Line56.com — Gartner: SAP Rules CRM

Demir Barlas and Tamina Vahidy — 15 November 2006

According to research from IDC, Oracle is the leading customer relationship management (CRM) vendor. However, according to a differing estimate put out by Gartner Research, Oracle arch-rival SAP is soon expected to take the lead in this space: “Oracle bought Siebel to become the market leader in 2005, but by year-end 2006, SAP will be the larger.”

In Gartner’s estimation, then, Oracle had the CRM lead but is poised to lose it by the end of this year. Sharon Mertz of Gartner explained that, “SAP appears to be ready for single-figure revenue growth of its CRM products in 2006, at best. Oracle is prepared for a slight decline.”

Line56 briefly mentions the IDC report in this article.

The significant aspect of the Gartner report is not so much who is winning as the fact that they can do so with “single-figure revenue growth”.

What is it about CRM (as presently defined) that makes organizations so uninterested in it? Could it be because it’s really about customer data management and does nothing concrete to help manage the customer relationship? Could it be that too many CRM products are large, inflexible and expensive? Or could it be that CRM on its own has lost its attractiveness to users and is gradually turning into a set of optional features in some grand ERP/database hybrid?

Salesforce.com, which sells CRM as a service, doesn’t seem to be in these doldrums. Its third-quarter results, published on 15 November, point to an annual sales growth rate of nearly 60%. I like what Salesforce.com is doing and have already mentioned them a couple of times this year — here and here.