CRM Software Market Share & Trends For The European Union

The European Union CRM Software Market

 

The Western European CRM software market exceeded €2 billion in 2006 for the first time, continued a growth rate of approximately 8.5 percent through 2008 and has since remained sluggish. The top five CRM software solutions in Europe are SAP, Oracle, Aspect Software, SAS Institute and Genesys Labs. While still not dominating in absolute market share figures, the on-demand CRM vendors continue to demonstrate the highest growth figures. On-demand systems currently make up about 3 to 4 percent of Europe's CRM market, however, continue to grow at over 40 percent per year.

 

Analyst firm Gartner indicates that SAP and Oracle (including its acquired Siebel solution) jointly hold more than 50 percent of the total CRM software market in Europe and Microsoft is experiencing the fastest CRM growth in Europe.

 

According to Gartner Senior Research Analyst Chris Pang, “The picture in Europe is very fragmented. Our research shows that growth in spend on CRM software correlates strongly with economic growth measures such as gross domestic product (GDP). GDP growth in countries such as Italy and Germany remains lower than the rest of the world, while market growth in countries such as the UK, Sweden, Norway and Denmark has been more consistent with that in North America. This means we are seeing CRM growth rates ranging from a slight negative to more than 27 percent depending on the individual country.” 

 

Gartner also discovered high levels of CRM product procurement, material price reductions and exchange rate fluctuations as significant factor affecting market growth. Gartner's Pang said “Acquisitions of major players such as Peoplesoft early in 2005 and Siebel in 2006 by Oracle have played a key role in pushing prices down. This encouraged more buyer activity with users ‘stocking up’ on CRM software. The net result is that we are seeing a return to more realistic and sustainable buying levels.”

 

Most analyst firms forecast continued high levels of CRM software procurement through 2008. Gartner also believes that one in three CRM software suppliers will be involved in a merger or acquisition (M&A) each year. Despite this analyst Pang said this is not a shrinking market. “This ferment of M&A activity will spark a burst of innovation in CRM application research and development from 2006 to 2010. Particularly in Europe, the market is still wide open for smaller, best of breed vendors.  Additionally, both Salesforce.com and Microsoft have the resources and desire to gain scale and narrow the gap with SAP and Oracle going forward.”