So another year over. It doesn't seem like 12 months since we were wondering what would lie ahead in 2007. So what was it like then? Did it all turn out as we expected? And as 2008 looms, is the CRM market in a healthy place?
We started 2007 with Datamonitor announcing that the CRM market was still growing. In 2006, the global CRM software market was worth just under $3.6 billion in licence revenues. This will reach $6.6 billion by year end 2012, growing by a compound annual growth rate of 10.5 percent.
The telco industry was set to continue to be the heaviest investor in CRM technologies along with energy and utilities and financial services sectors although investment by healthcare, public sector and life sciences firms was expected to ramp up.
The small and medium enterprise (SME) sector was also expected to boom. In 2006, CRM application spending by enterprises with less than 1,000 employees accounted for one third of all licenses sold. By 2012, however, the sector will account for over 42 percent of the market.
That increased interest in all things SME would be seen strongly in SAP's announcement of its latest push down into that market via the on-demand model, but also in the strong performances of the leading software as a service (SaaS) vendors. “Although this implies that complex solutions for larger organisations will still account for the majority of CRM revenue, smaller CRM deployments will be increasingly important,” said Vuk Trifkovic, Datamonitor technology analyst and author of the study.
"Ongoing consolidation in the independent BI market has left a diminishing pool of potential acquirers and targets. Of those who might acquire, Teradata, HP or even EMC could all feasibly be in the frame." Helena Schwenk of analyst house Ovum
Consolidation in the applications market continued apace, with this year's hotspot being the business intelligence (BI) sector. According to a study by Saugatuck Technology earlier this year, BI was named as the top spending priority by IT executives, so there's lots to play for in the sector. Hot on the heels of Oracle’s purchase of Hyperion and SAP’s ongoing purchase of Business Objects, IBM snapped up the last major BI pureplay Cognos, meaning that there are now precious few independent BI-type firms such as Informatica and SAS.
There's probably more to come. "What next for the BI market?" asked Helena Schwenk of analyst house Ovum. "Ongoing consolidation in the independent BI market has left a diminishing pool of potential acquirers and targets. Of those who might acquire, Teradata, HP or even EMC could all feasibly be in the frame.
"However, the most likely of these is HP. The company has some gaping holes in its BI and data integration technology stack that could be significantly boosted by an acquisition and provide a nice complement to its fledgling Neoview data warehousing business. Of the remaining public pure play vendors the potential candidates could be Microstrategy, Panorama SPSS or Informatica. Given the heady market activity of the last few months a combination of one or more of these can not be ruled out.”
This year also saw three vendors tighten their grips on the CRM sector. According to Gartner Group there are only three CRM vendors that really count in the customer service contact centre space. Oracle's Siebel application was the sole vendor in the leader's section for Gartner’s Magic Quadrant for CRM Customer Service Contact Centres - although Gartner predicts that Microsoft and Salesforce.com will be the most influential vendors for customer service applications by 2009.
For part two of Stuart Lauchlan's overview of CRM in 2007, click here.