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SaaS remains a key driver of growth in the CRM market

The cloudFor the past four years, the ‘Software as a Service’ or SaaS model (one of the “layers” of the cloud computing model, along with, for instance PaaS or Platform as a Service, IaaS or Infrastructure as a Service, etc.) has been crucial for the growth of the Customer Relationship Management market.

Mainly under pressure of the increasing success of Salesforce.com, nearly all vendors of CRM applications now have ‘on-demand’ or ‘SaaS’ offerings. This week Gartner released new data, showing that SaaS CRM revenue this year accounts for 24% of the CRM market’s total software revenue.

In 2005 it represented only 8% and last year little over 20 percent. And it doesn’t look as if this trend will come to an end any time soon.

According to Gartner ‘the market landscape for on-demand CRM continues to evolve as the availability and usage of SaaS solutions becomes more pervasive’.

SaaS revenue driven by CRM, content, communications, collaboration, web content management and email marketing

The research company also looked at the SaaS market as a whole and found that worldwide SaaS revenue will grow 18 percent this year, reaching total revenue of $7.5 billion. In 2013 worldwide SaaS revenue should represent over $14 billion for the enterprise application markets.

Besides the CRM segment, that will have generated $2.3 billion this year, the content, communications and collaboration (CCC) market (including for instance web content management systems, on demand email marketing platforms etc.) has the largest piece of the SaaS cake with $2.6 billion in revenue.

Also the rapidly growing category of marketing automation software in an increasingly data-driven marketing context where CRM also fits in (and is inevitably connected with) predominantly happens in a SaaS model.

Since Gartner forecasts that the worldwide SaaS revenue will reach $7.5 billion this year, the on-demand CRM and the CCC market combined account for 65 percent of the market.

More in Gartner’s ‘Market Trends: Software as a Service, Worldwide, 2008-2013, Update’ report.

Images purchased under license from Shutterstock

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