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Enterprise Application Software Market Overview and Trends
Frost & Sullivan, Oct 2009, Pages: 211
In this research service, Frost & Sullivan has evaluated the current state of the Enterprise Application Market which includes Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and Supply Chain Management (SCM) and factors that will drive and restrain its growth in the future. Apart from market drivers and restraints, the study also includes revenue forecasts, demand across various verticals and some of the emerging technologies in the Enterprise Application space. This research service covers the geographical regions of India, Saudi Arabia, United Arab Emirates (UAE), Egypt and Sri Lanka
This Frost & Sullivan research service titled Enterprise Application Software Market Overview and Trends provides an in-depth analysis of market drivers and restraints, industry structure, and competitive environment. The study deals with the challenges and issues faced by market participants in South Asia (India and Sri Lanka) as well as the Middle East and North Africa (MENA) region comprising the United Arab Emirates (UAE), Saudi Arabia, and Egypt. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM).
Market Overview
Need for Enhanced Business Efficacy Drives the Enterprise Application Software Market
The need for enterprise applications in South Asia (India and Sri Lanka) and MENA (U.A.E., Saudi Arabia and Egypt) region variegates. All the countries demand varied degrees of integration in enterprise applications as per the nature of demand of the market. Some countries demand a high degree of customization for their applications and localized products, whereas end-users in other countries are more global in nature and demand less cusomisation/packaged products. The diversity of all these markets is guided by nearly the same market factors and hence prospects for the enterprise application (EA) software market look upbeat as companies are increasingly deploying these robust technologies to improve customer service and expedite business operations. The need for creating competitive advantages such as optimization of capacity, reduction of lead time and cost as well as increased profit through IT implementation is a major factor propelling the market forward. As scalability of IT systems is a priority, companies are seeking business solutions that can grow in tandem with the organization. Chief technology officers (CTOs) and chief information officers (CIOs) are demanding domain-/user-specific functionalities in sync with business requirements. 'The on-premise model is still the preferred choice over the on-demand model, but organizations are analyzing the benefits of moving large-scale software expenses from their capital budget to their operating budget,' notes the analyst of this research service. 'Awareness about the on-demand/hosted model is spreading and more vendors are planning to provide applications on the hosted model.'
While the global economic crisis has exerted pressure on organizations to do more with less and conservative IT spending has slowed the pace of EA adoption, markets are slated to witness increasing growth with varied extent from 2010. In the Indian EA software market, organizations that are directly dependant on the international market have displayed a cautious attitude, while those operating within the domestic space were able to cash in on the demand upswing for EA. Increasing small and medium business (SMB) focus has translated into ERP vendors targeting micro verticals such as insurance, power, food and beverage among others, and tailoring applications as per the need of the SMB segment. Sri Lanka characterizes high presence of SMB’s with small pockets therefore most of the enterprise in Sri Lanka cannot afford mainstream ERP or CRM products. Thus, the market offers more opportunities for mid-range participants. The UAE comprises a niche market with a few verticals. Dominated by the SMB segment, this market offers great opportunities for tier II vendors. End-users in U.A.E. are more global in nature and demand less cusomisation/ packaged products. Saudi Arabia is the largest market in the Middle East for EA, offering vast potential for EA implementation. Egypt has very low penetration in terms of enterprise applications. Egypt has presence of strong price sensitive mid market enterprises therefore dependency is more on home grown solutions. But increasing footprints of international organizations in the region and growing demand from the existing large organization is making Egypt a promising market.
The EA software market has been monopolized by the ERP solution segment, which is expected to grow at a compound annual growth rate (CAGR) of 27.2 percent. However, organizations are not opting for ERP systems with the full range of modules. They utilize only a few modules initially, hoping to install the entire package over time as business expands and needs intensify. 'Organizations are displaying a preference for an integrated CRM and SCM solutions with enterprise resource planning (ERP) especially in SMB sector,' says the analyst. 'However, pure play CRM and SCM solutions are likely to pick up traction as companies expand.' The customer-centric approach adopted by organizations is a major force driving CRM software. CRM is expected to continue on its growth trajectory in the foreseeable future, as even the manufacturing sector is demanding entry-level CRM. The IT/ITES vertical is expected to contribute significantly to the growth of this sector. Going forward, end users are likely to become more value sensitive, and price will not be a strong differentiating factor as mainstream vendors are also providing solutions at competitive price points.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Enterprise resource planning
- Supply chain management
- Customer relationship management
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