Gartner: It

Customer relationship management vendors are struggling to capture new business, and enterprises in the market for CRM software stand to benefit from their tribulations, according to a report released this week by Gartner Inc.

“The global economic downturn has intensified its grip on the vendors within the CRM software market. The real winners are the buyers of CRM software,” says Thomas Topolinski, Gartner vice-president, in the report.

Cash-conserving enterprises are focused on proven revenue-generating IT projects and therefore slower to commit to CRM software. This hesitancy – and its negative effect on vendors’ revenue – gives the enterprise buyer a leg up when it comes to licence negotiation. “Opportunity for the enterprise comes in the form of strong negotiating position in terms and conditions, including price,” Topolinski says.

Demand for CRM software will continue, but growth will be slow, Gartner predicts. The research company’s estimates for 2001 new licence revenue show an 8 per cent drop over 2000 new licence revenue – which was up 89 per cent over 1999 figures. Growth in 2002 is forecast to be flat at US$3.7 billion. In 2003, Gartner expects new licence revenue to climb 10 per cent to US$4 billion.

For enterprises that want to take advantage of this favourable buying climate, Gartner offers these recommendations: