Gartner’s “Forecast: CRM Software, Worldwide, 2005-2010”

Another report from Gartner, “Forecast: CRM Software, Worldwide, 2005-2010” has been released. As noted in the “Magic Quadrant” report, this survey indicated expansion in the industry and growth unseen since the early part of the decade. According to the report, license revenue grew by 4.8 percent to $3.6 billion in 2005, finishing well ahead of forecasts placing growth at 2.7 percent. The growth rate represents a doubling of growth in 2004.

Gartner credited the success of RightNow Technologies and Salesforce.com for the growth. “Business confidence in general is improving,” maintains the study, “decision makers are investing in processes and technologies, which drive revenue generation and enable business accountability.” Overall, the study references market potential for continued growth. “In 2003,” it reads, “we reported negative growth, returning to positive in 2004. This strong showing in 2005 indicates that the market is again healthy and shows signs of continued improvement.” In the long term on the same subject, Gartner authorities post a 4.9 percent raise over the period to 2010.

“Gartner expects that growth in 2007 will moderate slightly, due to a projected slowdown in U.S. economic growth and fractional growth in Europe and as buyers consider their options for moving to new application architectures.” The early cloudy skies clear up beginning about 2008 in the Gartner vision and strong forward momentum will then be gained, theoretically due to end-users’ new migration and implementation needs.

Chief in success for the five years is expected to be the marketing automation subsector, forecasted to experience 11.2 percent CAGR through 2010. The study preaches vigilance, though, whilst simultaneously forecasting success. “Vendors have indicated strong competitive pressures, as well as pricing pressure from buyers … Many buyers are on their second generation CRM implementations and are now more cognizant of requirements, and more savvy in negotiating with vendors.”