IDC Pegs the North American Packaged Application Software Market at Almost $160 Billion in 2004

FRAMINGHAM, MA – MARCH 19, 2001 – By 2004, the North American commercial packaged application software market will be valued at $158.8 billion – twice as much as its 1999 value. The cross-industry applications – enterprise resource management (ERM), customer relationship management (CRM), and office and collaborative software – will account for more than $30 billion of the market. According to IDC, vendor opportunity will vary widely by industry.


"Vendor opportunity is clearly influenced by a variety of factors affecting a particular vertical market," said Anna Toncheva, analyst for IDC's Corporate Computing Vertical Views research program. "For example, the financial industry's transition to a more advice-centered, full-service, virtualized business model is significantly impacting its software investment. Within the telecommunications and utilities sectors, software investment is being affected by customer requirements, regulation and deregulation, and merger and acquisition activity."

IDC expects the manufacturing industry to continue to spend the most on packaged software applications through 2004. Its spending on ERM is particularly strong. IDC forecasts manufacturing will account for approximately one-third of ERM revenues through 2004.

The infrastructure and finance sectors spend more than other industries on CRM applications. In 2004, infrastructure industries, including telecommunications, broadcast communications, transportation, and utilities, will account for $1.9 billion of CRM revenues, or 24.6% of the market. Finance, meanwhile, will account for 23.5% of CRM software applications, with $1.8 billion.

Within the office and collaborative software application market, commercial markets with lucrative opportunities include midsized process manufacturing, banking, insurance, and mining companies.

"Overall, the outlook for packaged application software market is positive," Toncheva said. "Even industries that are typically IT laggards, such as agriculture and construction, are ripe for solutions addressing their particular niche requirements."

IDC's report Software Vendor's Guide to Vertical Markets in North America, 1999-2004, Part 1: Applications (IDC #B23517) provides a detailed view of the application software revenue by vertical market in North America. The report analyzes vertical market and company size class opportunity in four specific application software markets: ERM, CRM, office and collaborative, and industry-specific applications. Data is presented from 1999 to 2004 for 20 vertical markets and three company sizes. To purchase this report, contact Cheryl Toffel at 1-800-343-4952, extension 4389, or email

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

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


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