Global CRM sales to hit $11bn by 2008

The worldwide customer relationship management (CRM) applications market will clock up sales of $11.4bn (£6.3bn) by 2008, according to recently unveiled market research.

IDC reported that, although Siebel has retained its number one position in the worldwide CRM applications market this year, its market share has dropped from the levels it achieved in 2002 and 2001.

SAP has effectively established itself in the market, and solidly occupies the number two position.

Buyers continue to stress the importance of demonstrable return on investment (ROI) and total cost of ownership before purchasing CRM applications.

And IDC believes that the emphasis on these two factors will intensify over the next four years.

"The environment has fundamentally changed with respect to purchasing patterns, from optimistic buying to increased requirements for a clear ROI and benefits," said Mary Wardley, vice president for IDC's CRM applications research.

"Happily customers are finding both, and are achieving a meeting of minds with suppliers."

Demonstrating ROI is also rising in importance for conducting sales in the CRM analytics applications market, IDC noted.

The analytic components of CRM applications provide businesses with in-depth insight into customer behaviour.

IDC found that analytics are becoming critical components of customer management strategies.

The analyst said that worldwide CRM analytic applications software market revenues grew 12.7 per cent to reach a "healthy" $909m (£499m) in 2003.

"The consolidation trend in the CRM analytics space is not only due to the big players such as Siebel, SAS Institute, and NetIQ, but to the rapid growth of smaller players like Coremetrics and DoubleClick," said Robert Blumstein, research director for IDC's CRM analytic applications research.