In the most damning sign of the times, the CRM market experienced its first year of negative growth in 2002, according to a report by AMR Research .
Salesforce autuomation and call centre technology firms performed the best according to AMR. while partner relationship management and marketing analystics firms lost ground. But AMR predicts that companies that offer tools with a marketing focus will begin to recover this year, citing Pivotal and Epiphany as cases in point.
Overall the CRM software market will grow from just under $10 billion this year to $14.5 billion in 2007. Some 40 per cent of spending on CRM went on licences last year, followed by 35 per cent on integration, customization and other professional services. Bad news for the ASP community though, as a mere 2 per cent was spent on applications hosting.
AMR is betting on SAP growing faster than any other firm - 24 per cent per annum - to bring it close to market leader Siebel. But at the moment the top ten CRM vendors only account for 41 per cent of the market. AMR also predicts that Microsoft has the opportunity to dominate the market for CRM software among small- to mid-size enterprises.
While the majority of customer markets cut back on CRM spending in 2002, only the public sector differed by increasing its annual spending by 64 per cent.