On-Demand CRM Applications Market Earns Leading Vendors Revenue and Commanding Market Positions, IDC Says
FRAMINGHAM, MA – SEPTEMBER 12, 2005 – The appeal for on-demand customer relationship management (CRM) applications was strong in 2004, says IDC, generating approximately $300 million dollars in revenue. A new report issued by IDC delivers the first vendor ranking for on-demand CRM applications providers which reveals a high revenue concentration among few vendors – the top five vendors accounted for 81.6% of the total market.
According to the new study, Salesforce.com holds the leading position with 49.5% market share followed by RightNow Technologies in second with a market share of 13.5%. Surprises in the leadership table include Siebel Systems who entered the on-demand CRM applications market in January of 2004, but still managed to score a fifth place ranking.
"The software on-demand delivery model is helping to reinvigorate the software industry and turns an attentive ear to customer needs and wants," says Erin Traudt, research analyst for Software as a Service. "Ultimately, customers want their business problems solved and the on-demand model provides another option to help accomplish that important and necessary feat."
"On-demand applications made their presence known in a measurable way in the CRM market in 2004 and they continue building momentum in 2005," said Mary Wardley, vice president of CRM Applications research at IDC. "Although these applications currently compose a small percentage of the overall CRM applications market, suppliers of these applications are reaching end-user organizations during critical replacement cycles."
Additional highlights from this study include the following:
— CRM implementations now often involve flexible business process flows versus discrete functional implementation. IDC sees this trend continuing for the foreseeable future.
— IDC believes that on-demand delivery of applications will increasingly appear as part of a hybrid environment of on-premise and on-demand applications as the broader market gains familiarity and comfort with the product and if the functionality offered meets or exceeds on-premise products.
— IDC survey results indicate that customers are more likely to spend more money on software as a result of their software as a service (SaaS) purchase and are more likely to work with other vendors than in the past, which presents both challenges and opportunities for on-demand providers.
IDC's recent study, Worldwide On-demand Customer Relationship Management Applications 2004 Vendor Analysis (IDC #33999) is the first to be produced by IDC for the worldwide on-demand CRM applications market. It examines the top five on-demand CRM providers in terms of global revenues in 2004. Included are observed trends and a vendor competitive analysis. Additionally, this study profiles leading providers and identifies key success characteristics for the future. This study also contains results from IDC's 2005 Software as a Service Adoption Study conducted in April 2005.
To purchase this document, call IDC's Sales hotline at 508-988-7988 or email firstname.lastname@example.org.
IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.
IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com .
All product and company names may be trademarks or registered trademarks of their respective holders.