CRM - October 2008 - (Page 17)

Insight SAP Retains Market-Share Lead in CRM Gartner report shows the Wonder of Walldorf still on top—but a lawsuit and other troubles loom T he market for enterprise CRM software remained strong in 2007, according to recent reports from Gartner. And “strong” is really strong in this case: The firm pegged CRM revenue growth in 2007 at a robust 23.1 percent, rising to a total of $8.1 billion. Walldorf, Germany–based SAP led the field in terms of market share again this year, by a comfortable margin. The company held a 25.4 percent share of worldwide CRM revenues in 2007, a slight decline from 2006’s 25.6 percent but still well ahead of runner-up Oracle (16.3 percent in 2007, up from 15.5 percent in 2006). And CRM was hardly a fluke for SAP: In a related Gartner report on enterprise resource planning software, SAP’s market share beat out its nearest rival—Oracle again—by nearly a two-to-one margin, 27.5 percent to 13.9 percent. SAP is certainly a company to be reckoned with, and its market-leading positions are hardly a surprise, but casual discussion of enterprise CRM and ERP vendors rarely seems to begin with SAP—in fact, it’s often “the other company” mentioned after Oracle. Why? “Bear in mind there’s a lot of currency effect in market share,” says Sharon Mertz, research director for CRM with Gartner. “SAP reports in euro; we calculate in euro and then convert to dollars. Given the weak dollar, it makes [SAP] look a little larger.” That’s not the complete answer, though; Mertz notes that Oracle, among other vendors, also benefits from this effect because much of its revenue comes from outside the United States. SAP also performed well during a period in which Oracle was struggling with perhaps the highest-profile of its many acquisitions. “Oracle didn’t do well in 2006, since it closed the Siebel [Systems] acquisition in January of that www.destinationCRM.com year,” Mertz says. A product line often into continued popularity for CRM, as suffers when acquired by a rival, and the companies struggle to hold onto the rivalry between Siebel and Oracle was customers they have. Overall, Gartner saw CRM revenue famously bitter. SAP, by contrast, compounded its own internal growth in and market share continue to consolithat period with the continued success date among the top vendors. (See chart, of Business Objects, a 2007 acquisition below.) In fact, several of the top-five that was immediately accretive to SAP’s CRM vendors outpaced the overall marbottom line. “SAP did well both organi- ket in terms of revenue growth, with Oracle seeing an increase of cally and from the Business 29.8 percent, Salesforce.com Objects line,” Mertz says. “This year, budgets enjoying a rise of 49.8 per“Usually you slow down cent, and Microsoft celebratafter an acquisition, but are being managed ing a whopping 88.6 percent both were strong.” more closely, and year-over-year increase in While some continue to customers can be revenue; SAP’s minuscule criticize the slow develslip notwithstanding, Amopment of SAP Business more discriminating.” docs was the only one of the ByDesign, the company’s midmarket software-as-a-service (SaaS) top-five firms to see a notable decline offering, Mertz says SAP is wise to take in market share, from 5.6 percent in it slow and “focus on making sure it’s 2006 to 5.2 percent last year. Gartner has recommendations to go robust, with top quality and high profitability,” as releasing a bad product can with its market assessments as well— be worse than making customers wait specifically that CRM vendors should focus on offering products, services, and for a good one. The overall CRM market also re- contractual arrangements that enable mained healthy. “Last year, nearly ev- users to create the optimal experience for eryone did very well; it was a matter of their customers. “Top priorities include a rising tide that floats all boats, and online communities, workforce optimizaeven weaker performers benefited,” tion, analytics, multichannel campaign Mertz says. “This year, budgets are be- management, and marketing resource ing managed more closely, and cus- management,” according to the report. One important area of expansion is tomers can be more discriminating with their spending.” This translates in the emerging field known as social The CRM Market: Share and Share Alike COMPANY 2007 REVENUE 2007 MARKET SHARE (%) 2006 REVENUE 2006 SHARE (%) 2006–2007 GROWTH (%) SAP Oracle Salesforce.com Amdocs Microsoft Others Total 2,050.8 1,319.8 676.5 421.0 332.1 3,289.1 8,089.3 25.4 16.3 8.4 5.2 4.1 40.6 100.0 1,681.7 1,016.8 451.7 365.9 176.1 2,881.6 6,573.8 25.6 15.5 6.9 5.6 2.7 43.7 100.0 22.0 29.8 49.8 15.1 88.6 14.1 23.1 Source: Gartner; dollar figures in millions CUSTOMER RELATIONSHIP MANAGEMENT | OCTOBER 2008 17 http://www.Salesforce.com http://www.Salesforce.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - October 2008

CRM - October 2008 Contents Front Office Feedback Reality�Check Customer Centricity The Tipping Point Sprinting Toward Disaster? SAP�Retains Market-Share Lead in�CRM A�Week of Strong Customer�Service CRM�on Twitter Build a Good Event and They Will Come Required Reading There's No Place Like Home The New Breed of CRM�Consultant The Price is Right...You Hope How Much Marketing is Too�Much? The�Sweet Smell of High-Quality�Service The Next Act! For An Acquisition Some Stories Never Get Old CRM�Eases the Pressure For WIKA�Instruments Secret of My Success Re:Tooling Scouting Report Pint of View

CRM - October 2008

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