The latest study by Framingham, Mass.-based IDC is calling for huge worldwide growth in the analytic application software market, with CRM analytics leading the way.
The report, called the Worldwide Total Analytic Applications Software Forecast and Analysis, 2003-2007 predicts the market to reach US$4.8 billion in 2007. Included in the market: CRM analytics, financial business performance management and operations.
IDC said that it expects CRM analytics to experience the most significant growth at 12.9 per cent annually, followed by financial analytics/business performance management at 10.3 per cent and operations analytics by 7.4 per cent annually.
According to IDC, the market is poised to grow significantly because CEOs are able to justify their ROI, measurability and accountability of these project installations.
While the study was global in reach, IDC said there were no specific numbers available to determine financial growth rates for individual countries. The data for the report was gathered via large-scale surveys, market trends and discussions between IDC and privately held software companies.
The fact that CRM analytics is expected to flourish over the next five years should come as no surprise, as a large number of companies have spent vast resources to build data warehouses, explained Robert Blumstein, research director for IDC's CRM analytics and marketing applications in Framingham, Mass. As organizations move beyond traditional CRM-type of applications and into analytics, they are beginning to understand that in order to efficiently drill into corporate data, new approaches are in order.
"Now that they've made those investments they have realized that they need analytic software to get the most out of CRM. Otherwise, all they have is a whole lot of data with traditional guesswork applied to it," he said.
In many cases, this is leading to a melding of CRM analytics and business intelligence (BI) vendors applications. As a result, traditional BI and corporate performance management vendors (CPM) have started to partner or buy their market presence. Ottawa-based Cognos Inc. bought privately held CPM outfit Adaytum Inc. earlier this year, while CPM vendor Comshare Inc. has partnered with BI platform vendor Microsoft Corp.
As Blumstein noted, BI vendors recognized an opportunity when they realized their customers were selling their software, to in turn "build their own analytics out of their tools." He characterized the link between CRM analytics and BI a "natural extension."