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How Well Is SAP Competing With Salesforce For The Future Of CRM?

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The global Customer Relationship Management market has been growing at a phenomenal pace over the past few years. According to Gartner, the CRM software market reached $26.3B in 2015, with an annual growth of nearly 14% between 2010 and 2015, and is expected to cross $36 billion by the end of 2017. Salesforce has been a market leader in the CRM space for some time now, and continues to improve its position. We estimate that the company’s market share has more than doubled since 2010, and stood at 22% in 2016. Salesforce’s early foray into the cloud-based CRM space has given it a competitive edge. Its rival SAP , on the other hand, saw its market share fall from around 15% in 2010 to around 11% in 2016. SAP lost some share to Salesforce largely due to its relatively later entry into the cloud space. Going forward, we expect Salesforce to maintain its competitive edge and continue to add significant market share by leveraging artificial intelligence and machine learning.

What Is Salesforce Doing Right?

The entire software industry has seen a gradual shift towards cloud-based implementation and the SaaS (software as a service) model because of its reduced upfront costs, flexibility and easy implementation. Gartner estimates that annual global cloud IT market revenue will grow to $390 billion by 2020, implying annual growth of 17%.

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