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At the end of 2017, worldwide customer relationship management (CRM) software revenue overtook that of database management systems (DBMSs), making CRM the largest of all software markets, according to Gartner.
Worldwide CRM software revenue amounted to $39,5-billion in 2017 overtaking DBMS revenue, which reached $36,8-billion in the same year. “In 2018, CRM software revenue will continue to take the lead of all software markets and be the fastest growing software market with a growth rate of 16%,” says Julian Poulter, research director at Gartner.

Poulter addss that the strong growth rate of CRM software revenue is driven in particular by the segments of lead management, voice of the customer and field service management, each of which is achieving more than 20% growth.

Gartner has witnessed the rise of marketing technology and a recent resurgence in sales technology in the CRM market. This growing market is attracting many new entrants. However, the major vendors offering CRM suites covering sales, commerce and service are showing stronger than average growth and are successful at cross-selling additional modules to existing customers.

“Organisations are keen to avoid silos of information and to obtain a 360 degree view of the customer,” says Poulter.”The 360-degree view allows better application of artificial intelligence to make the users of the CRM system more effective.”

CRM systems typically contain vast amounts of (sensitive) personal data and are kept for a considerable amount of time, making them a more likely source of noncompliance with the European General Data Protection Regulation (GDPR) than other applications.

The cost of GDPR compliance is expected to increase the existing budget for information security, CRM and customer experience (CX) in the next three years. Areas for technology investment include marketing technology, data loss prevention, security information and event management, and security consulting, especially in Western Europe.

“It is critical that organisations are compliant with GDPR as soon as possible, or at the very latest 25th May, because when customers don’t trust an organisation’s customer data protection, they put their own safeguards in place, like providing false data or closing accounts,” says Bart Willemsen, research director at Gartner. This reduces an organisation’s chances of reaching the right customers with the right offers at the right time.”

Willemsen adds: “Poor CRM will lead to a privacy violation and a GDPR sanction. Application leaders need to enhance control over personal data usage throughout the data life cycle and safeguard processed personal data so that it is not used beyond the context of predefined and documented use cases.”