Customer relationship management (CRM) applications enjoyed a healthy growth in Western Europe last year of 6,3%, beating a previous forecast by almost 1% and reaching a value of €2,2-billion. IDC expects this positive trend to continue, and has increased its five-year forecast. 

"Early CRM adopters, especially in the financial services and telecommunications sectors, are investing in CRM again, while the low-end segment is seeing a significant impact of software-as-a-service," says Bo Lykkegaard, program manager, European Enterprise Applications at IDC>
For the first time in Europe, IDC forecasts the CRM application market by deployment model. Revenue from on-demand CRM applications – CRM applications built specifically for delivery via the Internet – grew almost 40% during 2006 and is expected to maintain this momentum throughout the forecast period.
"IDC expects on-demand CRM applications to make up almost half of the net market growth of the entire CRM market in Europe during the five-year forecast. IDC believes that the net effect of on-demand is market expansion as the ease-of-deployment of on-demand attracts first-time buyers of packaged CRM software," says Lykkegaard.
"Furthermore, large CRM spenders in telecommunications and financial services are investing again, spurred by general economic recovery in Western Europe. Multichannel CRM and service agent empowerment are current investment priorities."