AMR projects 3% increase in enterprise applications market in 2003
Scottsdale, AZ—The enterprise applications market is predicted to grow 3% to reach a total market size of $36.9 billion by the end of 2003, according to research released June 5 by AMR Research (Boston, MA) at its Spring Executive Conference.
Scottsdale, AZ— The enterprise applications market is predicted to grow 3% to reach a total market size of $36.9 billion by the end of 2003, according to research released June 5 by AMR Research
The company says its survey results point to an improving economic climate for information technology (IT) spending. AMR adds that, while the forecast is modest, the outlook is positive, with an emphasis on smaller, incremental purchases. In its 'Enterprise Applications Market Forecasts,' AMR attributes its optimistic outlook to building demand for new application projects, and the increased penetration of major Enterprise Resource Planning (ERP) vendors in markets, including Supply Chain and Customer Relationship Management (CRM).
The firm released market projections for the major application categories it tracks, the forecasts for which clearly show slower long-term growth than expected and overall consolidation and maturity in many markets. Key highlights of AMR's projections in each market segment include:
Enterprise Resource Planning (ERP), which will grow from a projected $20.6 billion in 2003 to $21.6 billion in 2004. ERP's traditional messages around integration, internal controls, and cost savings have been well received in the current economic environment. AMR expects continued market consolidation, as larger ERP vendors and investment firms make acquisitions to increase the size of their customer base and expand into new horizontal, vertical or geographic markets.
Customer Relationship Management (CRM), which struggled in 2002 and dipped 1%. The corporate mantra of cost savings took a heavy toll on newer generation products, such as online sales, marketing, and analytical applications. More traditional products, such as Sales Force Automation (SFA) and customer service/call centers tended to fare better during the past year. Long term, AMR Research expects 9% annual growth, with the market reaching $10.8 billion in 2004.
Supply Chain Management (SCM), which is expected to grow to $6.0 billion in 2004, up from a predicted $5.6 billion in 2003. This growth will likely be fueled by a continued focus on cost savings and the increasing complexity of corporate supply chains. Products from the major ERP vendors should enjoy healthy growth on the Supply Chain Planning (SCP) side. Overall, however, the highest growth is expected in supply chain execution applications, such as order fulfillment and inventory management.
Sourcing & Procurement, which was dragged down 9.5% in 2002,
AMR adds that its annual enterprise market forecasts are based on surveys with more than 1,000 software vendors representing ERP, Procurement, SCM, Product Lifecycle Management (PLM), and CRM platforms. The analysis consists of end-user surveys that measure spending and penetration in each application area. Metrics are based on total revenue, product type, software revenue, applications segments, operating environment, regional market, customer size, vertical industry, and sales channel.
Control Engineering Daily News Desk
Jim Montague, news editor
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