Four Interesting Insights From Gartner 2020 CRM Market Share Update
- “The worldwide CRM market grew from $61.6 billion in 2019. The CRM market grew 12.6% to $69.3 billion in 2020, a strong performance but with wide variations in growth due to pandemic impacts. However, CRM generally continues to thrive and grow above the overall software industry average rates, which were 8.8% in 2020”.
- “CRM accounted for the largest share in the overall enterprise software market at 29%”
- “Salesforce’s CRM revenue grows by 18.8%, Reaching $13.5 billion In 2020”.
- “SAP and Oracle each witnessed a slight decrease in market share to 5.2% and 4.4%, respectively, in 2020, down slightly from 5.7% and 4.7% in 2019”.
“The worldwide CRM market grew by 12.6% to $69.3 billion in 2020, up by $7.77 billion from 2019. CRM is the software market and the third fastest-growing” according to the Gartner, Market Share Analysis: Customer Experience and Relationship Management Software, Worldwide, 2020, by Julian Poulter, Yanna Dharmasthira, Neha Gupta, Amarendra, 16 June 2021.
Gartner found that “Digital commerce grew at a rate of 17.1%, up from 13.2% growth in the prior year, highlighting the shift to digital”. The research firm also defined a new CRM submarket called Cross-CRM comprised of Customer Data Platform (CDP) and Voice of the Customer (VoC) spending. According to Gartner, “Customer Service and Support (CSS) also continues to be the largest segment in the overall CRM market, accounting for 35.5%share. The following graphic compares the top five vendors’ revenue by subsegments:
Additional interesting insights from Gartner latest CRM market share update include the following:
- Five vendors comprise 35.6% of an increasingly fragmented CRM market. “Salesforce, SAP, Oracle, Adobe, and Microsoft jointly held share in the CRM market is at 35.6%, up slightly from 35.2% in 2019, while still leaving a highly fragmented 23% stake for 81 named vendors (that we track in market share) and 41.5% stake for the remaining large number of other software vendor”s. “Shopify grew 41.5% year on year, a higher rate than the previous year’s 38%”.
- Salesforce, Microsoft, and Adobe grew faster than the market in 2020. “Salesforce’s CRM revenue grows by 18.8%, Reaching $13.5 Billion in 2020”. Microsoft’s CRM Revenue grew by 17.5% in 2020. Sales is its largest segment with 61% of its CRM revenue and achieved 13.7% growth, above the sales average growth of 10.9% suggesting Dynamics attractive price point, integrated with Power Platform and Office and as a unified CRM suite, are appealing to buyers”. Adobe is the most significant marketing software vendor with its “CRM revenue totaling $2.4 billion in 2020 (just ahead of Salesforce at $2.35 billion), up from $2.1 billion in 2019”.
- $55 billion of 2020 CRM sales were cloud-based, comprising 79.4% of all sales, increasing from $47.7 billion in 2019. Gartner believes that “Cloud growth was slightly slower due to the pandemic, and on-premises software (new license and software support services) still had very small growth of just over 4% up from the previous year”. Vertical market niche-based applications are sold on-premise, including those tailored to the specific needs of banking, financial services, manufacturing, and process industries’ operations.
- “North America and Western Europe hold the largest share in the CRM market, with 59.6% and 20.7% stakes, respectively”. According to Gartner, “Mature APAC and Japan emerged as the fastest-growing regions with 19.2% and 17.5% growth rates respectively. Adoption lags in these markets compared with North America and Western Europe, and this higher growth rate shows more investment as companies catch up. At the moment however, Mature APAC and Japan together only account for about 9% of the overall CRM market share”.
- Global spending on Customer Service and Support (CSS) grew 12.9% in 2020, down from 14.78% in 2019. “The CSS market saw growth of 12.9% in 2020, down from 14.78% in 2019, reaching $24.6 billion, up from $21.8 billion in 2019”. “The leading vendor in the CSS segment is Salesforce , with $5.3 billion in revenue,with service being its biggest cloud, overtaking sales in 2020”, according to Gartner. The next three top vendors include Genesys, Oracle and Zendesk – with Zendesk replacing SAP at No. 4 Zendesk, achieved revenue of $866 million and a growth rate of 25.1%”.
Gartner, ‘Market Share Analysis: Customer Experience and Relationship Management Software, Worldwide, 2020’, Julian Poulter, Yanna Dharmasthira, Neha Gupta, Amarendra, June 16, 2021 (client access required)
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