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by Rob Bois, Contributing Editor Posted on Monday, November 28, 2005 1:00:00 PM   | Abstract: | On the heels of Oracle's agreeement to acquire Siebel, customers and industry watchers alike have scrambled to make sense of the new world order in CRM. |
On the heels of Oracle Corp.'s agreement to acquire Siebel for approximately $3.6 billion (after accounting for cash reserves), customers and industry watchers alike have scrambled to make sense of the new world order in customer relationship management (CRM). According to AMR Research's market data, the top CRM vendors represent more than $4.5 billion, or nearly 40%, of that market. Looking just at the vendors that offer full CRM suites (sales, marketing and service modules), the top five command upwards of 65% of the market. Software buyers, particularly in manufacturing industries, have fewer vendor options than ever before -- and if you're an existing SAP or Oracle customer, you may have already decided to rationalize around a single vendor. However, as the top enterprise application vendors battle back and forth for CRM supremacy, the new breed of software-as-a-service (SaaS) vendors keeps moving up the charts. So, where's it heading? The clear trend toward services-oriented architecture (SOA) is giving buyers more deployment options than ever before. While fewer specialty CRM vendors remain in the market, vendors selling SaaS customer management represent the next wave of innovation and growth. The largest provider in this category, salesforce.com, anticipates approximately $300 million in revenue, most of which derives from subscription CRM. The other large public vendor in this arena, RightNow Technologies, posted $81 million in revenue in 2004, and is projected to continue to see double-digit growth rates. Considering that most of this revenue comes from subscriptions, not services or maintenance, it is most appropriate to compare SaaS revenue to license revenue from the on-premises vendors. [Click to continue] |