Worldwide sales of customer relationship management (CRM) software topped $23 billion in 2014, a 13% increase over the previous year, according to Gartner. Salesforce.com led the way with an 18% bump to sales of $4.3 billion, followed by SAP at $2.8 billion and Oracle with $2.1 billion.
“Strong demand for software as a service continues, with SaaS accounting for almost 47 percent of total CRM software revenue in 2014,” said Gartner research VP Joanne Correia. “This is driven by organizations of all sizes seeking easier-to-deploy and faster ROI alternatives to modernizing legacy systems.”
The big names in CRM played a fierce game of leveraging new acquisitions to extend their feature sets in 2014, Correia observed. “Price wars started quickly as large vendors fought to keep their installed bases from moving to other vendors and stop the descent of their maintenance revenue,” she said.
The top 10 vendors accounted for more than a 60% share of the CRM business in 2014, according to Gartner, which also detected a pick-up in business among pure-play vendors from organizations bulking up digital marketing and customer experience capabilities.
North America remains by far the largest market for CRM systems, registering more than half of all sales. It was followed by Western Europe with a quarter of the market. The key reason for this lopsided geographical skew is that the cloud infrastructure for SaaS deployment is more mature in these regions.
The communications, media, and IT services industries led CRM software activity in 2014 with more than 23% of buys. Manufacturing concerns, including consumer packaged goods companies, were close behind, Gartner reported.
CRM’s top five, according to Gartner:
2014 Sales (billions) Increase
1.Salesforce $4,269 18.4%
2.SAP 2,809 12.1
3.Oracle 2,115 9.1
4.Microsoft 1,439 6.2
5.IBM 792 3.8