E-sourcing software market to grow
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Hosted e-sourcing software will continue to dominate the e-sourcing market over the medium-term, say Forester Research, but market growth will slow from 10% in 2003 to 5% in 2005 as companies replace hosted software with broader spend management suites that include e-sourcing.
Most companies will continue to use third party services to handle their e-sourcing needs for the next few years, according to IT industry analyst group Giga. As a result, by 2006, the hosted e-sourcing market will be worth about $690 million and will
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But while the hosted market will plateau after 2006, the e-sourcing software segment will continue to grow.
Currently, all but the largest organisations prefer to access e-sourcing facilities on a hosted basis, since they have neither sufficient demand for e-sourcing applications nor the necessary in-house skills to maintain specialist software themselves. But broader spend management suites, lower prices, maturing technology and more mid-tier offerings will gradually encourage more businesses to adopt e-sourcing software.
Giga expects some organisations to shift to a self-service hosted model, allowing staff to gain more experience without incurring the costs of buying and installing e-sourcing software. As skills increase, more companies will licence e-sourcing software.
As a steady stream of new suppliers enters the market, prices will fall and demand will grow among companies with less than $1 billion in revenue, says Giga.
Interesting to look back in time like this. Looks like Giga is quite correct in that the self-service model is the future. Also quite right that such a service will be offered more to the SME market. This is exactly what we are seeing.
It's for these reasons that we set up Market Dojo, which offers e-sourcing software for the SME market at a transparent price level.
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