Trends - CRM set for hot growth

The customer relationship management (CRM) market is expected to grow at between 30 and 50 per cent annually for the next five years, supplanting ERP as one of the hot IT growth areas.

The customer relationship management (CRM) market is expected to grow at between 30 and 50 per cent annually for the next five years, supplanting ERP as one of the hot IT growth areas.

Research by investment banking group Granville found that enterprise resource planning (ERP) sales will slow to between 10 and 15 per cent annual growth rate as firms shift from back-office to customer-facing functions.

The research showed that CRM spending is being held back by a fragmented vendor market and buyer uncertainty, but it is expected to consolidate over the next two years, triggering growth.

But SAP resellers could profit with the software vendor's long-awaited entrance into the market late this year.

Granville predicted that firms that will dominate in CRM will be those that dominated ERP.

While moving towards CRM is not time-critical, it will be imperative for VARs and integrators that want to maintain growth rates of over 30 per cent, it said.

Granville also found that while the "days of ERP software and services are over, the industry is far from dead". Opportunities remain for ERP software enhancement work at customers that have already installed ERP software.

However, ERP's penetration of the SME market will only come with the growth on an application service provision model.