CRM continues to rock and roll.

Last week, Gartner released their 2008 CRM Report. Details can be seen here.

Highlights

• Worldwide CRM Market grew 12.5% (from 2007-2008)
  
• Microsoft experienced the strongest growth around 75% (from 2007-2008)
• Salesforce.com grew 42.7% (from 2007-2008)
• Estimated 2008 Microsoft Revenue for CRM around $581M
• Estimated 20088 Salesforce.com CRM revenue around $965 M
• SaaS (Sofware as a Service) continues gaining momentum representing 20% from just over 15%

My observations

• CRM as a whole continues to rock and roll.
  
• Makes sense that SAP and Oracle are still market leaders with their legacy software being around for a long time (Peoplesoft, Siebel etc) but the market shares are definitely flatlining if not declining
• Microsoft Dynamics CRM and Salesforce continue their hot growth.
• Emerging markets will be the next big growth area
• One of the things that I dont think is accurate is the estimated Microsoft Dynamics CRM revenue of around $581M. That number seems too high to me. My guesstimate will be that Microsoft Dynamics CRM revenue will be b/w $400M - $500M. (Explanation below)
  

Ever since Microsoft stopped reporting the Dynamics (formerly known as Business Solutions group) revenue separately in 2006, its not been easy to get the numbers.

Back in 2006, the last time Microsoft officially reported Business Solutions group revenue, it was around $919 million. That included CRM, AX(Axapta), NAV (Navision), GP (Great Plains), SL (Solomon) and other products in the Dynamics product line.

At Convergence 2008, Kirrill Tatarinov (Head of Dynamics) mentioned that Dynamics revenue was around $1 billion. Internal sources within Microsoft had Dynamics CRM being around 20-25% of overall Dynamics Revenue. Even if we take the high end of that 25%, which means Microsoft Dynamics CRM revenue was around $250M. Taking into account 75% growth, that will be around $440M. With a 10% buffer either way, it bumps it upto around $485M. So my guesstimate will be b/w the $400 - $500M figure.

Now, one thing I am unclear is if Gartner included the other Dynamics product lines such as AX, NAV which have a quasi-CRM module in the overall CRM revenue figure for Microsoft? Although AX (Axapta), NAV (Navision) have a semiCRM module they are mainly ERP (Enterprise Resource Planning) products.

So
If Gartner estimate of Microsoft's CRM revenue consists of Microsoft Dynamics CRM, Microsoft Dynamics AX and NAV, then yes $581M for 2008 is definitely possible.

But
If Gartner estimate of Microsoft CRM's revenue is solely Microsoft Dynamics CRM, $581M seems too high.

But that being said, Microsoft Dynamics CRM continues to be a rockstar and it along with Salesforce keep gaining momentum and traction.