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9 percent market share in 2005. Increased midmarket opportunity drove growth across the CRM market for both the large suite vendors and on-demand providers, such as Salesforce.com. Siebel’s strong fourth quarter results drove growth, but at the expense of Oracle and PeopleSoft CRM solutions. Industry specialists such as Amdocs also benefited from high demand for vertical market solutions.

Gartner has traditionally measured market share in terms of new license revenue. However, due to the emergence and increasing popularity of open-source software and buyer consumption models such as hosted and subscription offerings, Gartner has moved to measure market share in terms of total software revenue. This includes revenue generated from new license, updates, subscriptions and hosting, technical support and maintenance. Professional services and hardware revenue are not included in total software revenue.

“Merger and acquisition activity continued relentlessly in 2005, as large vendors acquired smaller firms and as market leaders acquired each other,” Ms. Mertz said. “Market consolidation in 2005 remained a driver for best-of-breed and suite providers by offering a compelling value proposition and capitalizing on temporary buyer uncertainty. Buyers were solidly focused on new customer acquisition, expanding wallet share, process optimization, and business accountability.” Additional information is available in the Gartner report “Market Share: CRM Software Worldwide, 2005”.