Robust Gains Resulted From Strong Vendor Performance

Some excellent news for the industry from researchers at Gartner, Inc. was released today. The bottom line being the bottom line, all stories are certain to lead with the key statistic showing that worldwide customer relationship management total software revenue totaled $5.7 billion in 2005, up 13.7 percent from 2004.

Gartner research director Sharon Mertz broke down the results of the survey by stating that “Robust gains resulted from strong vendor performance across the market, continued rapid adoption of on-demand solutions, increasing penetration of emerging markets, and buyer recognition of CRM applications…” Within the industry, Gartner numbers had SAP as the top CRM vendor based on total software revenue, with a 25.9 percent market share in 2005. Siebel, Oracle, Salesforce and Amdocs followed.

Increased midmarket opportunity drove growth across the CRM market for large suite vendors and on-demand providers such as Salesforce.com. The Gartner study noted Siebel’s strong fourth quarter results, and figured their gain was the loss of Oracle and PeopleSoft CRM solutions. Industry specialist Amdocs benefited, said researchers, from high demand for vertical market solutions. The report included the noting of other trends as well.

Merger and acquisition activity in 2005 was described as “continu[ing] relentlessly,” and market consolidation was called “a driver for best-of-breed and suite providers.” The “Market Share: CRM Software Worldwide, 2005” report can be found in its entirety on Gartner’s web site, www.gartner.com. The report itself is noteworthy as the first in which Gartner measured market share not in terms of new license revenue, but instead in terms of total software revenue.

The switch was primarily due to the emergence and increasing popularity of open-source software and buyer consumption models such as hosted and subscription offerings. Figures used in determining results included revenue generated from new licenses, updates, subscriptions, hosting, technical support and maintenance. Stamford, Conn.-based Gartner, Inc. is a combination of four branches devoted to the gathering and analyzing of “technology-related insight”: Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner now has 3,900 associates (including 1,200 research analysts and consultants) in 75 countries worldwide and serves 10,000 organizations.