Salesforce has knocked rival SAP 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 annually by 26 per cent to $2.5bn (£8.06bn), overtaking SAP's CRM sales figure of $2.3bn, which only grew by 0.1 per cent over the same period. The pair's market share for 2012 stood at 14 and 12.9 per cent respectively.
Overall, the CRM market grew 12.5 per cent in 2012 to $18bn; three times the average market growth for all enterprise software, according to Gartner.
All the top-five vendors enjoyed a boom in their CRM sales last year, with Microsoft and IBM joining Salesforce in posting double-digit annual growth for the year – 26 per cent and 39 per cent respectively. Oracle's CRM revenue for 2012 rose by 7.8 per cent to top the $2bn 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," she explained.
The top five CRM vendors – Salesforce, SAP, Oracle, 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 per cent to $9.4bn 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 per cent of total CRM software revenue in 2012.
Forty per cent of CRM sales in 2012 were SaaS-based, and Gartner added that organisations of all sizes were keen to replace legacy systems with alternatives.
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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