The enterprise applications market is set to rise at a compound annual rate of 6.3% over the next few years, with worldwide revenues rising to $64.8 billion in 2009, up from $47.8 billion in 2004, according to analysts at AMR Research.
Over that period, the powerhouses of enterprise resource planning (ERP) – such as SAP and Oracle – will continue to spread their tentacles beyond those core applications. Indeed, while in 2000 87% of vendors’ revenues were derived from ERP software, by 2004 that proportion had fallen to 75% as vendors pushed into application areas such as customer relationship management (CRM) and supply chain management. In particular, the proportion of ERP vendors’ revenues derived from CRM applications has leapt from 6% to 12% over the past four years.
AMR also observes a potential upheaval in the market. The pricing model for certain applications is being challenged by the success and growing presence of hosted application services such as Salesforce.com, RightNow and NetSuite, leading AMR to predict that application hosting will grow at a rate of 22% per year through to 2009.