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2013 CRM Market Share Update: 40% Of CRM Systems Sold Are SaaS-Based

CRM-Market-Share-Analysis-Image-2012Last year, four out of every ten CRM systems sold were SaaS-based, and the trend is accelerating.

In the recent Gartner report  Market Share Analysis: Customer Relationship Management Software, Worldwide, 2012 published April 18, 2013 the authors provide insights into why the worldwide CRM market experienced 12% growth in 2012, three times the average of all enterprise software categories.  Gartner cites demand they are seeing from their enterprise clients for CRM systems that can help acquire customers, analyze and act on customer behaviors, and increase all-channel management performance.  Big data inquiries are also increasing in CRM, driven by the interest enterprise clients have in getting more value from social network data and interactions.

Key take-aways from the report include the following:

  • The CRM worldwide market grew from $16B to $18B attaining a 12.5% growth rate from 2011 to 2012.
  • 80% of all CRM software in 2012 was sold in North America and Western Europe.    North America CRM sales grew 16.6% from 2011 to 2012.  The highest growth regions of CRM sales between 2011 to 2012 included Greater China (26.9%) and Latin America (24.3%).
  • Salesforce.com is the world’s leading CRM software vendor with 14% market share in 2012 ($2.5B in sales), surpassing SAP (12.9%, $2.3B in sales), Oracle (11.1%, 2.01B in sales), Microsoft (6.3%, $1.1B in sales), IBM (3.6%, $649M in sales) and all others.  The top ten vendors worldwide generated $10.9B in sales alone in 2012.

Figure-1-Market-Share-CRM

  • Worldwide CRM software spending by subsegment shows Customer Service and Support leading all categories with 36.8% of all spending in 2012 ($6.6B), followed by CRM Sales (26.3%, $4.7B), Marketing (includes marketing automation) (20%, $3.6B) and e-commerce (16.9%, $3B).   The following chart shows the distribution of revenue by category:

CRM-Software-Subsegments

  • 40% of all CRM software sold in 2012 worldwide was SaaS-based.  Gartner states that they are seeing their enterprise clients seek out easier-to-deploy CRM systems compared to on-premise alternatives.  The report states that many enterprises are now replacing their legacy systems with SaaS-based CRM systems as well.  Enterprise clients also report that SaaS-based CRM systems are delivering net-new applications that deliver complementary functionality not possible with legacy and previous-generation CRM platforms.
  • Ten fastest growing CRM vendors as measured in revenue Annual Growth Rate (AGR) in 2012 include Zoho (81.2%), Hybris (78.6%), Teradata (70.4%), Bazaarvoice (56.2%), Marketo (54.3%), Kana (44.2%), Demandware (43.9%), IBM (39.4%), Technology One (37.1%) and Neolane (36%).
  • Communications, media and IT services were the biggest spenders on CRM in 2012 due to their call center requirements.  Manufacturing including Consumer Packaged Goods (CPG) was second, and banking & securities were third.
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5 Comments Post a comment
  1. In my opinion, CRM system is a new look to a businessm which is very useful nowadays.

    May 8, 2013
  2. Nilesh #

    Dear Louis,

    Thanks for writing this blog and posting a consolidated report here. I was exactly seeking this kind of report and analysis to make a decision to move my career to CRM Functional consultant. I am planning to choose SAP CRM functional consulting for future and was looking to see what is the prediction for future of SAP CRM.. with your analysis and figures from Gartner report, It seems that the SAP CRM will not lead a list but will be among the top players in future..so the choice of moving to SAP CRM won’t be wrong… Could you guide me if I am missing something.
    Thanks and best regards,
    Nilesh

    May 9, 2013
  3. Louis Columbus #

    Hi Nilesh,

    Thanks for your kind words and for reading my blog. I think pursuing the goal of being an SAP CRM functional consultant is an excellent idea. While Salesforce.com is the market share leader right now, SAP is doing all it can to accelerate the next generation of CRM applications. What’s great about standardizing on them is their significant installed base. You’ll be able to find SAP customers across dozens of industries, and many of them will need your help with their CRM strategies. And SAP is also moving very quickly into mobility-based CRM as well, along with their cloud-based efforts. All of those factors add up to a strong foundation for future growth for your career.

    Glad to help you out and please let me know however I can assist you in the future.

    Best Regards,

    Louis

    May 9, 2013
  4. Nilesh #

    Dear Louis,
    Thanks for your quick and clear reply… and more importantly pulling time to read my comments. I have bookmarked the URL and has also subscribed for your blog, so I will surely keep in touch with you and your knowledge updates.

    I also think with SAP HANA in the market, SAP will grow better and will establish larger customer base. These customer will also prefer SAP CRM due to seamless integration of different SAP solutions and products with each other.

    Thanks again for your kind word and I surely contact back to you in future for help as needed.

    Have a great weekend!

    Regards,
    Nilesh

    May 10, 2013
    • Louis Columbus #

      Dear Nilesh,

      Glad to help you out and share what I have learned. And I agree, SAP HANA is a priority today for the company, and the implications on customer and predictive analytics are significant for that platform. CRM will be even more important in the future as HANA gains critical mass in terms of customers and applications. Be sure to watch what happens at Sapphire this week as well http://www.sapandasug.com/

      Likewise, have an excellent weekend as well.

      Regards,

      Louis

      May 10, 2013

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