BOSTON – The steady-as-she-goes growth of the worldwide customer-relationship management market is masking a sea change in how the technology is being paid for and deployed, according to a new report. “Purchasing of new CRM application software will rapidly transition to an application service provider (ASP), subscription-oriented model,” says Hugh Bishop, senior vice president at the Aberdeen Group in Boston, a leading market analysis and positioning services firm. Bishop says CRM spending will grow at an annual rate of 6.7% through 2006, reaching $17.7 billion, and that spending by small and medium-sized businesses will exceed that of larger firms, because of the ability to tailor the solution. “The financial benefits and risk mitigation associated with this new model are driving user organizations to abandon the perpetual license model. CRM suppliers also see an advantage to this model, since it provides them with predictable, renewable revenues. As a result, license revenues will decline at an average annual rate of 4.8%, while subscription revenues will skyrocket to $2.8 billion,” Bishop says in the Aberdeen report. The U.S. will continue to dominate the CRM market, but international adoption, particularly in the Asia/Pacific Rim, will modify that. In 2002, the U.S. accounted for $7.14 billion (or 52.2%) of the overall market. By 2006 that share is expected to be 51.9%, Aberdeen says.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

 

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2022 ALM Global, LLC. All Rights Reserved.