The worldwide customer relationship management (CRM) software market has gained momentum, growing 13.3% in 2014, with the Asia/Pacific region experiencing the fastest growth at 18.7%.
In 2014, the market totaled US$23.2 billion, up from US$20.4 billion in 2013, according to Gartner.
"Large vendors leveraged their acquisitions to extend their position in new markets and to enrich the depth of their current feature sets in 2014," says Joanne Correia, Gartner research vice president.
"We saw market consolidation continue, and price wars started quickly as large vendors fought to keep their installed base from moving to other vendors and to stop the descent of their maintenance revenue," she says.
Overall, the top 10 CRM vendors accounted for more than a 60% share in 2014, or $14 billion, growing 14% over 2013.
The top 10 vendors in 2014 had very little change in ranking compared with 2013. However, with the notable exceptions of Salesforce and Microsoft, most vendors in the top 10 only held their positions or they lost share in 2014.
Salesforce remained in the top spot with 18.4% market share, up from 16.3% in 2013. SAP experienced little growth in revenue, but retained 12% of market share.
Oracle had 9.1% market share in 2014, Microsoft had 6.2% (up from 5.8%) and IBM had 3.8% of the market share.
"Strong demand for software as a service (SaaS) continues, with SaaS accounting for almost 47% of total CRM software revenue in 2014," says Correia.
"This is driven by organisations of all sizes seeking easier-to-deploy and faster-ROI alternatives to modernising legacy systems, implementing new applications, or providing alternative complementary functionality."
Buyers' preference for SaaS and strength in the sales sub-segment kept Salesforce in the number one position for the worldwide CRM market and raised the company to the number one position in customer support, says Gartner.
Pure-play vendors generally saw strong revenue growth as midsize and large organisations sought to build out digital market and customer experience capabilities.
Successful vendors, particularly pure plays, supported user demand for add-on functionality and the transition away from an on-premises model, according to Gartner.
More than 23% of 2014 CRM spending was in the communications, media and IT services industries because they focus on large groups using call centre technologies and have mobile field service and sales organisations.
Manufacturing (including consumer packaged goods [CPG]) is not far behind, with companies in this industry using CRM for product and channel management.
Third-ranked is banking and securities, in which customer service experiences and upselling to other financial products are core to growth, including through enhanced analytic capabilities, according to Gartner.