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IDC: World CRM Application Revenue to Hit $11.4B in 2008

The global CRM applications market will reach $11.4 billion in revenue by 2008, with a compound annual growth rate of 8.9 percent over the 2004-08 forecast period, according to research released this week from IDC, Framingham, MA.

IDC's report, “Worldwide CRM Applications 2004-2008 Forecast Update and 2003 Vendor Shares: July 2004,” examines the customer relationship management applications market. It provides vendor revenues and market shares from 2001-03, worldwide market sizing for 2003 and a growth forecast for 2004-08.

The report found that Siebel maintained its leadership worldwide, though down from market shares achieved in 2002 and 2001. SAP has established itself in this market and occupies the No. 2 position.

Though buzzwords such as return on investment and total cost of ownership have saturated the marketplace, they remain requirements that CRM vendors still must emphasize, the report said. ROI and TCO will not go away anytime soon, and may be intensifying as market reality points to an increasing need, IDC said.

“The environment has fundamentally changed with respect to purchasing patterns, from optimistic buying to increased requirements for a clear return on investment and benefits,” said Mary Wardley, vice president of IDC's CRM applications research. “Happily, customers are finding both and are achieving a meeting of the minds with suppliers.”

Demonstrating ROI is also rising in importance for conducting sales in the CRM analytics applications market. According to IDC, analytics are becoming critical components of generally accepted customer management strategies.

IDC reports that worldwide CRM analytic applications software market revenue grew 12.7 percent to $908.7 million in 2003. Market concentration is increasing as the top five vendors by revenue represent 44 percent of the market, IDC said.

“The consolidation trend in the CRM analytics space is not only due to the rapid growth of vendors such as Siebel, SAS Institute and NetIQ, but also due to the rapid growth of smaller players like Coremetrics and DoubleClick,” said Robert Blumstein, research director for IDC's CRM analytic applications research.

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