COPENHAGEN, September 19, 2002 - The customer relationship management (CRM) applications market has hit the brakes worldwide and will continue to regroup throughout 2002 in Europe, according to the latest research by IDC. The European CRM market grew by just over 22% in 2001, putting heavy pressure upon software vendors accustomed to triple-digit growth rates and large ticket deals. The market will drop even further in 2002 to an expected growth rate of less than 8%.
According to Bill Clough, Research Manager with IDC's European Software Group, "CRM solutions have taken a tremendous hit over the last 12 months. However, end users still believe that there is good reason to invest in this technology area, albeit more cautiously than before". A rebound is projected during 2003 and 2004 reaching nearly 14.4% growth, illustrating that even a maturing market like CRM offers significant opportunity in the years ahead.
Southern Europe has yet to prove to be the "promised land" expected over the last few years. The Nordic and Benelux regions continue to be centers of activity for the comparative country size. The most successful vendors in the CRM market are now realizing that vertical specialization is a necessity coupled with a new singular focus on alliances and services partners. "Between 1998 and 2000, large companies in Europe showed considerable willingness to spend large amounts on IT systems in order to achieve "customer centricity". In the last year, however, the mania has reduced to realistic levels and forced caution into most CRM initiatives", continues Bill Clough.
Over the coming years IDC expects the CRM applications market to remain among the stronger growing segments in the software industry. Notable in this trend will be the growing acceptance of CRM as a strategy among the smaller companies as well as being the consequence of supply chain automation and collaborative commerce implementations. These two areas usually tie into or include various parts of the CRM puzzle. "Among other market forces that will drive growth in the Western European CRM applications markets over the next five years are the increasingly strategic role of business intelligence (BI) and analytic applications in enterprises and with CRM applications data, and the fact that the vast number of mid-sized companies will finally begin to address IT issues and software in particular. Mid-sized companies, for whom CRM is still a very abstract and uncertain issue, will be under pressure from partners and parent companies to update business processes", concludes Bill Clough.
The IDC study Western European CRM Applications Market Forecast & Analysis, 2002-2006 (IDC #LC24J ) examines the CRM applications market for 2000 through 2006 and leading vendor performance and profiles. Market revenue forecasts for the overall CRM applications market are included for a five-year period 2002-2006 in each of sixteen countries and on each of eight operating environments. A discussion is also provided of market drivers and inhibitors based on IDC's most recent knowledge of the Western European CRM applications market and the major players. The study also contains a leadership grid, pinpointing the position of the leading vendors based on a number of factors.
This document is available on www.idc.com or from your local IDC office.
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For more information, contact:
Bill Clough
+45 39 16 22 47
bclough@idc.com
Lotta Hållén-Kragh
+45 39 16 22 42
lhallen@idc.com