CRM software revenue declines

The customer relationship management (CRM) software industry suffered through a second year of declining new license revenue in 2002, according to the research firm Gartner.

World-wide CRM new license revenue totalled $2.8 billion in 2002, a 24.7% decline from 2001 revenue of $3.7 billion. In 2001, the market declined 6.4%.

‘The slow economy, combined with buyer behavioural changes and priorities, have had a huge impact on sales of new license revenue for the CRM software vendors,’ said Tom Topolinski, vice president for Gartner’s world-wide software applications research group.

‘Smaller deals, tactical projects, longer sales cycles and heavy competition have caused CRM vendors to struggle.’

Siebel continued to be the No. 1 vendor based on world-wide new license CRM software revenue with a 24.9% market share, but its market share slipped more than 3 percentage points in 2002. SAP and PeopleSoft were the only top-tier vendors to experience a gain in market share in 2002.

All regions of the world experienced a decline in new license CRM software revenue in 2002. North America, the largest region for new license CRM software revenue, experienced a decline of 27.6%, while Western Europe dropped 22.4%. The Asia/Pacific region suffered a 15.2% decline.

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