The worldwide market for analytics software will reach more than $4.8 billion by 2007, according to a report issued by International Data Corp.
According to the report, the market for analytics at the end of 2002 stood at slightly more than $3 billion. The Framingham, Mass.-based researcher separated the analytics market into three sectors: CRM, financial business performance management, and operations. CRM analytics is expected to grow the fastest, with a compound annual growth rate of 12.9%, according to Robert Blumstein, a research director at IDC.
"First of all, it's visible; it's attracted a lot of attention," Blumstein said. "There's been less automation in the past in CRM than the other sectors. Companies have all that data. The next question is, 'Why did we spend the $2 million to get that data if we're not using it?'"
Companies are re-examining marketing in light of some of the new algorithms that have optimized functionality, which will also help spur growth, Blumstein said.
The financial analytics/business performance management sector is expected to grow at a 10.3% rate and operations at 7.4%, according to the report.
The report recommends that vendors with a presence in one of the three sectors expand into the other two, either through new development, acquisitions or partnering.
Despite some recent high-profile mergers and acquisitions, Blumstein said there is still room for new vendors to provide analytics applications.
"There are all sorts of new companies cropping up," Blumstein said. "Someone always thinks of a new way to optimize something that no one had thought of a way to optimize before, particularly in marketing."
The spending report is based on a survey of companies ranging from large enterprises to small businesses, Blumstein said.
FOR MORE INFORMATION: