BriefsGartner Dataquest forecasts who will survive the CRM shakeout
SearchCRM published a quarterly forecast by Dataquest, a division of Gartner. The forecast predicts that the tragic events of Sept. 11 and the current recession will intensify the ongoing shakeout in the CRM and related markets, and we may see the slowdown for the coming 18 months.
While Dataquest predicts that demand for CRM software will continue, driven largely by solid return-on-investment propositions, the firm said it believes global spending on applications will continue to suffer through 2002 and that sales growth will remain below peak levels at least through 2003.
Tom Topolinski, lead analyst for Dataquest's Worldwide Applications Software group, believes some CRM makers will be able to do well, especially the larger vendors that span across different software sectors, such Peoplesoft and SAP. The pure-plays in CRM are likely not to do well.
Dataquest reports that during the first half of 2001, the CRM sector saw 12% growth over the first half of 2000. However, the third quarter saw a nosedive to negative growth of 31% compared to the year-before quarter. The firm predicts that 2001 will finish with negative 8% growth for the year, compared to 89% growth for 2000.
Based on these conclusions, Dataquest believes CRM vendors must focus tightly on retaining existing customers while still seeking out new business. This will put an even greater emphasis on delivering short-term return on investment, according to the report
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