What are the biggest trends in the CRM market heading into the 2020s?

January 21 2019

We’re roughly 20 years into the CRM trend and it's worth asking where we go from here. Grandview Research recently estimated that the market would be worth $81.9 billion by 2025 and Gartner and others publish annual reports indicating the market's vibrancy.

But you can hide a lot within a dollar amount, not for any sinister reasons but simply because we don't know the future and product values can decline over time. For instance, there is a long-term commoditization trend ongoing in CRM. Few people now recall that at its inception, CRM was just another on-premise client-server solution set running on networks of PCs or Unix devices. The price was about $2,000 per seat, plus implementation and other services—just for SFA.

Cloud computing ushered in the era of SaaS, or vice versa, which caused significant commoditization not only in CRM but more slowly in back office systems too. Commoditization means lower costs for the customer which enlarges the market but at the same time also means shrinking margins for vendors who constantly need to rethink how to efficiently and effectively get their products into the hands of customers.

CRM is far from alone in this, commoditization and price erosion are the economic way of the world. But CRM has also been very good at reinventing itself so as to offer new products and services. CRM has grown to encompass nearly all aspects of the vendor-customer relationship. However, even that trend will have its limits and the further out into the future we care to look the more these macro trends will figure into how that future rolls out.

Therefore, it's vital to have a framework or a filter through which we see the world if we're going to do justice to our predictions of what will make up that $81.9 billion or however much it turns out to be. Here are mine.

  1. There will be consolidation in the number of primary CRM vendors as developers align with platforms. The platform is rapidly becoming the basis for CRM because no single vendor can supply solutions in all of the proliferating CRM niches. Platforms make it far easier for customers to select best of breed solutions that integrate with core CRM functionality from one of the majors. The major CRM vendors will likely include Salesforce, Oracle, Microsoft, and SAP plus one or two others that can build credible platforms.
  2. The overall number of CRM vendors and solutions will likely increase. Emerging and mid-range CRM vendors are already selecting their preferred CRM partner based on platform and very importantly, based on ecosystem. A primary or major CRM solution will be known as much for its technology platform as for its ecosystem and the services it provides to help smaller partners to penetrate their markets.
About Denis Pombriant

Denis Pombriant has been a well-known analyst and thought leader in the CRM space for 20 years. He is the managing principal of Beagle Research Group, LLC, a CRM consultancy. Pombriant writes and publishes widely throughout the CRM industry and he is the author of three books including, "Solve for the Customer," and "You Can't Buy Customer Loyalty, But You Can Earn It." Most recently Pombriant published, "The Age of Sustainability," about the economic and technical solutions to global warming. 

Pombriant continues a vigorous practice dedicated to analysis, writing, and consulting on all matters related to CRM. The Beagle Research Blog has won consistently high honors for its content. It was ranked number one for 2018. He lives in the Boston area with his beautiful wife, two demanding cats and one French water dog that always seems to be wet.

More about Denis Pombriant