In 2015 More Than 50% Of CRM Will Be Deployed As SaaS

The tipping point of on-premise versus SaaS-based CRM deployments is arriving next year, and Gartner anticipates “that SaaS deployments of CRM will reach a maximum 80% to 85% by 2025”.

These and other key insights from The Gartner CRM Guide, 2014 published March 10, 2014. It’s a useful reference and comprehensive taxonomy of how Gartner assigns CRM vendors to each segment and sub-segment of the CRM market today.

Gartner projects “the CRM software market is projected to grow at a 14.8% compound annual growth rate (CAGR) through 2017, with cloud revenue growing at more than 22.6% CAGR”. The following graphic provides a historical comparison of market growth rates by CRM application category: Gartner is including integrated marketing management (IMM) in the Marketing category.

Customers are changing the landscape of entire industries faster than many companies can keep up. The larger the enterprise, the harder it is to change how they deal with prospects, customers, service and support. Factor in how mobile applications are built for ease of use and speed combined with the always-on nature of social networks, and it’s understandable why customer expectations’ of responsiveness are accelerating.

Legacy CRM systems were designed when customer expectations of responsiveness weren’t accelerating as fast as they are now. Sales teams today have to get up and running on a new CRM application literally in hours or days to be effective. There is no time for two week classes (and still make their quota) like many legacy CRM systems offered. It’s all about being quick enough to define new sales strategies, launch and measure them, making mid-strategy corrections if needed. Many CRM systems today are designed with context-first, often mobile deployment in mind, relying on streamlined, intuitive and user-customizable interfaces to help sales teams be more effective quickly.

These factors and the key take-aways listed below are what’s driving the inflection point in CRM today:

Using SaaS-based CRM to complement existing legacy CRM system investments (18%) followed by replacing most/all legacy CRM systems with SaaS (11%) are how U.S.-based enterprises are integrating SaaS CRM into their IT infrastructures. These findings are from a recent Forrester Consulting Thought Leadership Paper Commissioned By Adallom titled SaaS Adoption Requires A New Approach To Information Security Complacency And Confusion Pose Threats In An Increasingly Popular Delivery And Consumption Model. You can download a free copy of the study here. While underwritten by Adallom, this study provides a good overview of Forrester’s SaaS adoption research.

IDC’s Mobile Enterprise Applications (MEA) Survey completed in February, 2014 interviewed 407 U.S.-basedorganizations, with 52% respondents in IT/IS executive management roles, and 24% line-of-business executivemanagement. 78% direct or manage mobile technology decisions (with 22% influencing decisions) and 67% of enterprises interviewed reported that they have deployed two or more mobile apps. Michael Fauscette, GroupVice President at IDC, recently wrote a blog post titled What Are The Biggest Benefits Of Mobile EnterpriseApplications? succinctly illustrating why the benefits of mobility are accelerating in enterprises today. Providing greater context and real-time access to information while enabling sales, support and service repsto take meaningful, relevant action is one of the catalyst driving SaaS CRM’s growth. The following analysis from Michael Fauscette‘s post underscores how mobile enterprise applications can simplify and streamlinecustomer prospecting, selling, support and ongoing service.

Cloud platforms supporting Application Programmer Interfaces (APIs) and Web Services are making it possible for SaaS-based CRM apps to integrate with legacy CRM, ERP, pricing and SCM systems. These integrations enable greater context of customer, product, pricing and distribution data, further enriching the customer experience and accelerating sales cycles. The IDC Maturity Model illustrates how rapidly cloud-based integration is expected to accelerate in the next three years. The IDC Maturity Model: Cloud — A Guide for Success includes the following figure that illustrates how cloud maturity will change on each dimension

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