• September 1, 2008
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

New Markets and Leaders Emerge

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There’s a lot to absorb in our seventh annual CRM Market Awards issue. Before delving into this year’s highlights, it’s worth noting that the market, as a whole, is still quite healthy. The CRM market grew between 12 percent and 14 percent in 2007, according to published industry reports—marking a fourth consecutive year of industry growth.

AMR Research sized the 2007 market at $14 billion, a 12 percent jump over 2006 revenues. This represents the market’s most significant growth since the dot-com fallout at the turn of the century. While analysts may differ on the market’s exact size and rate of growth, all agree that software-as-a-service (SaaS) is the driving force. And despite some recent macroeconomic volatility, some experts forecast a continued climb for the CRM market. If so, SaaS will likely remain a major factor, but there still will be contributions from emerging niche markets, such as incentive management and open-source CRM. That’s why we’re introducing those categories to this year’s Market Leader Awards.

The first new category, incentive management, is expected to grow 20 percent this year to $300 million in sales, according to our market coverage. These tools are gaining in popularity because they enable sales teams to worry less about tracking compensation and more about increasing it. While open-source CRM, this year’s second new category, reportedly only accounts for less than 1 percent of the CRM market, interest in this market subsegment is in full swing. Check out some of the recent open-source tweets we included in our monthly “CRM on Twitter” box. Plus, take a look at which open-source vendors are leading the way.

There’s also excitement in some of the perennial Market Leader categories. Zoho CRM, for example, catapulted its way onto this year’s Small Business Suite CRM leaderboard with its tempting offering, which is free for up to three users. Because of his ability to keep costs down and innovation high, we’re also singling out Sridhar Vembu, chief executive officer of AdventNet (parent company of Zoho), as a 2008 Influential Leader.

As one chapter begins, another chapter ends—much like Accenture’s five-year reign atop the Consultancies leaderboard. It’s not that Accenture is faltering much (though the firm did slip more than a point in its customer satisfaction score from last year). Actually, we’ve noticed an interesting new market approach. That’s why we’re honoring Kevin Bandy, a partner at the firm, as an Influential Leader for his work in helping companies assess the effectiveness of an organizational restructuring strategy—stuff that isn’t taught even in the best business schools. So who replaces the deposed king in the Consultancies category? Suffice to say that the heir to the throne impressed analysts with its focus on CRM.

There’s also more buzz around wireless CRM tools. We’ve lauded three wireless companies with Rising Star Awards this year for their potential to revolutionize the wireless CRM market. Apple released its more enterprise-ready, 3G-enabled iPhone—already Oracle and Salesforce.com have written applications native to the iPhone. (For more on this, read “CRM Dials Into the iPhone,” by Senior Editor Marshall Lager.) Joining Apple is Ribbit, for its ability to integrate its mobile voice solution with business applications, and Twitter for bringing social media to mobile devices. Rising Star Awards coverage begins here.

I can’t highlight all of the market shifts and trends in this column, but you can get a lot more analysis in our full coverage of the 2008 CRM Market Awards. Congratulations to this year’s winners. And, for our readers, we hope you enjoy our most comprehensive Market Awards issue yet.

David Myron
Editorial Director

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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