The IDC CRM market share numbers are in for 2019 and for the seventh consecutive year Salesforce leads the pack, this time with 18.4 percent of the market. Other big vendors trailing the leader include, SAP 5.3 percent, Oracle 5.2 percent, Microsoft 3.7 percent, and Adobe 3.6 percent.
The list is impressive, but the numbers are absolutely binky after 25 years of competition. The runners-up have a combined share of 17.8 percent, still less than that of Salesforce.
Most interesting is that the top five vendors, including Salesforce, add up to an unimpressive 36.2 percent. That means the majority of the market is made up of CRM vendors that we may know well, but that don’t hit the radar.
Others in the Field
I’m thinking about companies like Zoho, a global provider of front and back office technology that’s quirky enough to evade most definitions of CRM or ERP, yet provides just-right solutions to small and medium companies at price points that the majors avoid.
I’m also thinking about Siebel which, despite the fact that it was absorbed by Oracle a long time ago, still has a big installed base — and Oracle recently announced that support for the product has been extended to 2030.
Finally, just to mention a third, there’s Creatio (formerly bpm’online), a company that focuses on the processes of CRM and not just the data.
But 36.2 percent is hardly the stuff that makes an oligarchy, or a simple monopoly, and it offers all of us hope. Regardless of what you think of the majors, and full disclosure, they’ve all paid me at some point to provide research and analysis, they aren’t dominant, and the other vendors are still adding considerable value.
Quick segue, it’s entirely possible that IDC’s definition of what makes a CRM company is overly broad and it’s also possible that many large companies built their own CRM or greatly customized a version of Siebel or some other product they bought a long time ago. It’s also possible I’m immune to COVID and just not aware of it. But none of those is probable.
The one insight from this research that I find really interesting is just how diffuse the market is. There are still plenty of niches where other vendors can set up shop and do pretty well. But I also wonder how long this can go on.
Salesforce’s Grand Design
The top five vendors all have buckets of cash, in part because they have portfolio businesses that cater to a variety of other markets like databases, operating systems, and ERP. So they aren’t as dependent on the CRM market as Salesforce. Also, the addition of analytics to the CRM record keeping systems embraced by the majors sets a high bar for the rest, most of whom are clearing it.
If you’re wondering about market consolidation and the emergence of a dominant supplier, then the smart money would obviously be on Salesforce, but the smart money was once on Siebel too. I think Salesforce is going in a different direction. It is axiomatic that Salesforce is the CRM leader and is likely to remain so. However, if they get to dominance, as in market share at or above 50 percent, it will be inconsequential for them.
The company’s strategy for quite some time has been to invent new products that will be attractive to its installed base so that it can re-sell to its friends. The strategy has resulted in many new products and additions to the core CRM; like social media, process support, CPQ, BI, analytics and its development platform. Each new addition gives Salesforce more potential a little further from its core CRM business, however the company has always been strategic in its thinking to ensure full compatibility with its core.
Salesforce is in the process of becoming the Swiss Army Knife of software development. Its platform is at home developing systems of intelligence for all sorts of businesses, from finance to healthcare, and that’s a major reason that I’ve begun talking about the CRMification of society. The systems that we rely on to run our lives all seem to have a CRM root. Increasingly they are database apps surrounded by intelligence, making recommendations and anticipating our next moves.
My Two Bits
So believe it or not, I am impressed and somewhat relieved at IDC’s newest numbers. They show a market still in its early days and still growing with multiple, well-funded competitors, and consumers that are still skeptical enough to keep a large group of credible companies in pursuit.
At some point we might have to grapple with the idea that mom and pop businesses aren’t likely to adopt CRM, or at least the CRM now available. But that’s for some point in the future. For now, there’s still a lot of low hanging fruit.