CRM applications to hit $14 billion by 2005

Today, Dec 2001

According to the research firm IDC, Customer Relationship Management (CRM) applications revenues grew 84% in 2000 to $6.2 billion. The research suggests that by 2005, this market will generate $14 billion in revenue. New products, companies and technologies are driving growth in this industry.

"The rise of new market players and products indicates the many fronts on which end users are fighting the CRM battle," IDC reported. "Despite the economic downturn, end-user organizations rate CRM as critical to their organizations' business strategy. End-user response to the market condition is to plan an implementation strategy over an extended period of time rather than purchase the solution up front. This will fuel CRM applications growth over a longer period."

Robust growth was experienced across all three markets (sales automation applications, marketing automation applications, and customer service and contact center applications) in 2000, with no market showing revenue growth below 70%. Sales automation was the largest of the CRM applications markets, garnering 42%-$2.6 billion-of the worldwide CRM application revenues in 2000. Marketing automation applications experienced the greatest growth but remained the smallest of the three markets in terms of revenue.

The largest vendor dedicated to the CRM space is Siebel, with a 23% market share in 2000. The next competitor had a 5.5% market share. According to IDC, North America will dominate the worldwide market for CRM applications, with $8.6 billion in revenue in 2005. However these applications are growing fastest in Western Europe, which should increase its revenues by 22% from 2000 to 2005.