Gartner Says Spending on Social Software to Support Sales, Marketing and Customer Service Processes Will Exceed $1 Billion Worldwide By 2013

Analysts to Discuss the Future Role of CRM at Gartner Customer Relationship Management Summit 2011, March 14-15, in London and Gartner Customer 360 Summit 2011, March 30-April 1, Los Angeles

STAMFORD, Conn. - The customer relations management (CRM) market will enter a three year shake up in 2011, as a number of key trends take hold, according to Gartner, Inc. Sales, marketing and customer service technologies, projects and implementations will all see rapid changes over the next few years.

“Over the next three years, social CRM will continue its exponential rise, software as a service (SaaS) will become routine, salesforce.com will reshuffle the market order, and consultants and system integrators will sell their own CRM software,” said Ed Thompson, vice president and distinguished analyst at Gartner.

In order to offer sales, marketing, service and other business line managers, as well as C-level executives’ guidance with their CRM investments, Gartner has detailed its predictions for CRM in 2011 and beyond.

By 2013, spending on social software to support sales, marketing and customer service processes will exceed $1 billion worldwide.
The $1 billion prediction for spending on social CRM compares with Gartner’s forecast of more than $12 billion for overall spending on CRM software in 2012, means that social CRM will encompass approximately 8 percent of all CRM spending in 2012, up from approximate 4 percent in 2010.

Gartner recommends that buyers of social CRM should take a three-step approach to enable them to develop a social CRM strategy over the next 12 months:

1. Determine if there are any social CRM projects already under way; look in the marketing or customer service departments first.
2. Calculate the likelihood that you will be forced to start something in 2011 — your industry and culture are the best indicators.
3. Find case studies specific to your industry that can provide examples of what is possible, and share them with other decision makers in your organization.

By 2015, one-third of spending on new CRM software will be SaaS.
In 2009, 24 percent of the CRM software market was delivered by SaaS, and this rose to more than 26 percent in 2010, up from virtually zero in 1999. By 2015, Gartner forecasts that 32 percent of the CRM software market will be delivered by SaaS.

Gartner said that buyers of CRM applications should resist the temptation to bypass the IT organization in the short term. Instead, involve IT in purchase decisions early on to avoid the most-frequently cited downstream issue of data integration, and to address potential concerns about inadequate security, scalability and privacy. IT organizations should focus on integration skills. The other limitations of SaaS remain, but are eroding over time, whereas integration skills remain problematic.

By 2015, all Tier 1 CRM ESPs will invest in their own bolt-on CRM application software.
In 2010, all Tier 1 CRM external service providers (ESPs) custom-built application functionality on projects; developed configurations or industry templates for major independent software vendors (ISVs); packaged CRM applications, such as SAP and Oracle’s Siebel; and productized work done on projects for use on later bids. However, less than half of the Tier 1 ESPs developed additive stand-alone CRM applications that coexist with ISV packaged applications. The majority of Tier 1 CRM ESPs are now investing in client-agnostic R&D that is not project-funded to build their own bolt-on or best-of-breed CRM application software to run on platforms such as Force.com and Microsoft’s xRM.

Gartner recommends that consultants and system integrators should carefully select areas of investment, start with their industry and process strengths, and avoid overinvesting in the short term. Buyers should watch for further declines in independent advice on the selection process from ESPs and take appropriate caution when evaluating ESP applications. Above all, they should avoid letting existing brand and reputation cloud their perceptions of the applications.

Additional information is available in the Gartner report “Predicts 2011: CRM Enters a Three-Year Shake-Up ”. The report is available on Gartner’s website athttp://www.gartner.com/resId=1475017.

About Gartner Customer Relationship Management Summit
CRM is entering a new era where the focus is much more on the relationship and less on its management. Driven by social media, a more open, honest and balanced approach is emerging, where organizations listen to and work with their customers to provide mutually beneficial and rewarding relationships. At the Summit, Gartner analysts will provide guidance on how to apply intelligence to customer interactions and become socially aligned and digitally enabled. They will also explore best practices and technology to effectively help organizations use analytics, and achieve lasting improvements in data quality.

The Gartner Customer Relationship Management Summit 2011 will take place March 14-15 at the Lancaster London hotel in London. For further information about the Summit, please visit www.europe.gartner.com/crm. Event analyst blogs, and tweets related to the event can be found at http://www.gartner.com/technology/summits/emea/crm/media.jsp. Members of the media can register for the Summit by contacting Laurence Goasduff, Gartner PR on + 44 (0) 1784 267 7195 or at laurence.goasduff@gartner.com.

Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_incusing #GartnerCRM.

The Gartner Customer 360 Summit 2011 will take place March 30-April 1 in Los Angeles. For further information about the Summit, please visit www.gartner.com/us/crm. Event analyst blogs, and tweets related to the event can be found at http://www.gartner.com/technology/summits/na/customer-360/media.jsp. Members of the media can register for the Customer 360 Summit in Los Angeles by contacting Christy Pettey at christy.pettey@gartner.com.

About Gartner:
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to 60,000 clients in 11,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,400 associates, including 1,200 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.