SAP refutes report of shrinking CRM market shareby
SAP has dismissed a report that the German software firm is set to lose CRM market share.
According to Seeking Alpha, a free of charge provider of stock market opinion and analysis, SAP currently dominates the $10 billion CRM sector, with a market share of about 22%. But it forecasts that the software business is in danger of losing CRM market share because of its tardy introduction of software-as-a-service offerings and Oracle’s strengthening position in the space.
Based on figures from Trefis, a stock analysis service that breaks down share prices based on the contribution made by companies’ major product lines, CRM software accounts for 15% of the $50 price estimate for SAP’s stock.
However, Seeking Alpha believes that the enterprise application vendor’s share of the CRM space will drop from 22% to 19% by the end of the unspecified Trefis forecast period. Figures also cited from Gartner indicated that SAP’s market share had already fallen from 25.9% in 2005 to 22.5% in 2008.
During the same forecast period, Seeking Alpha expected Oracle’s market share to increase by one percentage point to 17%, Salesforce.com to see a rise from 11% to 15% and Microsoft to grow its slice of the pie from 7% to 10%.
Explaining the shift, the service explained: "SAP has been slow in implementing its software-as-a-service software, Business by Design. It now expects to launch the software by mid-2011 instead of its earlier guidance of 2010, with a target of reaching $1 billion in revenue and customer base of 10,000."
The delay had enabled rivals Salesforce.com and Microsoft to gain a head start over the applications giant, which meant that SAP would "need to work on its SaaS solution aggressively to stop future share declines in the CRM market", Seeking Alpha said.
Another other contributory factor was the fact that Oracle was now in a position to start exploiting the Siebel acquisition it made in 2005. As a result, the firm would see its share of the CRM space grow.
However, SAP has refuted the report, highlighting that neither SAP, Oracle or Siebel state their CRM revenues publicly, and criticising the points of comparison.
"The article mentions BusinessByDesign as one of the reasons why SAP is losing market share. But actually BusinessByDesign isn’t a pureplay CRM solution. It is a full suite of solutions including classical ERP processes like financial management, HR, supply chain as well as CRM. So it is like comparing apples with oranges when talking about BusinessByDesign," an SAP spokesperson said