CRM trends
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The customer relationship management (CRM) market is reaching maturity, with price pressures and weak demand stifling growth, according to IDC.
The customer relationship management (CRM) market is reaching maturity, with price pressures and weak demand stifling growth, according to IDC. In its latest figures the analyst house predicts that annual growth in the market is unlikely to exceed 5%.
Key European markets, such as Germany, France and Italy continue to show weak demand for CRM applications, according to IDC reports. Furthermore, large enterprises are undertaking smaller CRM projects, and as vendors compete for smaller deals they are increasingly targeting small and mid-sized companies.
But despite the low overall growth, there are pockets of the market that are performing well, says Bo Lykkegaard, programme manager of European enterprise applications at IDC. Hosted CRM, customer analytics, customer self-service and CRM applications tailored for specific industries all show scope for high growth, says Lykkegaard.
"Certain industries, in particular financial services, telecommunications and public sector, have enormous potential for replacing custom-developed CRM applications with packaged software," he adds.
A recent survey of of over 200 companies by industry analysts AMR Research shows that the use of hosted CRM is rapidly growing as 49% of all companies interviewed said they plan to make use of hosted sales or ecommerce applications within the next year.
AMR further reports that half of those surveyed plan to increase their CRM software budgets in 2006, predicting an average increase of 8.2%.
