The global total spend on customer relationship management (CRM) software grew 15.6% to reach $48.2 billion in 2018, according to research from Gartner.
The research firm says CRM remains both the largest and the fastest growing enterprise application software category.
Worldwide enterprise application software revenue totalled more than $193.6 billion in 2018, a 12.5% increase from 2017 revenue of $172.1 billion. CRM made up almost a quarter of that revenue, reveals Gartner.
The top five CRM software vendors accounted for more than 40% of the total market last year, led by Salesforce (19.5%), SAP (8.3%) and Oracle (5.5%), with Adobe (5.1%) and Microsoft (2.7%) in fourth and fifth place, respectively.
“Cloud growth has dropped slightly in 2018, but remains strong at 20% and significantly above the overall growth rate of 15.6% for CRM,” says 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.”
According to the report, about 72.9% of CRM spending was on software as a service (SaaS) in 2018, which is expected to 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.
Furthermore, all sub-segments of the CRM market grew by more than 13.7%, with marketing emerging as the fastest growing segment, increasing by 18.8% and representing more than 25% of the entire CRM market. Customer service and support retains its number one position, contributing 35.7% of CRM market revenue.
“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,” concludes Poulter.
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