Scottsdale, AZ June 3, 2002 The market for enterprise applications will hit $70 billion by 2006, according to a forecast issued by technology consultancy AMR Research at its recent annual executive conference here.
"Our analysis reveals the return of bottom line-focused, pragmatic buyers and companies that demand real, measurable benefits from suppliers before they invest," said Tony Friscia, AMR president and CEO. "Those companies who fulfill a recognized need and prove [return on investment] will be the future success stories."
AMR predicted total revenues for companies that sell enterprise resource planning (ERP) applications will reach $31 billion by 2006, up from $21 billion in 2002. The leading suppliers in the space, by total application revenue, include SAP, Oracle, Peoplesoft, J.D. Edwards and the Sage Group.
Overall, the core enterprise resource planning (ERP) market for manufacturing and financial modules has slowed, according to the consultancy, with the majority of growth resulting from strategic extensions such as supply chain, customer management and product lifecycle management. The lower and mid-market has slowed, while the services and government industries remain healthy.
The customer relationship management (CRM) market has stalled compared to the past years of rapid growth. AMR is forecasting that the current CRM market will improve as it drives growth rates between 25 to 30 percent in the next few years, reaching $26 billion by 2006. Key areas of focus will be on B2B operations and the public sector.
Customer service, e-commerce, sales force automation (SFA), partner relationship management (PRM) and analytics will prove to be the fastest growth areas, AMR said. The consultants cited Siebel Systems, SAP, Peoplesoft, Oracle and Vignette as leaders in this space.
Meanwhile, the supply chain management (SCM) market continues to grow, though at a slower pace, and it is changing in makeup as many new players have emerged on the scene in the last two years. A shift in dollar spending is evident from planning to execution. Long-term, planning applications are expected to grow at 9 percent annually, while execution and fulfillment applications will grow much more rapidly at 26 percent annually. AMR sees the SCM market reaching $13.6 billion by 2006, up from an estimated $6.4 billion in 2002.
The ERP suppliers demonstrated healthy growth in supply chain application sales, and they lead in market share and revenue. These leaders, according to total application revenue, include i2 Technologies, SAP, Manugistics, IBS and Manhattan Associates.
On the infrastructure side, the analytics market has seen solid growth, with the leading suppliers making up 50 percent of the overall market. AMR sees the market continuing to transition from tools to solutions, with continued performance improvement. AMR found the integration/business process management market continued to experience consolidation as company budgets remained internally focused. The wireless supplier market also continues to experience supplier consolidation; user demand is still relatively small but growing, with 51 percent of companies increasing spending in 2002. Leading infrastructure providers include IBM, Oracle, Sybase and Microsoft.
AMR Research surveyed several hundred software suppliers and conducted an end-user survey during the first half of 2002 to evaluate and prepare market sizing and a forecast for each segment. Extensive review of business models and public financial records were also included in the overall analysis. Each supplier was measured on total revenue, product type, software revenue, application segments, regional market, and customer size. Additional methodology is included in the findings.
