Big Picture of CRM

CRM Market Facts

• Enterprise application is a small portion of overall software market, and it represents only 12% of
total space and Customer Relationship Management represents 16% of that.
• Forrester predicts that CRM Application market will grow to 10.9 billion by 2010
• AMR Research predicts that the industry will worth 18 billion by 2010.
• CRM Industry will grow with an average CAGR of 7% till 2010
• Companies with 100 and 999 employees will spend more than $1 billion on CRM applications
with a CAGR of 9%
• Currently 35% of the midmarket is currently using CRM applications
CRM market is now dominated by five big vendors–SAP, Oracle, salesforce.com, Aspect and Amdocs.
Together, they make up 40% of the market (nearly $3.4B in total revenue for 2005).

The present CRM Strategy of an Industry is driven by factors such as consolidation of leading customer
relationship marketing vendors, intensified competition from larger and better capitalized business
applications players and the rise of new software-as-a-service deployment options.

CRM Applications are divided into three market segments

1) Enterprise Suit CRM which serves companies with more than $1 billion in revenue
2) Midmarket Suit CRM serves companies and divisions of large enterprises with $100 million to $1
billion in annual revenue
3) SMB Suit CRM serves organizations with annual revenue of less than $100 million

CRM Market in India

The market for CRM in India is expected to grow at a compounded annual rate of 40 per cent to
reach Rs 1.9 billion in 2006. CRM initiatives in most organizations are driven by actual users
like customer support department and sales function. There is high demand for CRM software in
financial sector and telecom services. A survey among 200 organizations revealed that nearly
81 per cent end-users stated that they were using modular CRM, while 19 per cent said they were
using complete CRM package. The CRM applications that are primarily used are marketing
automation closely followed by customer care and support automation. The key business
drivers for investing in CRM solutions are customer retention and loyalty and improving cost
efficiencies. Another important reason that emerged for CRM adoption was to make sales force
management more effective.

CRM Market in Middle East

The local CRM application market size will grow to USD 90 million with a CAGR of 20% by
2008. Need to increase customer satisfaction and adopt e-business are the top two market
drivers for CRM adoption in the UAE, while vertical markets lack of knowledge and the price
of software and hardware are the major inhibitors. Major CRM clients in the UAE are banks,
telecommunication firms, energy and airline companies, and some government departments,
while tourism and travel industry is emerging as one of the main growth sectors, according to the
study.

CRM Market in Singapore

The CRM market in Asia Pacific is forecasted to grow at a compound annual growth rate
(CAGR) of 18.9%, between 2006 and 2011, to reach US$846.4 million total software revenue in
2011. The growth in Singapore and Hong Kong will be slower and estimated to be at 6% CAGR.
Oracle is the market leader with Siebel holding the lion's share of the market. In Singapore On
Demand CRM is the new wave. Oracle has recently launched an On demand CRM in this region.
Key players like Microsoft and Sales Force have entered into this market.

Trends in CRM Industry: What’s in News?

1. Corporate Performance Management
Corporate Performance Management (CPM) means using a set of objectives and supporting
metrics that together keep the organization on track. This year we'll see tighter integration
between CPM and CRM. CPM provides the strategic linkage to the business, along with
tools to analyze customer-related metrics and disseminate throughout the organization.

2. On-Demand CRM
The market for hosted or on-demand CRM solutions has come. Salesforce.com, RightNow,
Net Suite and UpShot are pioneering software-as-service. The market growth in this segment
is exceeding 20 percent overall. No longer asleep at the on-demand switch, Siebel has a
competitive product and a game plan that looks good on paper. In the Small and Medium
Business (SMB) arena, it's all NetSuite, all the time. Siebel may prove a threat eventually
RightNow and salesforce.com will get their fair share of the SMB pie, too, where back office
support is not a requirement. However, this space is just too wide open. Look for another big
SMB vendor to catch on-demand fever this year, such as Best Software or Microsoft, or even
non-CRM players like Intuit or Yahoo!

3. Optimizing Interaction Channel (Customer Analytics)

This is one of the many challenges facing marketers trying to optimize interaction channels.
Email has been overused and abused. Phone calls are still too expensive, despite the off
shoring trend, but customers like to talk to a real person. Web usage is growing, but direct
mail refuses to die. Coming to the rescue again in 2005 will be Customer Intelligence
applications to figure out customer profitability, optimize response to marketing campaigns
and help agents deliver real-time offers that make customers smile. In the specialist category
SAS and Unica contend with multi-function gorillas Oracle, SAP and Siebel, which are all
ramping up their analytics offerings.

4. Fragmented Mid-Market CRM going towards consolidation

The Small and Medium Business (SMB) market is slowly consolidating. In 2005, for the first
time we'll see long-term industry leaders emerge for the mid-market. (Small business is
 another story.) Onyx, Pivotal and SalesLogix were mid-market CRM leaders. But each
lacked the scale to truly dominate. Microsoft will be another market frontrunner, continuing
its good progress into its third year as a real CRM vendor.

5. On Mobile CRM
Gartner a market research firm has predicted that mobile CRM is the next buzz work with a
sales forecast of 40 to 60%. Most of the CRM applications are ripe for mobilization and even
the customers want mobile access to specific subsets of CRM data and functions. Sales force
automation and field service management are areas that can be tapped using mobile CRM
facility.

Market Leaders

Market Leaders in CRM

Enterprise Suit Sale Force Automation Data Quality

Amdocs Entellium FirstLogic (BO)

People Soft Maximizer Software Harte Hanks

Salesforce.com Sage Software (ACT) IBM (Ascential)

SAP Salesforce.com Pitney Bowes (Group 1)

Siebel Systems Salesnet (RightNow) SAS Institute (Data Flux )

Mid Business Suit Marketing Automation Consultancy

Microsoft Aprimo Accenture

NetSuite SAP BearingPoint

Right Now Tech SAS Institute Capgemini

Salesforce.com Siebel Systems Deloitte

SAP Unica IBM BCS

Small Business Suit CRM Analytics On Demand CRM

FrontRange Solutions Business Objects Salesforce.com

Maximizer Software Cognos RightNow Technologies

NetSuite Hypersion NetSuite

Sage CRM Oracle Siebel On Demand CRM

Salesforce.com SAS Institute Microsoft

Key Challenges
1) Companies, especially in SMB space are not able to realize the return for their
investments in CRM Applications
2) The initial software costs is low but subsequent costs incurred on maintenance,
customization, integration and training needs accounts for 70% of TCO.
3) Companies usually make mistakes when they are not able to align their CRM strategy to
their business goals
4) Data collection becomes an issue
5) Software industry is expected to grow by 7 to 8% in next 5 years; enterprise application
market is predicted to grow by 5 to 6% and CRM by 2 to 3%. Many companies and
experts are conservative about the growth of this industry because ROI is not realized.

References
http://www.thailand4.com/news/2007-07-17/0817-oracles-siebel-crm-on-demand-
gains/

http://www.destinationcrm.com

http://www.crm2day.com

http://www.cio.com/article/16546/The_Truth_About_On_Demand_CRM/1

http://cio.com/article/40295/3#11

http://www.ameinfo.com/26875.html

www.blonnet.com/2003/02/20/stories/2003022001390700.html