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Latest market figures prove CRM tech is all the rage

14th May 2014
Editor MyCustomer
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We already know CRM budgets are on the rise, and the software industry appears to be benefiting gratefully, experiencing a sharp increase of 13.7% market growth through 2013.

According to new figures from Gartner, the total spend on CRM was $20.4 billion last year, up from $18 billion in 2012.

Software as a Service (SaaS) providers were cashing in most, with total revenue for SaaS-based CRM technology representing 41% of the overall market. Salesforce.com continues to be pack-leader in terms of revenue in this space, heading up SAP and Oracle with a 16.1% market share.

"High levels of end-user investment in digital marketing and customer experience initiatives were the primary growth drivers of the market in 2013," says Joanne Correia, research vice president at Gartner. "CRM will be at the heart of digital initiatives in coming years. This is one technology area that will get funding because digital business is critical for companies to remain competitive."

CRM tech solutions have long been cited as central to businesses being able to successfully link data and campaigns through different departments, in a bid to improve customer experience. However, complexity and widely-reported failures in previous years have led to cynicism in some industries about the benefits of implementing new systems.

Gartner has previously highlighted the issues of businesses buying into CRM initiatives without a clearly defined CRM strategy, but with SaaS reducing the cost of implementation and allowing many companies the opportunity to trial systems over a longer timeframe, the market appears to have finally taken off in many parts of the globe.

Western Europe is showing the strongest sign of growth in the market (15.2% in 2013 on 2012), however it is North America that continues to drive most revenue (52.9% of 2013 total spend). The two regions together account for 80% of all CRM software spend, however, with infrastructure in most businesses said to be more mature in terms of being able to cope with SaaS / cloud computing deployments than other regions.

Asia/Pacific and Greater China was cited as an example of this, with the region showing less growth in comparison, but still reaching double-digit growth rates. Gartner has specified that these particular regions are yet to have matured, however, and are currently impacted by a slowing macro-economy.

With customer experience now top of many business agendas, the communications, media and IT services industries are the largest spenders on CRM across regions, with manufacturing and banking following, thanks to an increasing need to improve product management and customer services, respectively.    

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