Spending on customer relationship management (CRM) software will rebound dramatically next year, according to analysts.
A report into CRM spending predicts that the economic slowdown blighting much of the industry would see 2002 as a fairly flat year. Analyst Aberdeen Group predicted a rise of only two per cent on last year.
But Denis Pombriant, managing director of Aberdeen, said that 2003 will see a big leap in spending. "Double-digit growth should resume in 2003 and we expect CRM spending to reach $19.6bn by 2005," he explained.
The prediction matches that of AMR Research, which believes that 2003 will see a 16 per cent growth in the worldwide CRM market. AMR analyst Lindsey Higg indicated that CRM spending will "peak in 2004".
The growth will be fuelled by purchases from mid-sized enterprises, said Pombriant.
The news will be a fillip to the channel, where relationships have been built over a number of years.
It is also the area in which Microsoft has been focusing its CRM effort. Its presence in the market will alert smaller firms to the possibilities, according to Kevin Lucas, senior analyst at AMR.
But Higg warned that the "vast majority of CRM sales are direct". The analyst said that 77 per cent of all CRM sales are made this way.
AMR predicted that the public sector could be a valuable source of new CRM sales.
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