ERP Software Market Share & Trends For North America
The North American and Global ERP Software Market
Global enterprise resource planning (ERP) software revenue is forecasted to exceed $8.9 billion in 2008, a 14.2 percent increase from 2007 revenue of $7.8 billion, according to Gartner, Inc. The market is poised for continued growth through 2012 when revenue is projected to reach $13.3 billion.
According to analyst firm Gartner, North America is the largest market for CRM total software revenue, as it accounted for $4.3 billion of revenue in 2007, and it will total $7.6 billion in 2012. Europe is forecasted to continue steady, positive growth rising from $2.6 billion in 2007 to $3.9 billion in 2012. The strongest growth in CRM spending is expected to come from the Asia Pacific region where revenue is projected to grow from $410 million in 2007 to $840 million in 2012. Emerging markets such as Latin America, Eastern Europe and the Middle East and Africa will continue to see upward trends in CRM spending, particularly in specific industries.
Growth is also being driven by SAAS (software-as-a-service) subscription-based sales, which took an estimated 14 percent of the market in 2007 and represented more than $1 billion in sales, according to Gartner.
Not surprisingly, open-source CRM is not yet making inroads. Market share for open source CRM offerings will remain below 1 percent through 2008, Gartner said.
The United States leads the world in Customer Relationship Management spending, deployment, utilization and payback. While estimates of global market representation vary in the range of 50 percent to as high as 62 percent, the most recent figures suggest that the American market consumes approximately 58 percent of the total global CRM market.
However, CRM adoption varies greatly by market size. Enterprise CRM software solutions have saturated the Fortune 1000 market while middle market and small business application providers have yet to fulfill the majority of the small and midsize business (SMB) market. Software as a Service (SaaS) or on-demand ERP systems have made significant inroads in satisfying the SMB market and continue to drive upstream in penetrating enterprise level organizations.
As the North American CRM software market matures and begins to approach saturation, CRM vendors are refocusing their attention and business development efforts toward the rest of the world. While the United States will continue to lead global ERP software market adoption, analysts expect other regions such as Asia and the European Union to achieve higher percentage growth rates overall.
As the North American Fortune 1000 CRM software market has become saturated and the small business market has seen aggressive CRM adoption over the past decade, software vendors accustomed to serving either large enterprises or small businesses are converging in the coveted middle market.
The middle market has remained elusive in part because these organizations require functionally rich applications systems similar to enterprise organizations, however, have budget constraints which prohibit the acquisition and ongoing operational costs associated large scale business systems. Middle market companies normally require deep software feature sets, flexible configuration, straight-forward system integration and easy to use system administration tools generally not available from the small business CRM vendors.
Software as a Service CRM systems may deliver the functionally rich applications at the reduced investment that midmarket companies have long been waiting for. SaaS CRM applications have enjoyed a sky rocketing growth rate among small business customers and are now clearly showing major market penetration in both the middle market and enterprise market.
Excellent SaaS Reference Sources