As ERM Application Software Licenses to Large-Sized Companies Decline, Companies Make Inroads Into the Market For Small and Medium-Sized Companies, Says IDC Latin America

MIAMI, FL – OCTOBER 16, 2002 – According to a just-released report by IDC Latin America, 2001 revenues for ERM licenses, maintenance and upgrades in Latin America were approximately $417 million due to the fragile environment affected by the increasing economic and political instability. The markets in Argentina, Colombia and Venezuela have been greatly affected and in 2002, for example, the ERM market in Argentina is expected to decline by more than 50 percent as a result of the recent economic crisis.

 

As the demand for new ERM software applications plateaus among large-sized companies, vendors in Latin America will reevaluate their strategies to target small and medium-sized companies and change the way they sell their solutions by having a more cost-effective distribution and reduced complexity and implementation time.

"In the ERM application software market, most vendors relied on recurring revenues from maintenance and upgrade contracts as new licenses to large-sized companies declined," said Patrick Shearer, analyst at IDC Latin America and author of Latin America ERM Software Forecast and Analysis, 2001-2006. "Several of the major vendors have launched worldwide SMB (Small and Medium Business) initiatives in order to get new customers when they are small and grow with them."

As in 2000, SAP has held the leading position among ERM software vendors in 2001. Even though sales of new licenses to SAP's traditional large-size client base has fallen, the firm continues to receive significant maintenance and upgrade revenues from these clients and is one of the companies leading the trend by making inroads into the market for medium-sized companies.

IDC Latin America forecasts that the market will grow to over $ 580 million by 2006 by a compound growth rate of approximately 7 percent as sales of new licenses will go primarily to small and medium-sized companies, while large companies spend more on maintenance and upgrade revenue.

The Latin America ERM Software Forecast and Analysis, 2001-2006 report series provides a qualitative insight into the overall Latin America ERM market with an analysis and forecast covering the six largest software markets in Latin America. It presents 2001 market size and share data in terms of initial license revenue and maintenance/upgrade revenue as well as a five-year ERM software market forecast by country. The report also provides a detailed Excel-based spreadsheet tool containing market information and complete vendor segmentation by country, software module, industry and company size. For more information regarding the study, Latin America ERM Software Forecast and Analysis, 2001-2006 #LA12451J or to purchase the complete study, please contact Barbie Cordero of IDC Latin America bcordero@idc.com or at (305) 351-3131.

About IDC Latin America

IDC Latin America has established an unrivaled reputation for analysis of the IT, Internet, and Telecom markets in Latin America. Its research group is comprised of over 90 analysts in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela who are devoted to generating the most authentic and up-to-date information on these markets. Following a commitment to excellence, IDC has pioneered primary research in the countries of Costa Rica, Dominican Republic, Ecuador, Guatemala, Panama, Peru, and Puerto Rico. This distinctive local presence results in the most comprehensive and trustworthy market coverage of the Latin American region. For more information, visit www.idclatin.com or call 305-351-3131.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.