SMB demand to drive Aussie enterprise applications growth
SMB demand to drive Aussie enterprise applications growth
Improved economic conditions are set to propel the Australian enterprise applications software market by 9.1 percent by the end of the year.
That is the key finding of a new study into the market segment by research group IDC. IDC estimated the Australian enterprise applications market was valued at $574.9 million in 2003. It anticipates that the improved economic conditions will propel the market to $632.2 million by the end of 2004.
In addition, a number of end-user surveys conducted by IDC indicated an uplift of applications spending over the next few years. By 2008, the enterprise applications market is projected to reach $840.7 million, a 7.9 percent compound annual growth rate (CAGR) through the forecast period from 2003 to 2008.
IDC outlined a number of contributory factors in its estimate of the level of growth in the enterprise applications market, primarily the global economic recovery, which IDC believes will translate into additional enterprise applications spending by corporations that want to bolster productivity and gain competitiveness.
Additionally, IDC predicts that consolidation among enterprise applications vendors will usher in a stronger set of players that possess the economies of scale and the breadth of product offerings to meet customer needs across multiple industries and regions, while end user survey data indicates that upgrade and replacement cycles among enterprise applications customers appear to be accelerating, and a confluence of factors, including the explosion of broadband users, relentless drive for better productivity by corporations, demand for customer service improvement through advanced software, and the move to embrace wireless and mobility solutions, are all contributing to the more rapid upgrade and replacement cycles.
The study also revealed that the demand from the enterprise market has softened, which has consequently seen vendors respond by making available 'lite' versions of their applications to attract customers from the mid-market. This trend is predicted to continue throughout 2004 and is very relevant to Australia because of the high proportion of mid-market customers in comparison to large enterprises in the local market.
"Systems integrators, alongside ISVs, will play an increasingly important role as hosted solutions starts to emerge in Australia," said Bharati Poorabia, senior analyst, enterprise applications, IDC Australia. "This will change the nature of implementation and integration services in the long term and will allow vendors the opportunity to shield the complexity of systems from customers. End-users will continue to look for a number of things as the market moves forward. Gone are the days that companies felt that they needed to deploy best-of-breed standalone applications to remain competitive. Companies now look for integrated, end-to-end solutions that are easily deployed. As such integrated solutions that are aligned to more than one business process will be in demand."
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