As more and more companies begin to concentrate on customer service, sales of customer relationship management (CRM) software are set to boom bringing the total market value to over $16.8bn by the year 2003, up from $2.3bn in 1998. According to Boston- based AMR research, the market will have a compound annual growth rate of 49% over the next five years. The analyst firm says the market will undergo major consolidation, with the large ERP firms buying up the smaller vendors as more and more companies begin to adopt CRM systems to improve customer service. In addition, AMR predicts the European CRM market will grow to $4.3bn in 2003 from $500m in 1998, with a CAGR of 53%, above that of North America over the same time period.
Based on 1998 total company revenue, AMR says the top vendors were Siebel Systems Inc, Vantive Corp and Clarify Inc but it warns that ERP vendors are beginning to have a significant impact on the market, with Oracle and Baan capturing two of the top five vendor positions in overall revenue. Their products are becoming increasingly attractive to potential customers since they have the benefit of offering integration of their CRM suites with back office ERP applications.
Across the board, CRM vendors are expanding their portfolios, beyond the standard sales and service modules, to include new web-based functionality and marketing, the report says. And the contact center is rapidly emerging as the focal point of customer interactions, consolidating and managing all customer contact, be it from the web, telephone, email or kiosk.
