CRM Software

The customer relationship management (CRM) software spending is likely to see the largest increase of all the application software markets in 2011, according to Gartner, an independent research firm.

About 31 percent of respondents participated in Gartner (News - Alert) survey expect an increase in application software spending in 2011, the report called “User Survey Analysis: Application Software Spending, 2010-2011” said.

Comparing their 2011 fiscal budgets with 2010, 42 percent said that they expect to increase spending on CRM in 2011, compared to 39 percent on office suites and 36 percent on enterprise resource planning (ERP), which ranked second and third, respectively.

The primary research survey covered more than 1,500 IT leaders of organizations in 40 countries, which concluded in July 2010. The goal of the survey was to assess software spending allocations for IT budgets in 2010 and predictions for 2011.

“We’re expecting the CRM market to recover gradually as buyer confidence returns and as businesses begin refocusing on growing revenue as opposed to just reducing costs,” said Hai Hong Swinehart, research analyst at Gartner, in a statement.

“Areas of investment are expected to include the online channel; software as a service (SaaS (News - Alert)) -based deployments; and technologies enabling customer loyalty management, and more-targeted levels of customer service,” Swinehart added.

The CRM buyers will continue to focus on investments that promote customer retention and enhance the customer experience. Buyers are interested in technologies that encourage development of customer communities and social networks.

The Gartner report says SaaS adoption continues to be a key driver. SaaS within the CRM industry is expected to exceed $4 billion in total software revenue in 2014, representing more than 32 percent of the overall CRM market.

Application software spending is likely to increase 31 percent in 2011, with an increase of 9 percent from last year. The growth will be fuelled by demand in emerging markets since they are planning for higher budget growth.

Asia/Pacific is likely to have the largest increase, at 37 percent in 2011, up from 14 percent growth last year, followed by Latin America and EMEA showing an increase of 35 and 27 percent in 2011, respectively.