Eurogrowth in CRM industry

A little more information from Gartner shows a little more money made in the European CRM industry last year. Fuelled by the renewed business focus on revenue and customer growth, says recent Gartner analysis, total European customer relationship management software revenues totaled US $1.9 billion in 2005, representing an increase of 9.7 percent.

Figures showed that SAP and Oracle jointly held over half the total CRM software market but, citing increasing adoption of on-demand solutions, Gartner noted that SalesForce.com had “produced significant gains,” growing a whopping 86.4 percent in the year. Microsoft experienced the fastest growth in Europe at 88.1 percent.

SAP was the no. 1 CRM vendor in Europe based on total software revenue, with a 32.4 percent market share in 2005, up from 31.4 percent in 2004. The highest growth within CRM software was in applications for marketing automation, which showed an increase of 18.6 percent. This was followed by sales automation at 12.1 percent and customer service and support applications at 3.6 percent.

Another Gartner figure seemed to produce a bit of a paradox. CRM market growth in Europe was lower than the 13.7 percent increase seen in 2005 overall and lower than the 15.1 percent increase seen in 2004 Europe. Authors of the Gartner report emphasized that, despite the lower revenue growth, “there is actually more CRM business in the market.” “The picture in Europe is very fragmented,” says Chris Pang, senior research analyst for Gartner. “Our research shows that growth in spend on CRM software correlates strongly with economic growth measures such as gross domestic product.”

Pang went on to explain that GDP growth in countries such as Italy and Germany remains lower than world averages, while market growth in countries such as the UK, Sweden, Norway and Denmark has been more consistent with that in North America. This explanation also helps smooth over variances in each country ranging from just under zero percent growth to more than 27 percent growth.