Small and medium businesses (1-999 employees) worldwide are on track to spend $2.44 bln on hosted/SaaS CRM and ERP/SCM in 2007, 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 AMI Partners. These 4 countries alone are set to boost their hosted CRM spending to $674 mln in 2007, up 23% YTY. 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.
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 $1 bln on their hosted/SaaS CRM and ERP/SCM in 2006, accounting for 52% of the overall $2 bln global investment in hosted software. Germany was second with $179 mln, or about 9% of the global hosted spend. Japan, Britain and France round out the top five with a combined investment of $318 mln 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 $182 mln to $235 mln 2006, 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.