In 2019, spending on software as a service (SaaS) will reach approximately $42 billion and represent 75% of total customer relationship management (CRM) software spend, continuing the rapid decline of on-premises deployments.
Since 2016, sales software has the highest proportion of CRM software spending in the cloud, although marketing, customer service and support, and digital commerce all use SaaS-based CRM applications and we continue to forecast an increased spending on SaaS deployments.
In 2019, Gartner forecasts that SaaS sales software will account for 84% of total sales spend in CRM deployments. This is up from 77% in 2016, when sales software also showed the largest transition to cloud in percentage terms.
Organizations will continue to spend a growing proportion of their CRM software spending on SaaS, as it is easier to implement, initially less expensive, more flexible in deployment and provides increased business agility. Moreover, users of SaaS deployments can easily acquire software updates, provided automatically by vendors or available in an ecosystem of add-on apps, and do not need in-house capabilities or updates.
The applications of artificial intelligence (AI) are increasingly available as SaaS-only and will boost the adoption of SaaS-based CRM applications through increasing user effectiveness. Gartner estimates that by 2020, 30% of all B2B companies will employ some kind of AI to augment at least one of their primary sales processes.