Mumbai: Global customer relationship management (CRM) software revenue totaled $ 18.09 billion in 2012, up 12.5 per cent from $ 16 billion in the previous year, research firm Gartner said.

Salesforce.com surpassed SAP to become the lead vendor in the worldwide CRM software market in 2012, Gartner said in a statement.

"Competition among CRM software vendors really heated up in 2012, as major players continued to vie for broader market penetration internationally along with more widespread adoption within midsize to large enterprises," Gartner Vice President Joanne Correia said.

Market growth in 2012 was three times the average for all enterprise software, highlighting how CRM is at the eye of the 'Nexus of Forces' storm, Correia added.

Vendors benefited from strong demand for software as a service (SaaS), which represented nearly 40 per cent of CRM total software revenue in 2012.

Organizations of all sizes sought easier-to-deploy alternatives to replace legacy systems, as net-new applications or to provide alternative complementary functionality, it said.

The top five CRM vendors accounted for nearly 50 per cent of CRM software revenue in 2012.

Salesforce.com replaced SAP as the largest vendor in the CRM market with its direct sales pushing its CRM revenue to more than $ 2.52 billion.

Growth of SAP, which was in the second-place, was less than one per cent in USD terms ($2.32 billion). This was largely due to currency headwinds being stronger and euro being weak in 2012.

Oracle's revenues stood at $2.01 billion, while that of Microsoft and IBM were at $1.13 billion and $649.1 million, respectively.

North America and Western Europe remained the largest regions for CRM, accounting for more than 80 per cent of total software revenue, but all regions saw growth, Gartner said.

Eastern Europe, Eurasia, the Middle East and Africa continued to be areas of growth, with IT spending for the modernization of countries' infrastructure (utilities, telecommunications, banking and government), it added.

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