Editor’s note: As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.
Salesforce.com Inc. has knocked rival SAP AG from the top spot in the CRM market as its revenue for 2012 rocketed by more than a quarter.
Last year, Salesforce’s worldwide CRM software revenue grew 26 percent to $2.5 billion, overtaking SAP’s CRM sales figure of $2.3 billion, which only grew by 0.1 percent over the same period. The pair’s market share for 2012 stood at 14 and 12.9 percent, respectively.
Overall, the CRM market grew 12.5 percent in 2012 to $18 billion — three times the average market growth for all enterprise software, according to Gartner.
The top-five vendors all enjoyed a boom in their CRM sales last year, with Microsoft Corp. and IBM Corp. joining Salesforce in posting double-digit annual growth — 26 percent and 39 percent, respectively. Oracle Corp.’s CRM revenue for 2012 rose by 7.8 percent to top the $2 billion sales mark.
Gartner’s vice president Joanne Correia said intense competition drove the market’s growth.
“Competition among CRM software vendors really heated up in 2012, as major players continued to vie for broader market penetration internationally and more widespread adoption within mid-size to large enterprises,” Correia explained.
The top five CRM vendors — Salesforce, SAP, Oracle Corp., Microsoft and IBM — accounted for almost half of the CRM software revenue last year, despite sales for the remaining CRM vendors growing annually by 10.7 percent to $9.4 billion last year.
While SAP lost its crown as the worldwide CRM leader last year, it remained the biggest vendor in terms of revenue in western and eastern Europe. The two regions, along with North America, accounted for 80 percent of total CRM software revenue in 2012.
Forty percent of CRM sales in 2012 were SaaS-based, and Gartner added that organizations of all sizes were keen to replace legacy systems.
Ian Siebert, managing director of reseller CRM Online, said his business has benefited from the surge in demand for cloud-based products.
“More and more businesses are looking at moving to the cloud, and we are seeing growth,” he said.”Small businesses especially know that moving all business applications to the cloud means they are backed up and that this makes it easier to get on and grow their businesses.”
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