Study: Service Automation Software to Reach $4.4B in 2006

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The global service automation software market, worth $2.32 billion in 2001, will grow to $4.4 billion by the end of 2006, according to a Datamonitor report released yesterday.

Western Europe and Asia Pacific are expected to account for $1.2 billion and $337 million, respectively, said the report, "Future of Customer Service Software: North American Service Automation Software Markets to 2006."

North America will lead the industry with an anticipated worth of $2.8 billion.

To stay competitive, the report said, vendors must rethink their business models and discover new ways to add value to existing product portfolios. Datamonitor, for example, said that analytical customer relationship management and knowledge management functionality are the logical additions to existing operational CRM solutions. As firms seek to manage vast volumes of customer data, the demand for these applications likely will rise.

"Given the commoditization of service automation software and the blurring lines between service automation and other software, namely sales automation and portals, we believe that in the future, the eServices market will not exist as a standalone market," said David Spindel, Datamonitor analyst. "In addition, CRM gorilla Siebel will lose some of its dominance as ERP vendors, relatively new to the space, such as SAP and JD Edwards, and older participants like PeopleSoft, increase their share of the service automation software market."

Comprehensive eService suite solutions will increase, the report said, as end-users demand greater depth and functionality to their CRM technology needs. To avoid the risk of being marginalized, vendors also must forge partnerships with systems integrators, consulting companies, complementary software vendors and ASPs.

Finally, increased importance is being placed on the small- to medium-size enterprise market, and it will remain an important market segment over the next five years.

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