Gartner Says Social CRM Market Will be $1 Billion in 2012

Gartner has predicted that the market for social CRM software will be over $1 Billion by 2012. According to the research firm, social CRM spending will rise exponentially in 2011 and a 3 year shakeout will begin in the space. The huge potential in the space has resulted in over 100 vendors entering the market and the shakeout seems to be the next logical fallout. Gartner defines Social CRM as a business strategy that mutually benefits cloud-based communities and the business by fostering engagement while generating opportunities for sales, marketing and customer service. The field is crowded and, according to Gartner, Salesforce.com will threaten a new market order.

Some of the predictions from the study include:

• More than 100 vendors have entered the space and over the next three years, social CRM market will see a shakeout
• SaaS will become unremarkable and mainstream
• Salesforce.com will threaten a new market order, and more consultants and system integrators will sell their own CRM software
• In 2012, Social CRM will be 8% of all CRM spending resulting in a market of over $1 Billion in that year
• By 2015, one-third of spending on new CRM software will be SaaS. SaaS CRM delivery was non existent in 2009 and rose to 24% in 2009, eventually reaching one third of new CRM spending in 2015
• Social CRM adoption in US is pretty decent but it is very limited in Europe

Whether it is established firms like Gartner or new age analysts like Ray Wang, they are bullish about Social CRM. Similarly, whether it is established CRM players like Salesforce or startups like Nimble, they are very confident that Social CRM will be big in the coming years. As a SMB user, I myself have personally seen how social CRM changes the way businesses operate and from my observations, the disruption is going to be even more in the enterprise space. In my research report on Cloud Trends in 2011 and beyond, I have highlighted this lift-off by Social CRM apps.

Social CRM will take off in a big way this year pushing players without a proper social strategy to either implement such features or lose out. Also, we are going to see much deeper integration between mobile address books with social networking services, thereby, taking the social data much closer to the users for easy consumption.

Clearly, this space is going to be interesting. Expect to see some interesting acquisitions in 2011 and 2012 in this space.

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