Worldwide spending on customer relationship management (CRM) software grew 15.6% year-on-year to $48.2 billion in 2018, according to research firm Gartner, Inc. Worldwide enterprise application software revenue totalled more than $193.6 billion in 2018, a 12.5% increase from 2017’s $172.1 billion. CRM made up almost a quarter of that revenue, it added.
“Cloud growth (for CRM) has dropped slightly in 2018 but remains strong at 20% and significantly above the overall growth rate of 15.6% for CRM,” said Julian Poulter, senior director analyst at Gartner.
As an early mover to the cloud, CRM software is probably seeing a gradual reduction in cloud growth rates due to high adoption, added Poulter.
According to the research firm, CRM remains both the largest and the fastest-growing enterprise application software category.
The survey revealed that approximately 72.9% of CRM spending was on Software as a Service (SaaS) in 2018, which is expected to grow to 75% of total CRM spending in 2019, with agility and flexibility being big drivers, along with the requirement for remote and mobile users.
According to Gartner, the top five CRM software vendors accounted for more than 40% of the total market in 2018. The top five vendors had very little change in rankings compared with 2017, with Microsoft climbing into the fifth position, narrowly displacing Genesys, it said.
Further, all the sub-segments of the CRM market grew by more than 13.7%, with marketing growing the fastest at 18.8% and representing more than 25% of the entire CRM market.
Poulter also said that 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
Last week, a report by Gartner revealed that three-quarters of organisations globally increased their investments in customer experience (CX) technology last year.
Customer analytics continued to be one of the biggest priorities, with 52% of the respondents intending to boost investments in the area in 2019, focusing on customer journey analysis, customer needs analysis, voice of customer (VoC) and digital marketing.