Worldwide spending on customer relationship management (CRM) software grew 15.6% to reach US$48.2 billion in 2018, according to a new research report.

According to Gartner, worldwide enterprise application software revenue remains both the largest and the fastest growing enterprise application software category, totalling more than $193.6 billion in 2018, a 12.5% increase from 2017 revenue of $172.1 billion – with CRM making up almost a quarter of that revenue.

Approximately 72.9% of CRM spending was on software as a service (SaaS) in 2018, which Gartner says is expected to grow to 75% of total CRM software spending in 2019, “with agility and flexibility being big drivers, along with the requirement for remote and mobile users”.

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“Cloud growth has dropped slightly in 2018 but remains strong at 20% and significantly above the overall growth rate of 15.6% for CRM,” said Julian Poulter, senior director analyst at Gartner.



“As an early mover to the cloud, CRM software is probably seeing a gradual reduction in cloud growth rates due to high adoption.”

The Gartner report shows that the top five CRM software vendors accounted for more than 40% of the total market in 2018, while the top five vendors had very little change in ranking compared with 2017, although Microsoft climbed into fifth position, narrowly displacing Genesys.

All sub-segments of the CRM market grew by more than 13.7%, with marketing emerging as the fastest growing segment, increasing by 18.8% and representing more than 25% of the entire CRM market.

And customer service and support retains its No. 1 position, contributing 35.7% of CRM market revenue.

“To exploit the significant market opportunity, product managers in CRM application providers should double down on cloud deployments and consider adding functionality in the fast growing marketing segment,” Poulter said.

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