In its annual CRM market share report, Gartner found that despite the current economic state we find ourselves in, CRM market revenue grew 12.5% in 2008, driven primarily by on-demand software and analytics packages. It’s a good sign, adn one that points to businesses reasserting their value in current customers during a time when purchasing new ones is too expensive and not as likely.
You can get details on the full report here, but two conclusions jumped out at me. While SaaS continued to drive the market forward, it still only represented 20 percent of the total CRM software market revenue for 2008. And while that number jumped from 15 percent in 2007, that means were still more than five years away from SaaS or vendor-hosted software from representing half of all CRM revenue.
I think the market in general gets too caught up in the SaaS hype, believing the marketing buzz of competitors and the hollow predictions of analysts. True, SaaS is a huge growth area and one that SugarCRM has invested plenty in, but in the end, customer choice and customer success should be the real focus, not where the CRM app and data reside.
The other trend that caught my attention is the importance that analytic packages continue to play in the growth of the market. While there is still a hugely untapped market of businesses still leveraging homegrown solutions, the continued focus on analytics says that CRM has now become a mature, well-established process and technology for enough companies, companies that are entering the 2nd or 3rd stages of their CRM implementations. They’ve learned and refined how to collect the data and report on it, now they want to be able to drive actionable results that benefit the business in the long run.