Popularity of Hosted CRM Applications Continues to Grow, According to New Aberdeen Group Report(email this article)

BOSTON, MA - September 8, 2003 - The popularity of hosted CRM applications - those delivered as services via the Internet rather than by conventional software delivery models - continues to gain acceptance in the marketplace, according to a new report by Aberdeen Group (Company Profile, Past Stories, Case Studies), a leading IT market analysis and consulting firm.

According to the report, Hosted CRM Popularity Continues to Grow, 35% of survey respondents said they already use hosted CRM products and 85% of respondents said they would evaluate hosting as they enter the market for CRM solutions.

"Application hosting in the CRM market is clearly showing signs of robust growth," said Denis Pombriant, vice president and research director in Aberdeen's CRM practice and author of the report. "Our data also suggests that companies are looking beyond the current slowdown to a period of more vigorous growth, and that application hosting is an important component to such growth strategies."

The report also notes, however, that the CRM industry faces challenges in the years ahead. The sluggish economy and the changing complexion of the CRM marketplace will force vendors to find better, less expensive, and faster ways to provide the benefits of CRM to budget-constrained buyers who may be skeptical of the technology's ability to deliver value.

"Hosting is a major challenge to an industry accustomed to selling software licenses at high margins, as well as a sibling services industry that frequently charges two or three times the license fee for implementation services," Pombriant continued. "But for hosting to become a credible alternative to licensing, customers must be able to find long-term value in the solutions."

Research for the report was conducted with RealMarket a premier CRM portal site with more than 30,000 readers. Over 150 RealMarket subscribers - a statistically significant group - completed the Aberdeen survey. For more information about Hosted CRM Popularity Continues to Grow, please visit www.aberdeen.com or follow this link. About Aberdeen

An IT market research leader since 1988, Aberdeen Group continues to distinguish itself in a rapidly changing industry. Its forward-thinking research initiatives and positioning services are designed to address specific needs of multiple enterprise technology buyers and supplier organizations.

Aberdeen's vigorous primary research program is based on surveys of targeted IT buyers in more than 25 market segments, providing real-time insights into buying patterns, growth rates, and trends. In exchange for participation, a vast array of research is made available online and at no cost, a process that has proven particularly valuable to small and medium-sized businesses.

Aberdeen also works with a wide range of supplier organizations, from start-ups to established global corporations, to successfully bring products to market and effectively target marketing and sales efforts. Through Aberdeen's online Access sites, which are focused on specific buyer and user communities, suppliers can access qualified survey research that helps them identify opportunities and better understand the needs of customers. Aberdeen's Web traffic is among the highest - and fastest growing - of any major IT research firm.

Headquartered in Boston, Massachusetts, Aberdeen has research and consulting divisions in Palo Alto, California, and Fort Collins, Colorado. Aberdeen is accessible on the Web at www.aberdeen.com.