For 2006, the overall global revenue for the CRM software market stood at a little under $3.6 billion; and that's only the revenue from licensing the software. By the end of 2012, the market is expected to reach $6.6 billion in revenue. That equals a 10.5 percent annual growth rate.
When you combine maintenance revenue with the CRM licensing revenue, the market is projected to reach over $10 billion by the end of 2012, according to a Datamonitor report.
Included in the CRM software space in this report: "CRM software in this case refers to sales force automation, marketing automation, customer service automation, customer analytics and on-demand CRM software."
Vuk Trifkovic, Datamonitor technology analyst and author of the study, said concerning the on-demand CRM market that “Vendors offering on-demand CRM solutions will differentiate themselves by investing in advanced feature-sets, data-center hosting efficiencies and by integration with their own on-premise versions of CRM so that their customers will be able to seamlessly migrate between the same vendor’s hosted and more traditional editions.”
By the end of 2007, the on-demand CRM market should grow to about $1 billion. Smaller and medium size companies will be the drivers of these applications. Over the next year-and-a-half, the on-demand CRM market is expected to become a lot more competitive, with smaller companies pushing the larger for market share.
In the overall CRM sector, smaller and medium sized companies will account for about 42 percent of the market; specifically companies with under 1,000 workers. In 2006 they accounted for about 33 percent of the CRM market.
Those companies not differentiating themselves, will have a growing pricing pressure, as the entry-level space becomes more commoditized. That will of course continue to put pressure on margins and profits.
While Telecommunications companies will remain the biggest users of CRM technologies, along with Financial Services and Energy and Utilities, other sectors like Healthcare, Life Sciences and the Public Sector will grow faster in usage at the same time.
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