CRM Market to Suffer Next Year, Says Gartner

Spending priorities shifting

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

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

Worldwide, CRM revenue 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 particularly staggering. Gartner Dataquest expects CRM to grow again in 2003 by 10 percent to $4 billion.

With the slowing demand, Gartner Dataquest believes that weaker vendors in CRM will wither away or be acquired by a larger player. It believes this will further contribute to slow sales as enterprises delay decisions until they have confidence a vendor will support a product in the long term.

About the Author

Chris McConnell is Product and Technology Editor for Enterprise Systems.