Mergers and acquisitions will continue

Analyst firm Gartner, Inc. predicts be no letup in merger activity in the CRM industry even after the massive buyouts of Siebel and PeopleSoft undertaken (and taken over) by Oracle. In press material, Gartner lists twelve major industry acquisitions within the last two years. The Gartner report cited CRM founders “selling out in capitulation” or “the slow or negative pace of growth.”

According the company analysts, such trends show no sign of letting up, ergo pointing to further consolidation in the industry. Gartner also singled out Salesforce.com, not least of all for its reported seventy-seven percent growth rate, for its software as a service model, “used successfully in the CRM market [to place] pressure on software providers.” Recent winners in CRM in the Gartner brain trust’s minds are Microsoft, market leader SAP and Salesforce.com.

Microsoft and SAP “have a pattern of technology purchases when gaps have been identified.” Salesforce, meanwhile, “has the resources and desire to gain scale and close the gap with two market leaders.” And Oracle? According to Gartner, “Oracle has not finished purchasing CRM vendors.” Oracle, they say, “Over the coming year … will look at adding analytics, industry-specific solutions, work force automation and an on-demand software as a service vendor.”

Gartner’s newest market share figures show SAP in the CRM industry’s top spot, with reported revenue of US $1.47 billion in 2005 for a 25.6 percent market share. Siebel placed second at US $966 million and 17 percent; Oracle technically held third place with US $367 million and 6.4 percent, but Siebel and Oracle’s combined total represents over US $1.3 billion, tightening the gap between no. 1 SAP and no. 2. 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.