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6/18/2012
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CRM Battle Heats Up As Economy Cools

Oracle, SAP, and Salesforce.com in close battle for customer relationship management leadership, says IDC.

Sales of customer relationship management (CRM) software slowed a bit in the second half of 2011, according IDC statistics releases last week, but that didn't keep the category from racking up double-digit gains for the year. CRM software (and related services) revenue increased 11.2% year over year to $19.1 billion in 2011.

CRM growth was driven by strong demand for marketing automation, sales automation, and customer-service technologies. The one CRM category that didn't keep pace was contact center software, which grew at a meager single-digit rate of just 1.4%, as companies pushed self-service-oriented knowledgebase and collaborative alternatives to customer support.

The top 10 vendors in CRM accounted for nearly half (49%) of the market, gaining nearly a point (0.8%) over their 2010 market share. Leading the way were Oracle (11%), SAP (9.9%), and Salesforce.com (9.5%) in the top three positions, respectively, followed by call-center software providers Avaya (3.6%) and Siemens (3.3%).

Looking at the top three vendors from a geographic perspective, Oracle is strongest in Asia/Pacific (excluding Japan), Salesforce.com's strength is in North America and Japan, and SAP is the leader in EMEA (Europe, the Middle East, and Asia) and Latin America, according to IDC.

[ Want more on CRM and the social enterprise? Read How To Get From CRM To Social. ]

Leadership positions are likely to change in 2012 as Oracle finalized its acquisition of RightNow Technologies in January while Salesforce.com acquired Buddy Media earlier this month. Recent acquisitions by SAP, including SuccessFactors and Ariba, have focused outside the CRM category.

Salesforce.com was among a handful of companies posting double-digit growth in CRM 2011, according to IDC, with others in that category including SAP, IBM, and NICE Systems. IBM broke into the top ten in 2011, led by its Unica and Coremetrics units. Other well-known vendors among the top 25 in CRM software revenue in 2011 included SAS, Adobe, Microsoft, Nuance, RightNow, Interactive Intelligence, and LivePerson.

According to IDC's Worldwide Software Market Forecaster research, demand for CRM outpaced the total global software market, which grew 9.8% in 2011. IDC's research covers more than 1,000 vendors, 49 countries, and 78 categories of software.

IDC issued a forecast last week that predicts global software sales growth cooling to 6% in 2012. The Americas are expected to lead growth with a 7.3% increase this year. Software revenue in Asia-Pacific and Japan is expected to keep pace with the total global market while IDC expects the ongoing debt crisis and austerity provisions in Europe to cap growth in EMEA at 3.8%.

The fastest-growing categories in the total software market include enterprise social software, virtual machine software, and team collaborative applications, IDC reports. Among 35 vendors with more than $1 billion in revenue, only three--VMware, Salesforce.com, and Cadence Design Systems--had double-digit growth rates exceeding 20% in 2011.

At the Big Data Analytics interactive InformationWeek Virtual Event, experts and solution providers will offer detailed insight into how to put big data to use in ad hoc analyses, what-if scenario planning, customer sentiment analysis, and the building of highly accurate data models to drive better predictions about fraud, risk, and customer behavior. It happens June 28.

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