IDC: CRM To Generate Over US$14 billion By 2005 Staff

Updated · Aug 16, 2001

According to industry analyst firm IDC, the customer relationship management (CRM) market is expected to generate over $14 billion in revenue by 2005. This figure represents the significant 84 percent increase that was exhibited in the year 2000 of $6.2 billion. IDC released this information as a result of its new bulletin, “Worldwide CRM Applications Market Forecast and Analysis Summary, 2001-2005,” that studied customer-centric applications by region and operating environment.

Additional findings include:

  • Sales automation applications, marketing automation applications, and customer service and contact center applications experienced high growth in 2000, with no one market showing revenue growth below 70 percent.
  • Sales automation dominates the CRM applications market, garnering over 42 percent — or $2.6 billion — of the worldwide CRM application revenues in 2000. The greatest growth belongs to marketing automation applications, the smallest of the three markets in terms of revenue.
  • According to IDC, Siebel outperformed all other competitors by a huge margin, increasing its market share 23 percent from 1999 to 2000. The next nearest competitor grabbed a 5.5 percent market share.
  • North America is the biggest spender in the worldwide market for CRM applications, with nearly $8.6 billion in revenue in 2005. However, Western Europe will exhibit the highest growth, increasing revenues 22 percent from 2000 to 2005. Comparatively, North American CRM revenues will have a lower compound annual growth rate. Mary Wardley, program director of IDC's CRM Applications and eCommerce Applications Software programs cites an increased understanding of CRM issues and internationalization of product offerings as the reason behind Western Europe's growth.

“The rise of new market players and products indicates the many fronts on which end users are fighting the CRM battle,” said Wardley. “Despite the current economic downturn, end-user organizations continue to rate CRM as critical to their organizations ongoing business strategy. End-user response to the market condition is to plan an ongoing implementation strategy over an extended period of time rather than purchase the total solution up front. This will fuel CRM applications growth over a longer period of time.”

Headquartered in Framingham, Mass., IDC delivers insights and advice on the future of e-business, the Internet and technology through more than 700 analysts in 43 countries worldwide.

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