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February 15, 1999


By CBR Staff Writer

Revenues from customer relationship management (CRM) software licenses will exceed $7.5bn by 2002, compared with only $762m in 1997, according to market analyst AMR Research. Accompanying this impressive growth will be an increase in the number of mergers and acquisitions in the sector as vendors attempt to build CRM suites and broaden their product offerings, according to AMR. The total aggregate revenue of the CRM market will likewise increase substantially over the next five years, sustaining a compound annual growth rate of 58%. The CRM market was worth $1.2bn in 1997, and this is expected to increase to $11.5bn in 2002. AMR estimates that the largest segment of the CRM market is technology-assisted selling, which accounts for 59%. Customer support, which involves a combination of customer service and field service, is the second biggest sector. The bulk of the market growth has been driven by North American Fortune 500 companies, which make up 77% of the CRM market. Customers with revenues higher than $1bn accounted for more than 40% of sales, yet the greatest sales growth was in the mid-market sector (companies with revenues of between $250m and $999m), which enjoyed 113% growth from 1996 to 1997. AMR expects sales in this sector to continue to accelerate as prices drop and smaller companies adopt CRM applications.


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