Enterprise applications company SAP now believes it has the arsenal to displace long-term incumbent CRM leader Salesforce by disrupting the technological model underpinning the market. And SAP CEO Bill McDermott says the company will not rest until it dominates the field – one where it has actually lost ground for several years.
“We will not waiver, we will not bend until we finally take over the CRM marketplace. So this is a priority of the highest magnitude for the company,” he said today on the opening day of its annual user conference in Orlando, Florida.
The prize is worth the conquest. CRM is the world’s largest enterprise applications market, according to analysts.
Earlier this year, Gartner revealed that its data showed CRM relegated the database management market category into second place. At the time it noted that worldwide CRM software revenue amounted to $39.5 billion in 2017. By contrast, the global DBMS market stood at $36.8 billion for the same period. And the gap is set to widen.
“In 2018, CRM software revenue will continue to take the lead of all software markets and be the fastest growing software market with a growth rate of 16 percent,” said Julian Poulter, research director at Gartner.
And while it is a market lead by Salesforce, that leadership is hardly overwhelming. Despite being a mature sector, the CRM market is highly fragmented. Salesforce is believed to have less than a quarter of the market which has steadfastly resisted consolidation.
SAP believes with the release of SAP C/4HANA, which it announced at Sapphire today, it can rebuild its position in the market which, according to Gartner has been shrinking since 2010 when it peaked at 15 per cent. By 2016 it retreated to just 11 per cent, less than half its rival.
Perhaps in acknowledgment of this, the SAP CEO told Sapphire delegates, “In the CRM market SAP was the last to accept the status quo and [we will be] the first to change it,” McDermott said.
According to McDermott, legacy CRM is holding companies back because they are unable to get a single view of the customer. Without mentioning Salesforce by name, he said the approach adopted by C/4Hana, built on the back of SAP’s Hybris, Gigya and Callidus Cloud acquisitions would help reorientate business from a 360 degree view of the world based on sales automation to a 360 customer view.
“It will move them from a world where nothing happens when you add a record to CRM to a world where everything happens when you improve the customer experience.”
In comments to reporters and analysts later, he elaborated on the CRM strategy.
“We see that the CRM market is full of opportunity. It’s the largest enterprise market today with $45 billion in market size (in2018)growing the fastest. And we think there’s a significant change taking place.”
He said that customers are looking for trust and that means that customer relationships data needs to be protected. “We also made a case that the connected enterprise and the connected experience matters. And that’s the inflection point that we see, the customer experience has to connect. And the employee experience needs to connect with the supply chain. And the only company that can do that is SAP.”