Worldwide Enterprise Resource Management Application Market Will Approach $25 Billion in 2004, According to IDC

FRAMINGHAM, MA – JULY 13,2000 – IDC is forecasting the worldwide enterprise resource management (ERM) application market will increase its revenues at a compound annual growth rate (CAGR) of 11.4% from $14.5 billion in 1999 to $24.8 billion in 2004. This market will be fueled by organizations that want to reduce the task of integrating, operating, and maintaining multiple standalone applications – especially midsize companies.

 

"The rapid creation of smaller companies, driven by the Internet economy, will continue to drive growth of ERM revenues," said Andrew Goloboy, research manager for IDC's Enterprise Resource Management Applications program. "Software suppliers and business consultants will contribute to growth in this

segment by simplifying ERM implementations through the adoption of templates and rapid implementation methodologies."

According to IDC, North America will account for more than half of the market's revenues throughout the forecast. However, it will be the slowest-growing region, increasing at a CAGR of 10.1%. The rest of world region, which includes the Middle East and Eastern Europe, will be the fastest-growing region of the world. Its revenues will increase at a CAGR of 18.3%.

The ERM market includes accounting, human resource management and payroll, and materials management applications. Accounting is and will remain the largest segment. However, with a CAGR of 9%, it will grow slower than the overall market. Its revenues will increase from $6.4 billion in 1999 to $9.8 billion in 2004.

Materials management applications will be the fastest-growing market. Its revenues will expand at a CAGR of 17.3%, almost twice as fast as the overall market. From $3.6 billion in 1999, this market will more than double to $8 billion by 2004.

"The Internet and ecommerce will be the growth engine for the materials management software market for a number of years to come," Goloboy said. "The multitude of new Internet companies involved in business-to-business and business-to-consumer sales has heated up demand for sophisticated new order fulfillment software. Customers have little tolerance for delays and mistakes, and consequently, order management is receiving much greater visibility throughout the supply and demand chain."

Human resource management and payroll applications will be the slowest- growing segment. Its revenues will increase at a CAGR of 7% from $2.6 billion in 1999 to $3.7 billion in 2004. Application service providers' delivery of HR applications will temper revenue growth in this segment by shifting

customers away from lump-sum, upfront licensing payments and toward predictable, recurring revenue streams. Growth in the midrange market will be enhanced by Web-enabled applications.

Enterprise Resource Management Market Forecast and Analysis, 2000-2004 (IDC #B22326) analyzes the overall market as well as individual market segments, including accounting, human resources management and payroll software, and materials management. The report forecasts revenues in each market through 2004, segmented by operating environment, geography, and vendor class The report also compares vendors' 1999 revenues and market shares in each segment.

For each segment, 1999 market performance is thoroughly discussed, and trends affecting market growth are analyzed. To purchase the report, contact Cheryl Toffel at 1-800-343-4952, ext. 4389 or 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 500 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.