Worldwide spending on customer experience and relationship management (CRM) software grew 15.6 per cent to reach $48.2 billion in 2018. Marketing is the fastest growing subsegment.
The figures are contained in new research from Gartner which says CRM remains both the largest and the fastest growing enterprise application software category.
According to the analysis, worldwide enterprise application software revenue totaled more than $193.6 billion in 2018, a 12.5 per cent increase from 2017 revenue of $172.1 billion. CRM made up almost a quarter of that revenue.
Approximately 72.9 per cent of CRM spending was on software as a service (SaaS) in 2018, and this is expected to grow to 75 per cent of total CRM software spending in 2019.
The researchers say the big drivers are agility and flexibility, along with the requirement for remote and mobile users.
“Cloud growth has dropped slightly in 2018 but remains strong at 20 per cent and significantly above the overall growth rate of 15.6 per cent 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.”
The top five CRM software vendors accounted for more than 40 per cent of the total market in 2018 (see Table 1). The top five vendors had very little change in ranking compared with 2017, although Microsoft climbed into fifth position, narrowly displacing Genesys.
Te report also reveals all subsegments of the CRM market grew by more than 13.7 per cent, with marketing emerging as the fastest growing segment, increasing by 18.8 per cent and representing more than 25 per cent of the entire CRM market.
Customer service and support retains its No. 1 position, contributing 35.7 per cent 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,” said Poulter.