CRM Market Suffers Some Growing Pains
Forrester Research reports that the CRM market will suffer a drop in 2002 revenue, but recover to grow steadily, though modestly, to reach $74 billion by 2007.The bloom is off the customer relationship management (CRM) rose at least a little bit according to Forrester Research.
In CRM's Future: Humble Growth Through 2007, the Cambridge, Mass.-based research firm reports that while the CRM market will drop 5.4 percent in 2002 to $42.8 billion, revenues will bounce back with an albeit modest compound annual growth rate of 11.5 percent over the next five years, reaching in $73.8 billion by 2007.
Several factors that will reshape the CRM market, according to Forrester, including cross-channel integration, vendor verticalization, Web services and a shift in application pricing models.
Forrester breaks the CRM market into the following three categories:
- Applications software licenses, maintenance and services by application vendors (subcategories include marketing automation, CRM suites, analytics, customer channel management and field force automation).
- Services outsourced business process and professional services related to contacts and data (subcategories include contact center outsourcing, consulting and marketing services).
- Infrastructure integration and routing technology for contacts and data (subcategories include data integration and contact center infrastructure).
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Forrester says that due to the slowdown in Internet commerce software, customer-facing channel apps will experience the slowest annual growth rate in the CRM market: 7.3 percent over the next five years.
On the flipside, marketing automation applications will represent the fastest-growing CRM segment. Between 2002 and 2004, growth will hover around 14.5 percent, Forrester says, but the segment will expand at a 17 percent rate thereafter, reaching $928 million in 2007.
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