Gartner Dataquest Says Crm Software Vendors Are Struggling Through Difficult Year

EDP Weekly's IT Monitor, Jan 7, 2002

The economic slowdown has had a negative impact on all segments in the software market, and the customer relationship management (CRM) software market is no exception.

Worldwide CRM software revenue is expected to decline 8 percent in 2001, down from 89 percent growth in 2000, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

Worldwide CRM software revenue is projected to reach $3.6 billion in 2001, and the industry's growth rate will remain flat in 2002 as new license revenue will again total $3.6 billion. The market is forecast to grow 10 percent in 2003 to $4 billion.

"The economic slowdown, coupled with the current military action led by the United States, will immediately intensify the weeding out of the weak CRM software companies," said Tom Topolinski, vice president for Gartner Dataquest's Application Software Industry Research group. "Software companies that have large cash reserves, little reliance on investment monies, solid business management and a good return on investment (ROI) proposition will fare best."