IDC Forecasts Packaged Software Revenue in North America Will Increase Twofold

FRAMINGHAM,MA – MARCH 16, 2001 – The stage is set for packaged software revenue in North America to continue its solid performance. According to IDC, vendor license and maintenance revenues will increase more than twofold, from $77 billion in 1999 to $159 billion in 2004. The distribution of this revenue will vary across several dimensions.

 

"Growth opportunities exist in nearly all sectors of the economy," said Anna Toncheva, analyst for IDC's Software and Systems Vertical Views program. "However, an intensive deregulatory environment, cross-industry convergence with new niche and multiple-growth platforms, and pervasive technology requirements are fueling the infrastructure sector of the economy as the fastest-growing packaged software revenue source."

IDC segments the overall software market into three primary categories: applications software, systems infrastructure, and application development and deployment software. While applications software will command the greatest share of revenue in 2004 at 36%, application development and deployment tools will drive the overall market. "Historical deficiencies of specialized solutions for complex and regulated environments necessitate companies’ continued investments in tools for customizing and extending legacy applications to the Web," Toncheva said.

According to IDC, the mature manufacturing sector will continue to account for a tremendous portion of packaged software revenue in 2004, with a 23% share. However, its growth is slowing below the market average. Conversely, the services component of the U.S. software market is expanding its rate of software consumption. The advent of automation and the rising Internet economy will shift product channel dynamics, creating opportunities in the wholesale and retail segment as well.

IDC believes the important new drivers of packaged software growth for businesses of all sizes include the new functionality of the applications, the growth in the number of casual users interfacing with applications for electronic commerce, and users’ desire to upgrade legacy applications.

IDC's recently published bulletin, Packaged Software Revenue Forecast and Analysis by Vertical Markets in North America, 1999-2004 (IDC #B23891), analyzes the packaged software market in North America from a market segmentation perspective. It explains how revenue is currently distributed and will be distributed during the forecast period by vertical market and within vertical market by company revenue size segment. To purchase this bulletin, contact Cheryl Toffel at 1-800-343-4952, extension 4389, or email her at ctoffel@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 700 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

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

 

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