Baby New Year on the horizon

With the end of the year comes an onslaught of year-end reports, assessments and review; a like deluge of predictions, forecast and other insight into 2007 accompanies it. This week at least, next year looks pretty good.

Access Markets International Partners, Inc. has released a study entitled “2005-2006 Global Technology and Telecom Model,” which paints a rosy picture for the industry: The report declares small- and mid-sized businesses to have budgeted some $2.44 billion on SaaS CRM and ERP/SCM in 2007, representing a 17 percent increase over 2006 spending. That’s a lotta flowers.

Sheer numbers from AMI’s calculations say that strongest demand for CRM solutions will come from the United Kingdom, France, the U.S. and Germany. “These four countries alone are set to boost their hosted CRM spending to US$674 million in 2007,” reads the report, “up 23 percent year on year.”

France, Canada and Sweden are forecast as the largest adopters of hosted software solutions, with AMI forecasting a roughly 15 percent growth rate for all three nations. AMI reckons that investment trends in ERP and SCM solutions in Asian Pacific countries, particularly Japan and Singapore, will increase their investment by about 17 percent in 2007.

Some other key facts and speculation within the report included:

• Hosted/SaaS CRM and ERP/SCM are gaining market share over packaged software. Opines AMI analyst Spencer Richardson, “Hosted software solutions already account for 4 percent of the [amount spent on software worldwide] by SMBs. This is set to rise in the coming years.”

• Market saturation will stabilize compound annual growth rate at 12-13 percent for Britain, the U.S., and Germany.

• In terms of value, the US is likely to maintain its dominant market share of global hosted/SaaS CRM and ERP/SCM investment.

• In terms of penetration rates for hosted/SaaS CRM and ERP/SCM within the SMB sector, Australia ranks first with 22 percent, followed by the US at 20 percent and Singapore at 16 percent.

• SMBs in the U.S. spent over $1 billion on hosted/SaaS CRM and ERP/SCM in 2006, accounting for 52 percent of global investment in hosted software. Germany was second at $179 million (approximately nine percent of global investment), and Japan, Britain and France chased to fill out the top five.

• CRM-hosted software saw the highest growth in the past year among hosted software solutions, up about 22 percent outside of the U.S.

AMI’s “2005-2006 Global Technology and Telecom Model” focused on analyzing trends in IT, internet and communications use and expenditure. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of SMBs worldwide, the studies track issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support.

Meanwhile, our friends over there at TMCnet divulge some stats available from Dittberner Associates Inc., who see a “resurgent growth” in the cards for the CRM market in their report “Telecom Customer Assurance and Analytics.” Study authors figured that approximately $997 million (not one billion, mind you) was spent by the telecom industry on CRM product in 2005, and that number should be $1.3 billion in 2010.

Reports TMCnet contributing editor David Sims: “While the CRM market has certainly declined since its dotcom heyday, the Dittberner report’s authors say the complexity of pricing, promoting, and personalizing next generation telecom services has acted as ‘the main driver for telcos to pay greater attention’ to CRM-related issues.

“While the report sees CRM on the climb again, it cautions that the character of the CRM market has fundamentally changed. As most telecoms already own the desktop tools they need to efficiently capture and integrate customer behavioral and demographic data, Dittberner sees future growth in the analysis of this data. … In effect, telecoms have merely ‘scratched the surface of knowledge’ that can be used from their daily interaction with customers, operations, services, networks, and salespeople.”

“Telecom Customer Assurance and Analytics” is available to Dittberner’s OSS/BSS KnowledgeBase subscribers.

David Sims’ “CRM Market To Hit $1.3 Billion in 2007, Telecom Analysts Say” can be read in full at TMCnet.

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence and focuses on global small- and medium-sized business enterprises. AMI was founded in 1996 under the name of Access Media International, Inc. by Andy Bose, former group vice president of IDC. AMI-Partners has assisted shape the go-to-market strategies of more than 150 companies over the last ten years.

Established in 1966, Dittberner Associates Inc. is an international market research and consulting firm, specializing in the telecommunications industry. The firm is headquartered in Washington, DC.