Customer Relationship Management Market Assessment 2006

In 2005, there was a resurgence of interest in customer relationship management (CRM), with commentators, as they had in the late 1990s, reiterating that CRM is about more than technology — it is about putting the customer at the heart of the business. However, a new phrase has entered the CRM lexicon — customer experience management (CEM) — in order to describe the strategy, as opposed to the technology that facilitates the execution of the strategy.
This Market Assessment report is concerned with the technology; technology providers have moved on, have been developing their products to embrace the demands of the marketplace. Those demands include: technology that can link the core CRM applications of customer service, sales and marketing with other applications at play in the organisation; technology that can reduce costs; and technology that can be accessed over the Internet.

The largest surge has been towards the technology that can be accessed via the Internet, with pioneers in this field, such as salesforce.com, being joined by other major vendors (such as Siebel and SAP) taking advantage of the wider availability of broadband, with their own online offerings. The terminology has changed in the past few years too, from application service provider (ASP), which referred to systems hosted on vendors' own servers rather than those installed within the client company, to Software as a Service (SaaS), or hosted solutions, which means the same thing.

Hosted solutions are ideal for smaller companies; rather than incurring enormous set-up, installation, training and maintenance costs — as well as having to pay licence fees for each user — they simply pay for access to a system designed for them but hosted elsewhere.

These advances mean that the profile of the marketplace has changed. The distinctions between those offering enterprise resource planning (ERP) applications and those offering CRM applications have blurred, as developers in each field have extended their offerings. With all major vendors also making forays into the hosted arena, the distinctions are continually made less clear.

There are fewer competitors in the market than previously. Barriers to entry are high and, of the plethora of CRM vendors that emerged in the early part of the century, many have either been swallowed up by larger players or have gone into administration.

The market is consolidating: Siebel Systems — for so long the CRM touchstone — was acquired by Oracle early in 2006; other major vendors have also lost their independence to global corporations.

The emergence of new markets — in China especially — is one of the key drivers of the mergers discussed in this report. Consolidation strengthens the market, and merged companies can perform better in a global market.
Another driver in the CRM market is the emergence of Microsoft, with its own solutions aimed very much at smaller companies. Microsoft CRM provides developers with a platform upon which they can build their own branded solutions for their own niche markets, but it also provides small to medium enterprises (SMEs) with the means to improve their own services and compete against larger rivals. In addition, Microsoft works with established CRM and ERP vendors so that CRM applications can interact with Microsoft desktop and office applications, allowing data from CRM applications to be viewed through, for example, Microsoft's Outlook.

Wireless technology has also advanced, affording greater access to CRM systems while users are mobile. Advances in Internet telephony and broadband technology have meant that developers have been able to advance voice over Internet protocol (VoIP) to the point where real cost savings can be made, especially in the call centre.
Early CRM evangelists insisted that CRM was not a passing management fad and that it would change forever the way companies did business. The early adopters provided the testing beds for technology that had not yet reached its potential, but the high cost of implementation did not provide the size of return investors in this technology were looking for. CRM went back to the drawing board and it is still developing. However, it is now clear that the early CRM evangelists were right about the potential of this technology. SHOW LESS READ MORE >

Executive Summary

1. Introduction

OVERVIEW

DEFINITION

REPORT OBJECTIVES

PROBLEMS ENCOUNTERED

RESEARCH

2. Strategic Overview

MARKET DYNAMICS
CRM Slowdown
CRM Failure
Resurgence of Interest — Key Drivers

MARKET SECTORS

TOTAL INDUSTRY VALUE AND GROWTH
Value
Table 1: Key Note's Previous Forecast Worldwide Market for CRM Applications ($bn), 2002-2007
Table 2: Estimated CRM Applications Market Size Based on Applications Revenues ($m), 2003-2005
Growth
Market Share

DISTRIBUTION

COMPETITIVE STRUCTURE
Market Leaders
Microsoft Inc
Oracle Corporation
SAP AG
SSA Global
Sage Group PLC
salesforce.com
NetSuite Inc
FORTUNE Corporation Rankings
Table 3: FORTUNE Top Ten Computer Software Corporations by Top 1,000 Rank by Revenue and Profit ($m), 2005

ADVERTISING AND MARKETING
Table 4: Main Media Advertising Expenditure on UK Software Business Solutions (£000), Year Ending March 2006
INDUSTRY AWARDS
CRM Guru Awards
ISM Top 15 CRM Enterprise Winners
CRM Enterprise
CRM SMB
CRM Magazine 2005 CRM Leader Awards
Influential Leaders
Hall of Fame Entrant
Category Winners

THE CONSUMER
Table 5: Customer Buying Influences by Dimension Factor (% of ratings), 2006
Table 6: Organisations' and Customers' Perspectives of CRM

MARKET FORECASTS
Table 7: The Forecast Worldwide Market for CRM Applications ($bn), 2006-2010
3. Market Leaders

BACKGROUND
Major Players
Table 8: Top 14 Global Software Organisations' Market Share by CRM Licence Revenue ($m), Year Ending December 2005
CRM Specialists
InvisibleCRM
SugarCRM Inc
Communispace Corporation

THE MID-MARKET

INDUSTRY TRENDS
Software-on-Demand
Salesnet Inc
RightNow Technologies Inc
Other Players
Google Searches CRM Market
Wireless CRM
Antenna Software Inc
Maximizer Software Inc
salesforce.com Inc
Saratoga Systems Inc — Apresta
Vettro Corporation
Consolidation

CRM EXHIBITIONS
UK Events
The European Conference on Customer Management
Customer: Strategy & Management
CRM in the Public Sector
Customer Relationship Management Growth Strategies 2006
US Events

4. CRM Support Services

BACKGROUND

DATA MANAGEMENT
Factors to Consider
Understanding
Improving
Protecting
Data Management Agencies
Datanomic Ltd
Informatica Corporation
Softlab Ltd

ANALYTICS
Analytics Leaders
SAS Institute Inc
SPSS Inc
Teradata Corporation
ThinkAnalytics Ltd

CALL-CENTRE TECHNOLOGY
Key Call-Centre Software Developers
Avaya Inc
What Is the Difference Between IP Telephony and VoIP?
Evoxus Ltd
FrontRange Solutions USA Inc
Interactive Intelligence Inc
Kana Software Inc

CRM SUPPORT EXHIBITIONS
UK Events
Call Centre Expo 2006
Customer Relationship Management Growth Strategies 2006

5. An International Perspective

ECONOMIC OUTLOOK

CHINA
Economy
Market Growth
Market Developments
Table 9: China CRM Software Vendors' Evaluation — Survey Perspective, 2005
Hosted Solutions
2008 Beijing Olympic Games
China CRM Forum
Leading Chinese CRM Vendors
Powerise Information Technology Co Ltd
Kingdee International Software Group Company Ltd
UFIDA Software Co Ltd

RUSSIA

CONSUMER BEHAVIOUR

6. PEST Analysis
POLITICAL FACTORS
ECONOMIC factors
SOCIAL factors
TECHNologICAL factors

7. CRM Roundtable
Roundtable Discussion
Interviewees
Kevin Broome, Marketing Manager, South West Trains
Adrian Mutti, Sales and Marketing Director/Co-Founder, Romtronics
Grahame Newell, CRM Project Manager, An Post
Steve Roberts, Business Director, Essex Medical + Forensic Services
Questions and Answers
What Are The Three Most Important Issues To Consider When Implementing A CRM System?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts
What Has Proved To Be The Single Most Important Benefit Of Your CRM Strategy?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts
Have You Been Able To Measure How Much Customer Satisfaction Has Improved? If So, Can You Indicate How This Area Has Improved?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts
Have You Been Able To Measure How Much Employee Satisfaction Has Improved? If So, Can You Indicate How This Area Has Improved?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts
Have You Been Able To Measure How Sales Have Improved? If So, Can You Indicate How This Area Has Improved?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts
Are All Of Your Organisation's Functions Linked To Your CRM System?
Adrian Mutti
Grahame Newell
Steve Roberts
If Not, Do You Run Separate Systems For Other Functions? Which Functions?
Adrian Mutti
Grahame Newell
Steve Roberts
Which CRM System Are You Currently Using?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts
Is It An Installed System, Web-based System Or A Mixture Of Both?
Adrian Mutti
Grahame Newell
Steve Roberts
What Are Your Plans For Upgrading/Rolling Out Your CRM System In The Future?
Kevin Broome
Adrian Mutti
Grahame Newell
Steve Roberts

8. Company Profiles

AMDOCS LTD
Corporate Information
Strengths and Weaknesses
Products
New Product Development
Brand Development
Innovations
Advertising
Distribution
Profitability
Future Company Developments

FRONTRANGE SOLUTIONS USA Inc
Corporate Information
Strengths and Weaknesses
Products
HEAT Product Suite
GoldMine Product Suite
New Product Development
Brand Development
Innovations
Advertising
Distribution
Profitability
Future Company Developments

INFOR GLOBAL SOLUTIONS
Corporate Information
Strengths and Weaknesses
Products
Brand Development
Innovations
Advertising
Distribution
Profitability
Future Company Developments

ORACLE CORPORATION
Corporate Information
Strengths and Weaknesses
Products
New Product Development
Brand Development
Advertising/Marketing/Sales
Distribution
Profitability
Future Company Developments
salesforce.com
Corporate Information
Strengths and Weaknesses
Products
Applications
New Product Development
January — Winter `06 and The Business Web
March — Unlimited Edition
April — AppExchange Mobile
Brand Development
Innovations
Advertising/Sales/Marketing
Distribution
Profitability
Future Company Developments

SAP AG
Corporate Information
Strengths and Weaknesses
Products
New Product Development
Brand Development
Innovations
Advertising
Distribution
Profitability
Future Company Developments

9. The Future

PRODUCT DEVELOPMENT
Wireless Technologies
Hosted Applications
Open-Source Software

MARKET DEVELOPMENTS

MARKET SHARE

MARKET FORECASTs
Table 10: The Forecast Worldwide Market for CRM Applications ($bn), 2006-2010
10. Consumer Confidence

METHODOLOGY

KEY FINDINGS THIS QUARTER

THE WILLINGNESS TO BORROW
Confidence Declines Again
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006
Signs That the Decline Could be Bottoming Out
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), May 2005, August 2005, November 2005, February 2006 and May 2006

THE WILLINGNESS TO SPEND FROM SAVINGS
Sharp Decline in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), May 2005, August 2005, November 2005, February 2006 and May 2006
Table D: The Proportion of Adults Without Any Savings (%), May 2005, August 2005, November 2005, February 2006 and May 2006
Borrowing Grows in Relative Importance
Table E: The Average Amounts Adults are Confident Spending to Purchase Expensive Items (£ and %), May 2005, August 2005, November 2005, February 2006 and May 2006

11. Further Sources
Associations
Publications
General Sources
Other Sources
Bisnode Sources

- AMDOCS LTD
- Antenna Software Inc
- Avaya Inc
- Communispace Corporation
- Datanomic Ltd
- Evoxus Ltd
- FrontRange Solutions USA Inc
- FRONTRANGE SOLUTIONS USA Inc
- INFOR GLOBAL SOLUTIONS
- Informatica Corporation
- Interactive Intelligence Inc
- InvisibleCRM
- Kana Software Inc
- Kingdee International Software Group Company Ltd
- Maximizer Software Inc
- Microsoft Inc
- NetSuite Inc
- Oracle Corporation
- ORACLE CORPORATION
- Powerise Information Technology Co Ltd
- RightNow Technologies Inc
- Sage Group PLC
- salesforce.com
- Salesnet Inc
- SAP AG
- Saratoga Systems Inc — Apresta
- SAS Institute Inc
- Softlab Ltd
- SPSS Inc
- SSA Global
- SugarCRM Inc
- Teradata Corporation
- ThinkAnalytics Ltd
- UFIDA Software Co Ltd
- Vettro Corporation