CRM revenue grew by 12.5 percent in 2008

SaaS was the main market driver says Gartner

Worldwide CRM market revenue totalled $9.15 billion in 2008, a 12.5 percent increase from 2007 revenue of $8.13 billion, according to Gartner.

Analysts said that market growth was driven by enterprise investments in technologies focused on customer retention, analytics and on-demand solutions.

“Despite financial market volatility, the worldwide CRM market enjoyed its fifth consecutive year of double-digit growth as businesses continued to invest in solutions across all subsegments,” said Sharon Mertz, research director at Gartner. “Actual market growth was moderated by a stronger dollar but reflects higher contributions from emerging markets.”

Software as a Service (SaaS) continued to drive the market forward, representing nearly 20 percent of total CRM software market revenue in 2008, up from just over 15 percent in 2007. Interest in social networking and social software also escalated in 2008 as businesses were confronted with the sales, marketing, and serviceability impact of increasing consumer participation in online forums.

SAP continued to be the market leader accounting for 22.5 percent of worldwide CRM software revenue in 2008, but this is down from a 25.5 percent share in 2007.

Gartner said that most vendors remain cautiously optimistic for continued growth for the worldwide CRM market. “Investments in technologies which enhance productivity, provide better visibility and insight into customer behaviors and grow online commerce, sales and marketing activities are expected to grow through 2010,” said Ms. Mertz. “However, while we expect overall CRM growth prospects to remain positive in 2009 we do anticipate them declining to mid single-digits due to continued economic uncertainty.”