A report from Gartner has found that global customer relationship management (CRM) software revenue increased 12.5% to $18bn in 2012, compared to $16bn in 2011.
Gartner said that Salesforce.com overtook SAP as the largest vendor in the CRM market as its revenue increased 26% to $2.5bn in 2012, compared to $2bn in 2011.
SAP was at second place with $2.3bn revenue in 2012 followed by Oracle with $2bn revenue, Microsoft with $1.1bn revenue and IBM with $649m.
Gartner vice president Joanne Correia said: "Competition among CRM software vendors really heated up in 2012, as major players continued to vie for broader market penetration internationally and more widespread adoption within midsize to large enterprises."
"Market growth in 2012 was three times the average for all enterprise software, highlighting how CRM is at the eye of the Nexus of Forces storm," Correia said.
The report found that the top five CRM vendors accounted for about 50% of CRM software revenue in 2012.
According to the report, SAP was still the largest vendor in terms of revenue in Western and Eastern Europe even though the company was not the worldwide leader in CRM for 2012.
North America and Western Europe accounted for over 80% of total software revenue and remained as the largest regions for CRM, when compared to all other regions, which also saw growth.
Gartner said that overall spending in the IT market in Western Europe has been muted because of economic reasons.
The research firm added that the CRM market has increased due to a wave of acquisitions made by IBM, Microsoft, Oracle and other companies in the area of marketing software.
"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," Correia noted.
