June 12, 2001, 12:00 AM

IDC forecasts $148 billion in CRM revenue by 2005

The demand for customer relationship management products and services will grow 25% per year for the next four years, double the growth rate for other information technology markets, IDC says.

The worldwide customer relationship management services market will increase at a compound annual rate of 25% from $61 billion in 2001 to $148 billion in 2005, says researcher IDC in a new survey, “Worldwide CRM Services Market Forecast and Analysis, 2000-2005.” This growth far exceeds that of the overall IT services market, which shows a 2000-2005 CAGR of 12%, IDC says.

"CRM`s solid performance despite a weakening economy can be attributed to the business benefits and cost savings it generates for customers," said Jocelyn Young, manager of IDC`s CRM Services research program. "As companies need to justify their e-business investment, they will look to CRM solutions as a key means to increase e-business return on investment."

IDC says the current economic environment is presenting a timely opportunity for CRM vendors to communicate to customers the value of CRM solutions. "Helping clients rethink their CRM strategies during the next 12-18 months will provide significant opportunities for service firms to position their offering as a means for long-term business success," Young said.

According to IDC, CRM outsourcing/operations management occupies the largest portion of the CRM services market, accounting for $32 billion in revenue in 2000. It is expected to surpass $82 billion in 2005. The market for CRM training performed solidly in 2000, exceeding $2.9 billion, and is expected to eclipse $11 billion by 2005.

IDC says key areas for vendors of CRM services should be: addressing clients` needs for shorter project phases and earlier visible results, helping clients identify and think through the business process and organizational changes accompanying any CRM initiative, strengthening customer data integration expertise and methodologies, and helping clients quantify ROI and develop ongoing measurement processes.


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