EAS Revenue Will Pass $1 Billion Mark in Central and Eastern Europe by 2007, Says IDC

PRAGUE, CZ – JUNE 12, 2006 – The markets for enterprise application suites (EAS) in Central and Eastern Europe are hot. According to IDC data, 2005 was another banner year for EAS investments in the region. IDC expects license and maintenance revenue to continue to rise by an annual average of more than 18% through 2009, with annual value passing the $1 billion mark in 2007.

"It's an exciting time to be in the markets," said Tom Vavra, research director, Software, IDC CEMA. "The combination of newly opened borders and increased foreign investment in everything from banks and telecommunications providers to manufacturers and retail outlets is spurring activity that requires effective IT and management tools, like EAS."

Russia is both the largest EAS market in the region and the fastest growing. With L&M revenue hitting almost a quarter billion dollars in 2005, the country accounts for nearly 37% of the total EAS market in CEE. The surge in oil prices and the increasing purchasing power of the citizenry has set the economy ablaze, making capital available for both large companies and SMEs looking to install or upgrade EAS systems.

"Although the central government put a hold on a number of EAS projects last year, anticipated administrative reforms should lead to noteworthy IT investments, making the government the nation's fastest growing vertical sector for the foreseeable future, though it is starting from a relatively small base," said Vavra.

Poland is the second largest country market in terms of license and management (L&M) revenue. The open borders and increased investments brought by EU accession proved to be a boon to the country, with a variety of funding and incentive programs encouraging increased investment in IT.

Small and medium-sized businesses in particular have benefited, acquiring EAS systems as part of IT development plans designed to increase competitiveness.

"In Poland, more than 40% of all EAS customers are small businesses and about 38% are medium-sized," said Vavra, "and this is where we will see the most future growth. This doesn't necessarily mean these segments are the most lucrative. Very large businesses account for about 4% of EAS customers but nearly a quarter of revenue, meaning providers still need to maintain the right balance of accounts to fully tap the country's potential."

Other hot markets include Romania, Slovakia, and Ukraine. IDC expects L&M revenue in all three countries to rise by an annual average of 17% to 20%, with liberalization and privatization the primary forces encouraging investment, development, and overall economic growth.

"We can't let these figures pull our attention from the region's more mature markets," said Vavra. "Even where revenue is growing the slowest, it is still growing at a rate that would make Western European countries blush. For instance, EAS has been around for years in the Czech Republic and Slovenia, but L&M revenue will still increase at an annual average of around 11% through 2009. That's substantial. The two countries are simply bordering markets that are growing faster."

IDC's EAS Report Series for Central and Eastern Europe includes individual, in-depth studies on Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Slovenia, and Ukraine. Each study provides a detailed overview of the given market for high-end integrated EAS packaged software products, as well as detailed qualitative and quantitative information, analysis, and forecasts. Each study also delineates the defining characteristics of the EAS markets, shows which segments are investing in EAS solutions, and notes how future spending will affect market development. Also covered are the primary EAS operating environments, how sales affect third-party hardware and software vendors, and how vendors across the IT spectrum (hardware platform vendors, database vendors, operating system vendors, and enterprise application vendors) can capitalize on the continued expansion. In addition to noting the impact of political and economic conditions, each study tracks and analyzes leading players.

For more information about IDC research covering EAS and software markets in Central and Eastern Europe, visit http://www.idc.com/getdoc.jsp?containerId=IDC_P2261 or contact Tatiana Hinova at +420 221 423 140, thinova@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting http://www.idc.com .