Ulrika Hedquist, who writes for Computerworld New Zealand, recently reported that analysts from both Gartner (News - Alert) and IDC agree the CRM systems market is still in good trim, being worth $1.06 billion in Asia-Pacific and Japan last year “after having grown 21 percent year-on-year.”

She says that IDC (News - Alert) is seeing “a continued focus on customer-centric initiatives and this includes using mobility, collaboration, BI, social networks and CRM,” citing Rasika Versleijen-Pradhan, senior services analyst at IDC New Zealand: "This continues to be a key area of investment for many organizations.”

Gartner's own research points to healthy investment in loyalty management, multi-channel, web and interactive customer offerings in Australia and New Zealand, “particularly in the banking, telecoms, financial services, insurance and airlines sectors, as well as government,” says Praveen Sengar, principal research analyst, e-commerce and CRM at Gartner, adding that SaaS (News - Alert) adoption is showing healthy signs in Australia and New Zealand, with Salesforce.com growing by 35-40 percent, according to Hedquist.

Versleijen-Pradhan told Hedquist that adoption levels have somewhat stayed the same, “only that small-sized companies see it as being more relevant and important for their business.” Interestingly, the analyst added that “for the time being” the majority of organizations' preferred choice is on-premise. That’s probably the case, but one can expect to see the numbers continue to shift to hosted options.

Hosted CRM still has security image and performance issues to overcome before it can expect the acceptance on-premise CRM has.

In 2007 TMC (News - Alert) reported that Salesforce's data security woes were an area of concern for those checking out hosted CRM, as Auckland, New Zealand-based industry observer David Watson reported that the New Zealand Police "cancelled a tender for a Web-based CRM system because the preferred vendor could not meet security requirements."

The police had been seeking a CRM system, Watson said, "to be provided either as a hosted service or housed on their own servers, but the tender was cancelled because the proof of concept failed." The potential vendor was not identified by Watson.

NZ Police procurement manager Peter Rendall said in a prepared statement that "this tender was terminated at the proof of concept stage, as the preferred vendor was not able to meet with the police security requirements."

Hosted CRM systems have been gaining in popularity in recent years, as Watson says, "as they have a flat per-monthly charge and are provided on a rented, or SaaS basis."