oracle increases the company's relative strength in each of its first-place industries, but is not sufficient to overtake Amdocs in the communications and media space, Reynolds and Reynolds in the retail automotive sector, or the increasing presence of Salesforce.com in other industries.

The other industries category includes professional and consumer services, transportation and resources and others that have a significant share of small businesses particularly suited to on-demand applications.

For vendors looking to enter a new vertical market within the CRM market or maintain their existing positioning, the report recommends that vendors do the following:

--Identify whether the core of their vertical strategy is to provide a range of solutions that address needs specific to each industry or whether they plan to become a vertical expert within a select industry or set of industries.

--For vendors looking to capitalize on the projected growth of the healthcare industry, recognize the high degree of in-house expertise necessary to tap this market.

--Vendors looking to target the financial services industry should consider the complexity of regulatory concerns, which parallels the complexity in the banking and security and investment services industries.

--In manufacturing, firms are dealing with ever increasing globalization. The ability to provide solutions that meet the needs of international organizations is necessary for success in this market.

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