MGI Research forecasts cloud Configure-Price-Quote (CPQ) market will grow 16% by 2026

Global spend on CPQ tools expected to exceed $45 billion between 2022-2026

SAN FRANCISCO, Jan. 17, 2024 /PRNewswire/ -- Global CPQ spend is projected to grow from $7.4 billion in 2022 to $11.2 billion in 2026, according to a recent Total Addressable Market (TAM) Forecast by MGI Research. The five-year TAM for CPQ automation tools between 2022 and 2026 is projected to exceed $45 billion, growing at a compound annual growth rate (CAGR) of 11%.

The cloud-based CPQ market is growing faster, at 16%. The TAM for cloud CPQ tools is expected to reach approximately $34 billion over the same five-year period.

"CPQ tools are an attractive investment in all seasons," said Andrew Dailey, Managing Director at MGI Research. "CPQ solutions can improve sales productivity and boost deal sizes during growth periods. During downturns, CPQ helps maintain margins and drive efficiency."

The forecast projects the bulk of spending will come from large companies (with more than $1 billion in yearly revenues) based in the United States and Japan. Top-spending industries include industrials, automobile manufacturing, technology hardware, and construction and engineering.

CPQ improves the bottom line

The CPQ TAM Forecast indicates large, global enterprises are shifting away from spreadsheets, homegrown solutions, and legacy systems and investing in off-the-shelf CPQ tools in hopes of improving efficiency. Two-thirds of global spend on cloud-based CPQ tools will come from companies with slow, flat, or declining revenue growth.

"CPQ adoption is driven by the need to reduce sales friction, improve pricing accuracy, and ensure a smooth customer experience," said Dailey. "While younger, more agile companies have long seen CPQ as a table stakes requirement, demand is now increasingly being generated by larger, slow-growth organizations."

Services organizations (both standalone firms as well as services organizations within product companies) are predicted to grow by nearly 17% from 2022-2026, a slightly faster growth rate than the overall cloud-based market.

In contrast with cloud-based CPQ tools, the legacy, on-premises CPQ market is declining at a rate of -1.8%.

MGI Research TAM Forecasts are built using a proprietary forecasting model based on data from publicly listed companies. TAM and SAM data are available to MGI clients in custom cuts and can be subdivided down to the individual company level by segments such as company size, geographic regions, industry and sector, and impact from major industry trends like technology adoption style, shift to subscription, and impact of the Internet of Things (IoT), among others.

Additional information is available at www.mgiresearch.com/market-forecasts/.

About MGI Research for Configure-Price-Quote (CPQ)

MGI Research is an independent industry research and advisory firm focused on disruptive trends in business, finance, and technology. The firm was founded in 2008 by a group of senior analysts and executives from firms such as Gartner, Soundview, and Morgan Stanley.

MGI Research is the only firm with a dedicated practice around Agile Monetization and Quote-to-Cash, including CPQ, billing, payments, e-commerce, contract lifecycle management, financials, accounts receivables automation, and automated revenue management (ARM). MGI also covers the services automation markets – including Service-as-a-Business, project management, procurement, skills tracking/resource management, and time and expense management.

Through its research, vendor ratings, market forecasts, advisory engagements, benchmarking, and conferences, MGI Research helps clients identify opportunities for reducing IT costs and minimize technology risks.

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SOURCE MGI Research