Enterprise Asset Management Market to Grow

ARC report projects increase to $2.1 Billion by 2008

ARC report projects increase to $2.1 Billion by 2008

Dedham, MA  September 13, 2004  The worldwide market for enterprise asset management (EAM), including information technology (IT) assets, is currently $1.7 billion and is estimated to grow at the cumulative annual growth rate (CAGR) of 4.4 percent, reaching $2.1 billion in 2008, according to a new study by the ARC Advisory Group entitled "EAM/CMMS Solutions Worldwide Outlook."

"The majority of the EAM market growth will come from collaborative support solutions (CSS) and industrial IT Enterprise Asset Management (ITEAM) opportunities," said Houghton LeRoy, ARC Research director and the author of the study. "The EAM market has matured, causing a small decline in software license sales but compensated by an increase in customer service requirements."

Market maturity in North America and Europe has created many new opportunities for suppliers, LeRoy noted in the report. Customer service and support expectations have increased, requiring more consulting and continuous improvement services from suppliers. Emerging markets in Asia Pacific and Latin America are witnessing the importance and proven benefits of EAM/CMMS and ITEAM solutions in the mature markets. EAM software suppliers with a strong presence in global markets and a focus on collaborative asset lifecycle management (CALM) will continue to see an increase in sales, as customers adopt best practices and drive continuous improvement.

The report also said that companies that have derived good benefits from best practices, such as the CALM model, are expanding EAM functionality to other groups and facilities using collaborative support solutions (CSS) such as asset information and performance management (AIPM).

Companies with little or no payback justifications are looking for help establishing best practices, such as key performance indicators (KPIs), to measure ROI, according to the report. EAM suppliers or service providers often satisfy KPI requirements to help fulfill the ROI payback promised using CSS.

The report also stated that AIPM has become the fastest growing EAM solutions for CSS over the last couple of years as more companies adopt best practices to drive continuous improvements. Workforce reductions, limiting available IT resources along with cost constraints and a need for better collaboration, have forced many companies to consider application service provider (ASP) hosting as a reasonable alternative to managing in-house EAM solutions.

Electronic procurement remains important to many companies but it also requires significant content management to be effective, the report said. Most EAM/CMMS suppliers do not consider this costly effort a core competency and have outsourced eMRO to strategic partners, minimizing its EAM-related growth.