Gartner provided welcome news to the CRM industry earlier this month when it released estimates that overall CRM revenue would rise by about US$1 billion annually through 2011; for this year, CRM software revenues were projected to exceed $7.4 billion — a 14 percent increase from 2006.
Not surprisingly, attendees at its annual CRM Summit, held last week, walked through the conference hall doors expecting an upbeat assessment of the industry. For the most part, they were not disappointed.
“I attended to get a sense of the market in general and was not surprised to learn they expect more growth,” Wes Trochlil, president of Effective Database Management, told CRM Buyer. “In fact, they made a point of talking about their earlier position that CRM was a failure, but now they have changed their opinion.”
Indeed, Trochlil wrote in his blog, here was a surfeit of data points supporting and chronicling the CRM industry’s trajectory.
“While I thought the conference was good, one thing that struck me was this: Have the Gartner analysts never read a single tip on appropriate use of PowerPoint? Without exception, every Gartner presenter had about 10 times as much information on their slides as could be reasonably read. I typically sat in the middle of the room and usually was unable to read most of the slides. I can’t imagine what it was like in the back of the room.”
The only jarring note for Trochlil was the Gartner statistic that said it expects 25 percent of CRM projects to be delayed because of lack of talent.
Common Themes
Gartner held break out sessions and seminars that touched upon nearly every aspect of a CRM operation and the 50 or so sub-verticals that are included in the niche. While these varied significantly — from four possible goals of a CRM system to lessons learned from early adopters and all points in between — there were enough common themes expressed at the event for attendees to recognize as core messages.
Cliff Conneighton, senior vice president of marketing at ATG, gathered from the event that Web 2.0 technologies are broadening the definition of CRM — as well as its universe of vendors, he told CRM Buyer.
“Gartner was very big on user generated content and the various forms of communities that have developed online as taking a more important role in a CRM operation,” he said. “I think for a long time CRM was the realm of two large players. This year, though, there was less of a sense of that and more of an impression that there are a number of players out there doing interesting things in these areas.”
It’s not just about Siebel on a desktop anymore, he added.
Hybrid SaaS
David van Toor, senior vice president and general manager for Sage CRM Solutions, North America, was intrigued by Gartner’s prediction that the Software as a Service (SaaS) industry was maturing — and moving to a hybrid model, he told CRM Buyer.
“We have tended to think of SaaS as dominated by one player — Salesforce.com,” he said. The industry, though, is poised for a shake-up, van Toor believes, “and out of that will come a customer base more able to handle a mixed environment.”
There is little doubt anymore about the future for SaaS: In 2006, it represented 12 percent of total CRM software revenue; this year it’s on track to reach nearly 14 percent, or more than $1 billion in CRM software revenue, according to Gartner.
For his part, Tom McNeal, senior vice president of TARGUSinfo, saw one consistent message Gartner tried to relay: the importance of developing a strong foundation for segmentation, he said.
“Gartner understands the organizational dynamics of rolling out sales analytics and predictive modeling for marketing, and identifying solutions where there is a win for both groups,” he told CRM Buyer. “They highlighted that in a couple of different sessions.”
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