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Midmarket CRM makes Wave

Forrester's ranking of the midmarket CRM software vendors comes as research firms are predicting big things in the CRM midmarket and with SaaS.

These are heady times for midmarket CRM. Two research firms recently issued reports highlighting significant growth, and a third predicts that Software as a Service (SaaS), the technology pushing much of the midmarket spending, will continue to pick up steam.

According to New York-based Access Markets International (AMI) Partners Inc., almost 40% of midsized businesses use CRM applications today, and almost one quarter plan to adopt CRM in the next year. That amounts to some serious spending. Cambridge, Mass.-based Forrester Research Inc. predicts that small and midsized businesses (SMBs), companies with 1,000 employees or fewer, will account for 38% of total CRM spending by 2010, reaching $4.2 billion.

Meanwhile, Gartner Inc., based in Stamford, Conn., said this week that the SaaS market will grow from $6.3 billion in 2006 to $19.3 billion by 2011. CRM and human resources applications have fueled the initial deployments, and SaaS is now expanding to procurement and compliance management, according to Gartner.

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See how Forrester ranked the enterprise CRM vendors

Compare last year's CRM Wave report to this year's

While SMBs present a major opportunity for CRM vendors, one of the largest SaaS CRM vendors is pushing its way into enterprise businesses. Last week, San Francisco-based announced a In fact, was identified as a "strong contender" in the Dynamics CRM 3.0 release. It, too, is planning a Open source vendors like CentraView and Vtiger are also appearing in deals, according to the report, particularly in shops that already have some stake in open source technology.

Vendors are also beginning to champion hybrid deployments -- one part on-premise, one part on-demand -- in the midmarket, but adoption has been slow.

"The vendors who offer it have been able to showcase some examples, but we're not seeing overwhelming demand," Herbert said. "I do see some demand for the ability to shift from one to the other."

Some firms are starting out with on-demand and then turning to on-premise as they look to customize the application or take control of pricing.

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