Gartner: Worldwide CRM revenue grew 12.5 per cent in 2012

Salesforce.com takes over the top spot in terms of revenue, ahead of SAP

Global CRM (customer relationship management) revenue grew 12.5 percent last year to US$18 billion, a rate three times that of all enterprise software segments on average, as companies look to acquire more business and serve existing customers better, according to a new Gartner report.

Salesforce.com overtook SAP as the largest single CRM vendor in Gartner's survey, with Oracle, Microsoft and IBM following those two companies. SAP remained the top CRM vendor in Europe, however, according to the report, which was announced Monday.

About 40 percent of CRM revenue was derived from SaaS (software as a service) products, reflecting Salesforce.com's top ranking.

The CRM market has been charged up by a wave of acquisitions, particularly in the area of marketing software, evidenced by Oracle's purchase of Eloqua, Salesforce.com's acquisition of Buddy Media and IBM's purchases of Unica and Coremetrics.

In all, there were more than 50 acquisitions within the CRM market between 2009 and 2012, according to Gartner. "With corporate cash at all-time highs, many vendors are willing to pay high premiums to acquire specific technologies and expertise in an increasingly dynamic and competitive CRM market environment," the report states.

This wave of consolidation has led to a situation today where the top 10 CRM vendors by revenue hold more than 60 percent of the market, according to Gartner's survey.

But smaller players are growing quickly as well. Zoho, for example, saw CRM revenues rise 81.2 percent in 2012, according to Gartner. This was made possible because of smaller vendors' "ability to build out faster to provide SaaS, social, e-commerce and mobility," the report states.

While Salesforce.com has taken the top spot among CRM vendors, it will have to defend the crown vigorously as rivals improve their SaaS offerings, Gartner said. "Oracle and IBM are now positioned to take some of the cloud business in the future, especially in the global large-enterprise arena," the report states. "Microsoft has also started to put pressure in the small or midsize business for cloud, in which Salesforce.com has not yet had a formidable competitor with deep pockets and a large ecosystem."

However, Salesforce.com has also diversified its product portfolio away from core CRM through ventures such as the Force.com development platform and forays into human resources and financial applications.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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