Worldwide CRM Total Software Revenue Increased 14 Percent in 2005

Gartner: Driven by significant gains in license and maintenance revenue, worldwide customer relationship management (CRM) total software revenue totaled $5.7 billion in 2005, a 13.7 percent increase from 2004. As business confidence returned in a strong commercial economy, buyers focused on solutions that drive revenue and expand business opportunities. Robust gains resulted from strong vendor performance across the market, continued rapid adoption of on-demand solutions, increasing penetration of emerging markets, and buyer recognition of CRM applications as key drivers of customer acquisition and retention. SAP was the No. 1 CRM vendor based on total software revenue, with a 25.9 percent market share in 2005 (see Table 1). Increased midmarket opportunity drove growth across the CRM market for both the large suite vendors and on-demand providers, such as Salesforce.com. Siebel's strong fourth quarter results drove growth, but at the expense of Oracle and PeopleSoft CRM solutions. Industry specialists such as Amdocs also benefited from high demand for vertical market solutions. Gartner has traditionally measured market share in terms of new license revenue. However, due to the emergence and increasing popularity of open-source software and buyer consumption models such as hosted and subscription offerings, Gartner has moved to measure market share in terms of total software revenue. This includes revenue generated from new license, updates, subscriptions and hosting, technical support and maintenance. Professional services and hardware revenue are not included in total software revenue. Table 1 Worldwide: CRM Total Software Revenue Estimates for 2005 (Millions of U.S. Dollars)

Company	2005 Revenue	2005 Market Share (%)	2004 Revenue	2004 Market Share (%)	2004- 2005 Growth (%)
SAP	1,474.7	25.9	1,232.8	24.6	19.6
Siebel	966.1	17.0	908.3	18.1	6.4
Oracle (Including PeopleSoft)	367.5	6.4	416.2	8.3	-11.7
SalesForce.com	280.7	4.9	158.0	3.2	77.7
Amdocs	276.4	4.9	225.9	4.5	22.3
Others	2,332.6	40.9	2,071.7	41.3	12.6
Total	5,698.0	100.0	5,012.8	100.0	13.7

Source: Gartner Dataquest (June 2006) Merger and acquisition activity continued relentlessly in 2005, as large vendors acquired smaller firms and as market leaders acquired each other. Market consolidation in 2005 remained a driver for best-of-breed and suite providers by offering a compelling value proposition and capitalizing on temporary buyer uncertainty. Buyers were solidly focused on new customer acquisition, expanding wallet share, process optimization, and business accountability.

Worldwide CRM Total Software Revenue Publ 20060612