The Western European CRM applications market will grow less than 5% annually, according to a new study by IDC. "The CRM market is maturing rapidly and IDC does not expect double-digit growth to occur in the coming years. However, you can still find pockets of high growth in Western Europe, such as hosted CRM, customer analytics, customer self-service, and vertical CRM applications. Certain industries, in particular financial services, telecommunications, and public sector, have enormous potential for replacing custom-developed CRM applications with packaged software," said Bo Lykkegaard, program manager, European Enterprise Applications.
Two IDC end-user surveys this year demonstrated that CRM is a top priority for 2005 for many Western European companies. After several years of cost cutting and bottom-line focus, most European companies are currently transitioning to a top-line and growth focus. However, investments are held back by slow economic growth in key Western European markets, such as Germany, Italy, and France. Furthermore, price pressures from new entrants and high-end vendors going downmarket will inhibit growth at the market level.