An Assessment of the Growing Customer Relationship Management Market - CRM as an Effective Cost Saving Tool and a Means of Increasing Sales

DUBLIN, Ireland--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/bd45e0/customer_relations) has announced the addition of the "Customer Relationship Management Market Assessment 2008" report to their offering.

The past 3 years have seen much consolidation in the customer relationship management (CRM) industry, with some of the large CRM players being acquired by even larger software development companies. The divide between enterprise resource planning (ERP) software developers and CRM software developers has closed, as all software developers have extended their product ranges to provide total business-management solutions for their customers and have either acquired the technologies to integrate the functions provided by different software solutions or have developed them themselves.

True to its early promise, CRM has turned out not to be a passing fad, but rather an essential way for organisations to understand their customers and, in the words of one of the respondents to the CRM roundtable discussion in this report, 'sell more now!' Technological advances have allowed organisations to link their `front-office' functions (i.e. customer contact centre operations, marketing and sales) to their `back-office' enterprise solutions (i.e. accounting, inventory, payroll and personnel, stock control, etc.). This was, after the initial euphoria from CRM early adopters, the big issue, and one that barred companies without huge IT resources — and huge development budgets — from entering the CRM arena.

This has changed: CRM products, understanding of these products, and the technology involved have all improved, allowing vendors to begin marketing their products to small to medium businesses (SMBs).

At the same time, Web 2.0 — the much vaunted new era of Internet usage enabled by the widespread availability of broadband for greater access — has given rise to a new generation of Internet users, both developers and consumers, who use open-source technology and the Internet to collaborate and network online.

Users have become more mobile. CRM systems had already developed Web-based accessibility, enabling sales and other personnel access to the system via a Web browser, so it has been a small step for vendors to make the entire system available to the whole organisation this way but by hosting it themselves.

Hosted solutions provide a relatively low-cost entry for SMBs and, with this sector being increasingly targeted by vendors, the case for developing their own hosted offerings has proven irresistible: almost all of the major CRM (and ERP) vendors now offer hosted solutions.

Nonetheless, these companies face competition; there are a number of software companies, backed by the venture capital that has fuelled so much of the economic growth seen in recent years, that have entered the hosted CRM market, designing their products largely around sales and marketing processes.

For SMBs, facing up to a decline in economic growth, and increasing costs, the attraction of being able to increase productivity and to generate better-quality leads for a low monthly subscription fee is attractive. It is likely that vendors offering basic CRM functionality to SMBs will enjoy some growth during the next 2 to 3 years (i.e up to 2010 or 2011).

The question is whether or not they will survive. As customer needs change and the economy picks up again, SMBs may look for deeper functionality. This is where the established software providers — the giants in the marketplace, such as Oracle and SAP — will win. Unless the start-ups have something new to offer that has not been already developed by existing vendors, they will not survive in the long term.

The major software vendors are extremely acquisitive but, having already bought the CRM software leaders, their acquisitions now are all in the area of technological development, where the research and development (R&D) has been done by the target acquisition company, such as in mobile functionality.

Other targets for acquisition are companies that are strong in particular vertical markets: specialists in finance or pharmaceuticals, manufacturing or retail, with large customer bases, will be attractive to acquiring companies, as will be companies that already have a strong presence in emerging markets. Vendors are all looking to extend their geographical reach, into Eastern Europe, China, India and South America.

The CRM industry, even in the face of an economic decline, is growing. Indeed, many of the commentators Key Note spoke to for this report suggested that the economic decline would fuel the continued growth of the CRM industry, as CRM can be the tool used to make cost savings and increase productivity. Moreover, with hosted solutions ready to tap into this need, the short-term future for this sector especially looks very promising.

Key Topics Covered:

- Introduction

- Strategic Overview

- The On-Premise Market

- The Hosted Market

- An International Perspective

- PEST Analysis

- Industry Dynamics

- Company Profiles

- The Future Overview

Companies Mentioned:

- EPICOR SOFTWARE CORPORATION

- INFOR GLOBAL SOLUTIONS

- MAXIMIZER SOFTWARE INC

- MICROSOFT CORPORATION

- NETSUITE INC

- ORACLE CORPORATION

- SAGE GROUP PLC

- SAP AG

For more information visit http://www.researchandmarkets.com/research/bd45e0/customer_relations.