CRM Market to Suffer Next Year, Says Gartner

As a result of shifting spending patterns, the CustomerRelationship Management (CRM) software market will have a flat 2002, accordingto a new report from Gartner Dataquest.

In the wake of the September 11 terrorist attacks,enterprises have shifted spending priorities from strategic buys to tacticalbuys, the report says. Because of the uncertainty, enterprises are holding offon new initiatives like a CRM solution, to focus on maintaining installed environments.

Worldwide, CRMrevenue is expect to decline by 8 percent this year, and remain flat next year.In 2000, the CRM market grew by 89 percent, so the drop in sales is particularlystaggering. Gartner Dataquest expects CRM to grow again in 2003 by 10 percentto $4 billion.

With theslowing demand, Gartner Dataquest believes that weaker vendors in CRM willwither away or be acquired by a larger player. It believes this will furthercontribute to slow sales as enterprises delay decisions until they haveconfidence a vendor will support a product in the long term. – Chris McConnell