CRM worth another look, says analyst

Continuing source of revenue, resellers told.

Vendors and resellers should look again at customer relationship management (CRM) applications as a continuing source of revenue, according to industry analyst IDC.

An IDC report published last week showed worldwide CRM applications turnover would grow from $6.2bn (£4.3bn) in 2000 to $14bn in 2005.

Although North America is set to continue its market domination, the firm predicted that western European turnover will grow by 22 per cent between 2000 and 2005.

"CRM revenues in western Europe have accelerated due to an increased understanding of CRM issues and the internationalisation of product offerings," said Mary Wardley, director of IDC's CRM applications software programmes.

IDC claimed that new products, companies and technologies are the key drivers to growth in the industry.

"The rise of new players and products shows the many fronts on which end-users are fighting the CRM battle," said Wardley.

"Despite the current economic downturn, end-user organisations continue to rate CRM as critical to their ongoing business strategy.

"End-user response to the market condition is to plan an ongoing implementation strategy over an extended period of time rather than purchase the total solution up front. This will fuel CRM applications growth over a longer period of time."

The analyst firm said robust growth was experienced across all three markets (sales automation, marketing automation and customer service, and contact centre applications) in 2000, with no market showing turnover growth below 70 per cent.

Siebel maintained its stranglehold in this market, outperforming competitors by a huge margin.

The company's market share rose to reach 23 per cent by 2000.