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CRM Jumps 12.5 Percent in 2012: Gartner

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Posted April 29, 2013 By Pedro Hernandez     Feedback

Salesforce helps customer relationship management (CRM) grow at a faster rate than the overall enterprise software market.

Customer relationship management (CRM) is taking the enterprise software market by storm.

Gartner reported that the market for CRM software surged by 12.5 percent in 2012. Last year, CRM vendors hauled in $18 billion in revenues, compared to $16 billion in 2011.

Gartner vice president Joanne Correia noted that CRM providers stepped up their game. "Competition among CRM software vendors really heated up in 2012, as major players continued to vie for broader market penetration internationally and more widespread adoption within midsize to large enterprises," she said in a statement.

CRM Central to Enterprise Trends

When it comes to business applications, CRM is clearly outpacing the rest of the industry. "Market growth in 2012 was three times the average for all enterprise software, highlighting how CRM is at the eye of the Nexus of Forces storm," added Correia.

Nexus of Forces is the term Gartner uses to describe the convergence of social, mobility and cloud computing. Of late, CRM software makers and service providers have been doing practically everything in their power to live up to the word.

survey of the social CRM market reveals that companies like Microsoft Dynamics CRM/Yammer and Kony are doubling down on social and mobile capabilities to mold their platforms to the tastes of today's workforces and consumers. Last week, Salesforce launched Social.com, to extend the Marketing Cloud arm of its CRM platform into the mobile ad space.

It's a move that may help the company cement its place top the CRM vendor rankings.

Gartner also revealed that Salesforce took the CRM crown from SAP last year with over $2.5 billion in revenue -- a 26 percent increase over 2011's figures -- and a 14 percent share of the market. SAP, in comparison, generated $2.3 billion in revenue and commanded 12.9 of the CRM market. Rounding out the top five are Oracle, Microsoft and IBM.

CRM Shopping Spree

Expect a sustained wave of acquisitions, hints Correia. "With corporate cash at all-time highs, many vendors are willing to pay high premiums to acquire specific technologies and expertise in an increasingly dynamic and competitive CRM market environment."

According to Gartner, there were over 50 acquisitions in 2012, "resulting in increased competition at the top end of the market, with the real start of the global sales forces kicking in some sales."

Marketing-related deals dominated last year, a type of investment that occurred at a pace "more than four times the software industry forecast norm in 2012," said the market research firm. Notable examples include Microsoft, which snapped up MarketingPilot, a marketing automation specialist, and Oracle's acquiring Vitrue's social marketing cloud to help its customers reach social-savvy consumers.

Pedro Hernandez is a contributing editor at Enterprise Apps Today and InternetNews.com. Follow him on Twitter @ecoINSITE.

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