ERP demand starts to climb
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Sales of core business applications by large enterprises are expected to reach $26.7 billion this year, and should continue on an accelerated upswing until 2008, according to researchers at IDC.
Spending on core business applications by large enterprises is on the rise again. Research by IDC estimates that organisations will purchase $26.7 billion worth of enterprise resource management software in 2004, up 7% from 2003.
Indicating that is no blip, IDC predicts that the market should continue on an accelerated upswing with a compound annual growth of around 8% to reach $36 billion in 2008.
The revival is being driven by demand for more integrated solutions that promise to boost productivity, profitability and competitiveness. Moreover, increased investment from mid-sized customers, government agencies and industries such as healthcare is also helping to stimulate the market.
IDC points to on-going consolidation. The top 10 vendors of core business applications secured 46% ($11 billion) of the global market in 2003, compared to 44.5% and 42% in the previous two years. It identifies the top 5 business applications vendors in the field are SAP, PeopleSoft, Oracle, Microsoft and Sage.
Over the next four years, the top 10 horizontal and vertical vendors will look to expand their grip on the market. However, potential challengers, such as open source business applications vendors and new players such as China Dot Com and United Health Group, may have an impact on how ERP software is delivered in the future, says IDC, presumably referring to applications delivered as a service over the Internet.
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