Cloud CRM applications revenue to grow 24% in 2014.
The customer relationship management (CRM) software market is set to reach $5.5bn this year, according to Gartner.
The western Europe market is expected to rise at more than 9%, reaching $5.5bn by the end of 2014, claimed the analyst house.
According to the research firm, the market will be mainly driven by increasing cloud adoption, with nearly half of CRM applications in the market being offered on SaaS infrastructure this year.
To cater for the rising demand, about 50% of European organisations are planning to boost their spending on CRM initiatives this year, up 2.5%, in the midst of regular economic uncertainty.
By the end of 2014, the overall revenue for cloud CRM applications in the region is expected to grow 24%, reaching a total of $2.3bn.
Gartner research director Jim Davies said the survey findings highlight the continuing trend for organisations to commit to improving the management of their customer relationships.
"We are observing an increasing number of large, transformational projects being undertaken as organisations look to embrace social and mobile interactions for sales, marketing and customer support," Davies said.
The survey respondents cited lack of a clear CRM strategy as their major concern among the biggest obstacles threatening the success of their customer initiatives.
"Organisational commitment to the customer experience continues to rise, as business leaders appreciate the benefits of providing differentiated and consistent cross-channel experiences," Davies added.
"A new objective added to the list of options this year was ‘increase customer engagement,’ which jumped into the No. 2 position and further demonstrates the growing desire of European organisations to get closer to their customers and have a more mutually beneficial relationship."
"During the past 10 years, customers’ trust in big business has declined rapidly. Customers have become more willing to complain, more willing to switch suppliers after a poor experience and more likely to tell others about it," Davies added.
"Social media and mobile adoption have caused fundamental shifts in how, when and why customers engage with each other and how they expect to be able to engage with organisations.
"These two overlapping factors are forcing organizations to rethink their approaches to CRM, and are creating a need for new customer strategies."