Salesforce.com leads CRM software market share in 2012, overtakes SAP

Infotech Lead India: Salesforce.com is leading the customer relationship management (CRM) software market in 2012, overtaking SAP.

Gartner says total worldwide CRM software revenue reached $18 billion in 2012, up 12.5 percent from $16 billion in 2011.

Joanne Correia, vice president at Gartner, said: “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.”

Vendors benefited from strong demand for software as a service (SaaS), which represented nearly 40 percent of CRM total software revenue in 2012, as enterprises sought easier-to-deploy alternatives to replace legacy systems, as net-new applications or to provide alternative complementary functionality.

Major CRM players

The top five CRM vendors accounted for nearly 50 percent of CRM software revenue in 2012.

Salesforce.com’s direct sales pushed its CRM revenue to more than $2.5 billion.

SAP’s growth was less than one percent in USD terms, largely because currency headwinds were stronger in 2012 and the euro was weak.

While SAP was not the worldwide leader in CRM for 2012, it was still the largest vendor in terms of revenue in Western and Eastern Europe.

Regional CRM Growth 

North America and Western Europe remained the largest regions for CRM, accounting for more than 80 percent of total software revenue, but all regions saw growth.

Western Europe’s growth was less than one percent, due in part to the strong dollar, which made overall comparisons with prior years difficult.

Overall spending in the IT market in Western Europe has been muted because of economic reasons. Areas of growth continued to be in Eastern Europe, Eurasia, and the Middle East and Africa, which saw IT spending for the modernization of countries’ infrastructure (utilities, telecommunications, banking and government).

CRM Trends

In 2012, vendors continued to expand their offerings with new features and functionality, often through acquisition.

The wave of consolidation activity that began flowing through the market in 2009 continued throughout 2012, with more than 50 acquisitions, 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 has been the focus for investment in the past couple of years, growing at more than four times the software industry forecast norm in 2012.

Marketing was also the target area for acquisitions by IBM, Microsoft, Oracle and others as analytics, lead quality and multichannel support for social and mobile technologies continue to lead the list of requirements by line-of-business buyers.

CRM Software Spending by Vendor, Total Software Revenue Worldwide, 2012 (Millions of Dollars)

Company

2012

Revenue

2012 Market

Share (%)

2011 Revenue

2011-2012

Growth (%)

salesforce.com

2,525.6

14.0

2,004.6

26.0

SAP

2,327.1

12.9

2,325.1

0.1

Oracle

2,015.2

11.1

1,870.0

7.8

Microsoft

1,135.3

6.3

900.9

26.0

IBM

649.1

3.6

465.6

39.4

Others

9,437.7

52.1

8,513.7

10.7

Total

18,090.0

100

16,079.9

12.5

Source: Gartner (April 2013)

CRM Outlook

According to a report in Forbes, the role of CMOs relative to CIOs are changing with respect to who is responsible for defining the needs of an enterprise in the areas of CRM, pricing and channel management strategies.  Gartner did a survey on this earlier in the year and found that 72 percent of the companies have a Chief Marketing Technologist, growing to 87 percent by 2014.

Gartner, Forrester and IDC have predicted that cloud adoption rates by CRM subcategory will vary through 2016. Sales applications will see the majority of net new sales on the SaaS platform.

Gartner earlier said CRM SaaS adoption, projecting 50 percent of all CRM applications will be Web-based by 2016. Gartner is predicting 95 percent of Web analytics applications will be delivered via the Web by 2016, an uplift from the 40 percent of sales applications delivered via the cloud today.

Ambika K
[email protected]

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