CRM Is Up Down Under
CRM software revenue in the Asia-Pacific region will grow at a compound annual growth rate (CAGR) of 16.8 percent from 2006 to 2011, according to a new study recently released by Gartner. The firm's research, which highlights the region's expanding importance for CRM vendors, found Australia leading the way in CRM, claiming 42.8 percent of Asia-Pac's CRM market in 2006.
The Asia-Pacific region's strong uptake of CRM is being fueled by growth across all subsegments, Gartner's findings show -- with marketing, in particular, laying claim to 23.5 percent of CRM software revenue. And unlike the United States or Europe / Middle East / Africa (EMEA) -- regions that are experiencing explosive growth in software-as-a-service (SaaS) -- the Asia-Pacific market has, to date, been relatively old-school, driven by traditional deployments of installed software, says Denise Ganly, an analyst and research director of enterprise applications with Gartner. "The [Asia-Pacific] market is relatively immature compared to North America and EMEA," she says. "SaaS and on-demand hasn't taken off in the same way, and in many Asian countries this will not likely change due to the cultural barriers associated with such a deployment model."
Despite the so-called immaturity, Gartner expects market consolidation and burgeoning on-demand use to stimulate CRM expansion overall in the region. Australia in particular will experience continued growth -- especially organic
growth -- thanks in part to what Gartner sees as the country's strong IT infrastructure and partner channels for CRM vendors, as well as the availability of integration and support services.
"The Australian market will continue to grow as end users extend their applications beyond ERP, but the market will also experience growth because of the continued adoption of on-demand solutions, as well as CRM solutions for self-service customer support of campaign management," Ganly writes in the report. "Even in Australia the CRM market is relatively immature, with a lot of potential for organic growth. Companies across the Asia-Pacific region are focusing on analyzing customer data and trying to gain the whole view of the customer, rather than embarking on [automation] for their sales force."
Recent research by Gartner also highlighted the growth of business intelligence (BI) software in the Asia-Pacific region. The BI market grew 16 percent in 2005 to reach $491.8 million in 2006, with Japan accounting for more than half of that overall growth. India was listed as the fastest-growing BI market, with software revenues for BI platforms reaching $16.4 million in 2006, up from $12.1 million the previous year. In many ways, CRM and BI software are growing hand-in-hand, Bhavish Sood, a principal analyst with Gartner, writes in the report. This sort of software is "nice to have" as businesses in the Asia-Pacific region continue to develop beyond basics such as ERP and accounting software, he says.
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