CRM – dismissed as a flash in the pan nearly 20 years ago – is continuing to prove the doubters wrong with worldwide spending on customer experience and relationship management software growing 15.6% last year, to reach $48.2bn (£38bn).
According to research from Gartner, CRM remains both the largest and the fastest growing enterprise application software category, as predicted in last year’s report.
Worldwide enterprise application software revenue totalled more than $193.6bn (£152bn) in 2018, a 12.5% increase from 2017 revenue of $172.1bn (£135bn). CRM made up almost a quarter of that revenue.
Nearly three-quarters (73%) of CRM spending was on software as a service (SaaS) in 2018, which is expected to actually grow to 75% of total CRM software spending in 2019, with agility and flexibility being big drivers, along with the requirement for remote and mobile users.
Salesforce continues to dominate CRM globally, increasing its market share from 18.3% in 2017 to 19.5% in 2018. Adobe is the only other vendor to boost its market share in 2018.
In fact, the top five CRM vendors accounted for more than 40% of the total market revenue in 2018, with Salesforce followed by SAP (8.3%), Oracle (5.5%), Adobe (5.1%) and Microsoft (2.7%).
However, Adobe dominates the marketing segment of CRM with 19% market share in 2018, followed by Salesforce (11.7%), IBM (5.7%), SAP (4%), Oracle (3.6%) and HubSpot (3.4%).
Gartner estimates the marketing segment was worth $12.2bn (£9.6bn)in 2018, increasing from $10.3bn (£8.1bn) in 2017 – recording 18.8% growth in just a year.
Eastern and Western Europe were the fastest growing regions at 19.7% and 17.5% respectively. North America and Western Europe were the largest two regions, with North America growing at 15.2% to reach $28.1bn (£22.1bn) in revenue.
Gartner senior director analyst Julian Poulter said: “Cloud growth has dropped slightly in 2018 but remains strong at 20% and significantly above the overall growth rate for CRM.
“To exploit the significant market opportunity, product managers in CRM application providers should double down on cloud deployments and consider adding functionality in the fast growing marketing segment.”
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