Worldwide Customer Relationship Management Applications Market Expected to Surpass $11 Billion by 2008, According to IDC

FRAMINGHAM, Mass., August 2, 2004 � According to IDC, the worldwide customer relationship management (CRM) applications market will reach $11.4 billion in revenues by 2008, experiencing a compound annual growth rate (CAGR) of 8.9% over the 2004-2008 forecast period. Siebel continues to maintain its leadership position in the worldwide CRM applications market, although down from market shares previously achieved in 2002 and 2001. SAP has effectively established itself in this market and solidly occupies the number 2 position.

While return on investment (ROI) and total cost of ownership (TCO) buzzwords have saturated the marketplace, they continue to be vitally important requirements CRM applications vendors still must emphasize with their CRM offerings. IDC believes ROI and TCO will not go away anytime soon, but may in fact be intensifying as market reality points to an increasing need.

“The environment has fundamentally changed with respect to purchasing patterns, from optimistic buying to increased requirements for a clear return on investment and benefits,” says Mary Wardley, vice president of IDC’s CRM applications research. “Happily, customers are finding both and are achieving a meeting of the minds with suppliers.”

Demonstrating ROI is also rising in importance for conducting sales in the CRM analytics applications market. According to IDC, analytics are becoming critical components of generally accepted customer management strategies. IDC reports the worldwide CRM analytic applications software market revenues grew 12.7% to reach a healthy $908.7 million in 2003. IDC also reports that market concentration is increasing as the top 5 vendors by revenue represent 44% of the market.

“The consolidation trend in the CRM analytics space is not only due to the rapid growth of vendors such as Siebel, SAS Institute, and NetIQ, but also due to the rapid growth of smaller players like Coremetrics and DoubleClick,” says Robert Blumstein, research director for IDC’s CRM analytic applications research.

IDC’s report, Worldwide CRM Applications 2004-2008 Forecast Update and 2003 Vendor Shares: July 2004 (IDC #31524), examines the CRM applications market providing vendor revenues and market shares from 2001-2003, worldwide market sizing for 2003, and a five-year growth forecast for 2004-2008. Additional information is derived from IDC’s report, Worldwide Customer Relationship Management Analytics Applications 2003 Vendor Shares: A Market Entering Transition (IDC #31510), which delivers vendor revenues and shares from 2001-2003. Both documents provide profiles of the leading vendors participating in the markets.