Published on the 02/05/2013 | Written by Newsdesk
The SaaS-based vendor has overtaken industry stalwart SAP in Gartner’s worldwide CRM revenue rankings as organisations of all sizes seek alternatives to legacy applications…
Nearly 40 percent of the total CRM software market (which grew 12.5 percent in 2012 to US$18 billion) was SaaS-base software, suggesting that legacy vendors will need to act quickly to survive the changes being wrought by the Nexus of Forces (Gartner’s term for the convergence and mutual reinforcement of the social interaction, mobility, cloud, and information trends).
Gartner says that now organisations of all sizes are seeking easier-to-deploy alternatives to replace legacy systems, as net-new applications or to provide alternative complementary functionality.
“Competition among CRM software vendors really heated up in 2012, as major players continued to vie for broader market penetration internationally and more widespread adoption within midsize to large enterprises,” said Joanne Correia, vice president at Gartner. “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.”
Table 1 CRM Software Spending by Vendor, Total Software Revenue Worldwide, 2012 (Millions of USD)
| 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)
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.
“With corporate cash at all-time highs, many vendors are willing to pay high premiums to acquire specific technologies and expertise in an increasingly dynamic and competitive CRM market environment,” said Correia.
