The SME market is emerging as a growth area for customer relationship management (CRM) platforms, as vendors scale down their offerings to cope with the fall in corporate sales, according to research company IDC.
Demand for CRM applications in Europe has dropped to single-figure percentage growth, compared with the triple-figure increases recorded between 1998 and 2000. Growth was just eight per cent in 2002, IDC said.
But Bill Clough, analyst at the company, claimed end-users still see CRM software as a good investment, and the market will rebound modestly in 2003 and 2004. He predicted growth of 14.4 per cent.
"Between 1998 and 2000, large companies in Europe showed considerable willingness to spend money on IT systems in order to achieve 'customer-centricity'," he said. "In the last year the mania has reduced to realistic levels and has forced caution on most CRM initiatives."
Clough added that it is natural for SMEs to follow the corporates into CRM. "The CRM industry is still relatively young and SMEs are watching the market with interest," he said. He added that the UK is ahead of the rest of Europe in terms of SME adoption of CRM.
Keith Fenner, general manager for Europe at software vendor ACCPAC, said the SME space is becoming an important source of CRM demand.
"SMEs typically buy low-end contact management products, but as their requirements become more sophisticated they move to CRM," he said.
He added that margins are high for SME versions of CRM software, and value can be added through consultation as well as customisation.
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