CRM applications market expected to grow rapidly, says IDC report

The ERM applications market dominates today but will have slow growth in the next five years, mainly because of maturity of the market

The local enterprise applications market will grow steadily over the next five years, says research company IDC.

The company predicts a compound annual growth rate (CAGR) of 6.9% for the period ending in 2010. The market will have a value of $138.2 million in 2010, compared with $99 million in 2005.

Ullrich Loeffler, market analyst for information management solutions at IDC New Zealand, has looked at enterprise resource management (ERM) applications, customer relationship management (CRM) applications and supply chain management (SCM) applications.

“The CRM applications market is expected to have the fastest growth, with a CAGR of 11.3%,” he says. “One of the reasons for this growth is that businesses are starting to understand what a CRM system can bring [back to them].”

Loeffler’s report predicts that the SMB market will increasingly adopt CRM applications. He also concludes that the integration of business intelligence into CRM applications will become more common, and that organisations will access CRM systems via mobile devices to aid efficiency.

In 2005, the ERM applications market accounted for the biggest share of the total enterprise applications market. The ERM had 61.3% of the market, and revenues of $60.7 million. Loeffler says the ERM part of the market will experience the slowest growth of the three sectors in the next five years, mainly because it is a mature market. Expected CAGR for the ERM market is 5.6%.

The strongest growth opportunities will be in business performance management, financial analytics and financial applications, he says.

The wider adoption of service oriented architecture (SOA), as well as software-as-a-service (SaaS), is likely to affect this market, says Loeffler. In addition, increasing compliance with regulations such as Sarbanes-Oxley and Basel II will affect both enterprises and SMBs.

The SCM applications share of the market should experience a CAGR of 6.1%, he says.

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