Is CRM the largest software market in the world?

Published on the 17/04/2018 | Written by Jonathan Cotton

According to Gartner it is, but it’s more about the rise of martech and CX than core CRM rollouts…

According to new research from advisory firm Gartner, last year was a turning point for the software market as CRM overtook database management systems (DBMSs) to become the largest software market in the world.

By 2017’s end, global CRM software revenue amounted to about US$39.5 billion for the year. DBMS revenue however only amounted to a measly US$36.8 billion over the same period.

“In 2018, CRM software revenue will continue to take the lead of all software markets and be the fastest growing software market with a growth rate of 16 percent,” says Julian Poulter, research director at Gartner.

These numbers are not simply the result of new investment in core CRM systems however. The impressive figures come from a combination of software investments Gartner broadly defines as CRM, but are in fact made up of new peripherals, like lead management, voice of the customer and field service management, all of which achieved over 20 percent growth last year. In other words, the Salesforces and ServiceNows of the world.

Globally tech spending is up, of course. Gartner puts the increase at around 6.8 percent for 2018, up 1.8 percent from earlier predictions.  That’s the highest annual growth rate the company has forecast since 2007, but “not a sign of a new cycle of IT growth”, apparently.

“The declining U.S. dollar has caused currency tailwinds of 3.2 percent. Spending on IT around the world is growing at expected levels, and 3.0 percent is in line with the expected global economic growth of 3.3 percent in 2018. Multinational technology vendors will need to hedge against further currency fluctuations in 2018.”

And as marketing tech hits its stride, expect to see new entrants making gains and bigger vendors successfully cross-selling additional modules to existing customers – from IT Services to HR Management for example.

“Organisations are keen to avoid silos of information and to obtain a 360 degree view of the customer, says Poulter.

“The 360 degree view allows better application of artificial intelligence to make the users of the CRM system more effective.”

Expect this particular CRM boomtime to continue, at least in the short term, as CRM, CX and marketing tech spending increases as companies move to comply with the sweeping new European General Data Protection Regulation rules.

“Expect this particular boomtime to continue, at least in the short term, as CRM, CX and marketing tech spending increases.”

“It is critical that organisations are compliant with GDPR as soon as possible, or at the very latest May 25, because when customers don’t trust an organisation’s customer data protection, they put their own safeguards in place, like providing false data or closing accounts,” pitches Bart Willemsen, research director at Gartner.

“This reduces an organisation’s chances of reaching the right customers with the right offers at the right time.”

“Poor CRM will lead to a privacy violation and a GDPR sanction. Application leaders need to enhance control over personal data usage throughout the data life cycle and safeguard processed personal data so that it is not used beyond the context of predefined and documented use cases.”

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