MARKET RESEARCH.

Sales Force Automation Software Market Expected To Hit $5 Billion By 2003

Fueled by the Internet and the increasing popularity of customer relationship management, sales force automation (SFA) software revenues are about to take a quantum jump. From less than $888 million in 1998, they will soar to almost $5 billion by 2003, predicts a just published International Data Corp. report.

"The Internet's potential to change much of the way buying and selling is done cannot be overstated," emphasizes Judy Hodges, director for IDC's Customer Relationship Management research program. "Universal browser access to global servers and databases and other developments have led to new and revolutionary forms of ecommerce and many diverse innovations affecting sales force automation and customer relationship management."

According to IDC, the market for SFA software is currently in the early majority stage. Companies are looking for ways to retain customers and increase revenues, and SFA software can help them meet their goals.

"Businesses of all sizes are realizing the benefits of automating their core processes, and highly motivated buyers are fueling the demand for systems that manage the entire scope of the sales process," Hodges says. "With the increased ability to collaborate and share information globally, quickly uncover new leads with integrated database marketing, and standardize the selling process and manage the selling cycle, salespeople are better able to manage their activities and spend more time on actual selling."

The United States leads other regions in the deployment of SFA software, accounting for more than 71 percent of revenues in 1998. Throughout IDC's forecast, however, US revenues will increase at the slowest rate, and in 2003, its share will have fallen to 67 percent.

The report says Siebel Systems is "very well positioned" to extend its leadership in the SFA software market. Currently, it is the only vendor to have a double-digit market share, and it recently expanded its product line so that it now has offerings appealing to companies of all sizes, across many vertical industries. For more information on the report, Sales Force Automation Software: 1999 Worldwide Markets and Trends, visit www.idc.com.

Study Shows US Internet Audience Growth Slowing Significantly

The US Internet audience is growing significantly slower than it used to, forcing online marketers to focus more attention on attracting visitors from competitive sites and to raise the customer service standard necessary to retain loyal online customers, finds a Cyber Dialogue analysis of online audience growth since 1995. The findings are published in a new report entitled Cybercitizen Sea Change: Declining Growth in US Adults Online.

"Cyber marketers can no longer count on a rising tide of new users in the US to float all boats," warns Thomas Miller, vice president of Cyber Dialogue. "Some online marketers can feasibly target global markets to expand their audience, but most must begin to shift resources to better emphasize online customer retention, cross-selling and persuading customers to purchase more expensive products at their Web sites."

The report concludes that the decline in audience growth is not merely a seasonal aberration, but the result of a series of constraints. One persistent barrier is the so-called demo graphic "digital divide" between consumers who can afford PCs and online access and those who cannot.

The company's research also identifies two other important non-user segments, one of which is a solid pool of adults who simply believe they have no need for the Internet. Roughly a third of all US adults fit this description. But more disturbing is a growing segment of adults who have tried the Internet and discontinued use. This segment totaled 27.7 million adults in September, up from 9.4 million found in early 1997. Only about a third of these past users expect to go online again any time soon.

"The name of the game today is to increase your share of your online customers' wallets, not just your share of online eyeballs," says Miller. "Effective customer relationship management strategies are much more important today than in the past." The study finds that an important implication of declining online audience growth is increased importance attached to building online user segmentation models capable of predicting site visitors' contribution to value, however value may be measured for a particular Web site. For one site, value may be defined by stimulating visitors to spend more time on the site. For other sites, bigger spenders may actually prove to spend less time on the site, according to the company's research.

Color Market Growing, But Vendors Must Educate Companies On Benefits Of Color Printing

Color printers are becoming more prevalent in the business market, but a recent poll by Dataquest shows 62 percent of businesses surveyed still use color printers differently than monochrome printers, a fact impacting the acceptance of color as a widespread replacement for monochrome printers.

"There are still barriers to the acceptance of color in business such as the cost of acquisition, print speed of currently available color printers, print quality/durability and, increasingly, cost of operation," says Paula Bursley, senior industry analyst for Dataquest's Printers North America program. "One of the most significant barriers to color printing is that most users don't have a need to print most documents in color. These two elements -- need and appropriate products -- must come together for the widespread acceptance and use of color printers."

Hewlett-Packard was named the primary color printer vendor by slightly more than 80 percent of respondents, compared with almost 78 percent last year. Epson was the second-most popular color printer vendor, followed by Canon.

Dataquest analysts say vendors must develop strategies to educate the user base on the benefits of color printers. "Equally important, vendors must develop color printers that are competitively positioned against their monochrome counterparts and combat the market barriers," Bursley says. "Vendors wishing to continue to compete in the business printing marketplace will need to develop a complete portfolio of color printing solutions."

Almost 81 percent of the color printers at the sites surveyed were ink jets. About 16 percent were color laser printers, up slightly from 13 percent in 1998. "Color lasers are now much more aggressively priced and manufacturers have been working to address some of the barriers to acceptance like speed and paper handling capabilities," Bursley says. "This said, the complexity of the technology and cost of operation are still significant factors that are limiting larger growth."