SMBs Set to Spend US$2.4B on Hosted/SaaS CRM and ERP/SCM Services in 2007
Canada, France and Sweden may become the next largest adopters of hosted software solutions, with growth rates of 15%, says AMI Partners
NEW YORK--Small and medium businesses (1-999 employees) worldwide are on track to spend US$2.44 billion on hosted/SaaS CRM and ERP/SCM next year, up some 17% over 2006 levels. Fueling these investments will be strong demand for CRM (customer-relationship management) solutions from Britain, France, the US and Germany, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc.
These four countries alone are set to boost their hosted CRM spending to US$674 million in 2007, up 23% year on year. Investment trends in ERP (enterprise-resource planning) and SCM (supply-chain management) solutions in key countries in the Asia-Pacific region, especially by Japan and Singapore, will increase their investment by about 17% in 2007.
“Hosted/SaaS CRM and ERP/SCM are gaining market share over packaged software as more and more SMBs opt for these hosted services for their mission-critical applications,” says Spencer Richardson, New York-based analyst at AMI. “Hosted software solutions already account for 4% of the total global software spend by SMBs. This is set to rise in the coming years.”
Worldwide, Canada, France and Sweden may become the next largest adopters of hosted/SaaS CRM and ERP/SCM, with a compound annual growth rate (CAGR) of 15% over the next five years. Meanwhile, some level of market saturation will stabilize CAGR at 12%-13% for Britain, the US, and Germany. In terms of value, the US is likely to maintain its dominant market share of global hosted/SaaS CRM and ERP/SCM investment.
High demand outside the US comes from the insurance, real estate and financial services sectors. Britain, France, Singapore and Canada are set to each grow their hosted software spend by about 16%-17%. As for penetration rates for hosted/SaaS CRM and ERP/SCM within the SMB sector, Australia ranks first with 22%, followed by the US at 20% and Singapore at 16%.
“SMBs in the US spent more than US$1 billion on their hosted/SaaS CRM and ERP/SCM in 2006, accounting for 52% of the overall US$2 billion global investment in hosted software,” Mr. Richardson says. “Germany was second with US$179 million, or about 9% of the global hosted spend. Japan, Britain and France round out the top five with a combined investment of US$318 million in 2006.”
CRM-hosted software has seen the highest growth in the past year among hosted software solutions. Non-US spending in this category has risen from US$182 million to US$235 million this year, up some 22%. This rate is comparable to the US and demonstrates that similar business applications globally are driving the SMB appetite for hosted/SaaS CRM and ERP/SCM virtually everywhere.
About the Study
AMI’s 2005-2006 Global Technology and Telecom Model highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of SMBs worldwide, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. These data point to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.
For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, e-mail firstname.lastname@example.org, or visit the AMI Web site at www.ami-partners.com.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and “go-to-market” solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years’ experience in IT, telecom, online communications or multimedia.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 20 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.
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