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Customer Interaction Management Feature Article

December 14, 2006

CRM Market To Hit $1.3 Billion in 2007, Telecom Analysts Say

David Sims, TMCnet Contributing Editor

A new study from telecom market research and consulting firm Dittberner Associates predicts "resurgent growth" in the market for CRM and related customer assurance software.

The report, titled "Telecom Customer Assurance & Analytics," sizes the telecom industry market for such software at $997 million in 2005 and forecasts healthy growth to $1.3 billion in 2010.

While the CRM market has certainly declined since its dotcom heyday, the Dittberner report's authors say the complexity of pricing, promoting, and personalizing next generation telecom services has acted as "the main driver for telcos to pay greater attention" to CRM-related issues.
"If we've learned anything from the telecom industry's last recession, it's that investing in the latest network innovations is no guarantee of business success," says Dan Baker, director of Dittberner's OSS/BSS KnowledgeBase. "That's why, in today's competitive world, investments in customer-keeping and customer-monetizing technology are as vital as a telco's investments in network infrastructure."

While the report sees CRM on the climb again, it cautions that the character of the CRM market has fundamentally changed. As most telecoms already own the desktop tools they need to efficiently capture and integrate customer behavioral and demographic data, Dittberner sees future growth in the analysis of this data.

In effect, telecoms have merely "scratched the surface of knowledge" that can be used from their daily interaction with customers, operations, services, networks, and salespeople.
Thus the report points to the opportunity for a combination of analytics software, industry consulting and analytics experts who "know how to build customized analytic apps."

The report is available to subscribers of Dittberner’s OSS/BSS KnowledgeBase, a market research service designed to track the growing number of emerging OSS/BSS vendors and solutions. See the full table of contents at <> .

According to a 2004 Forrester Research (News - Alert) report, the CRM market overall was expected to experience a modest compound annual growth rate of 11.5 percent from 2002 to 2007. "During this period," Forrester wrote then, "factors that will reshape the market include cross-channel integration, vendor verticalization, Web services, and a shift in application pricing models."

Forrester also predicted that firms will shift their focus from the technical elements of channel integration to process redesign efforts focused on improving customer experience.

Some key findings from the report "CRM's Future: Humble Growth Through 2007" by Forrester Principal Analyst Bob Chatham were that growth at consulting firms will drive the CRM services segment to $41.9 billion in 2007, expansion in the CRM apps category will taper to 12.5 percent by 2007, and that "marketing automation apps will represent the fastest-growing CRM segment.

While growth between 2002 and 2004 will hover around 14.5 percent, the report said, the segment "will expand at a 17 percent rate thereafter -- reaching $928 million in 2007."

David Sims is contributing editor for TMCnet. For more articles please visit David Sims’ columnist page.

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