Small and medium businesses, those with fewer than 1,000 employees, worldwide are on track to spend US$2.44 billion on hosted/SaaS CRM and ERP/SCM in 2007, up some 17 percent over 2006 levels, according to a market forecast by AMI-Partners. Fueling these investments will be strong demand for CRM solutions from Britain, France, the US and Germany.

Some interesting points:

These four countries alone are set to boost their hosted CRM spending to US$674 million in 2007, up 23% year on year.

"Hosted/SaaS CRM and ERP/SCM are gaining market share over packaged software as more and more SMBs opt for these hosted services for their mission-critical applications," says Spencer Richardson, New York-based analyst at AMI. "Hosted software solutions already account for 4% of the total global software spend by SMBs. This is set to rise in the coming years."

High demand outside the US comes from the insurance, real estate and financial services sectors.

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 US$1 billion on their hosted/SaaS CRM and ERP/SCM in 2006, accounting for 52% of the overall US$2 billion global investment in hosted software," Mr. Richardson says.

CRM-hosted software has seen the highest growth in the past year among hosted software solutions.

Non-US spending in this hosted CRM category has risen from US$182 million to US$235 million this year, up some 22%.

via Tekrati

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Prashanth Rai