The overall enterprise applications market will reach US$70 billion in value by 2006, according to research published by AMR Research. In terms of market share, ERP suppliers will take some US$31 billion, with CRM suppliers taking US$26 billion and SCM suppliers taking US$13.6 billion.
The firm surveyed several hundred software vendors and conducted an end-user survey during the first half of 2002 to evaluate and prepare market sizing and forecasts. Business models and public financial records were also included in the overall analysis. Each vendor was measured on total revenue, product type, software revenue, application segments, regional market, and customer size.
ERP
Total revenues for companies that sell enterprise resource planning (ERP) applications are projected to reach US$31 billion by 2006 (up from US$21 billion in 2002). The leading vendors by total application revenue include: SAP, Oracle, Peoplesoft, J D Edwards and Sage. Overall, the core ERP market for manufacturing and financial modules has slowed, with the majority of growth resulting from strategic extensions such as supply chain, customer management, and product lifecycle management. The lower and mid-market has slowed while the services and government industries remain healthy.
CRM
According to AMR, the customer relationship management (CRM) market has stalled from its until-now rapid growth, and the firm predicts that it will improve with growth rates between 25% and 30% over the next few years, reaching US$26 billion by 2006. Key areas of focus will be on business-to-business (B2B) operations and the public sector. Customer service, e-commerce, sales force automation (SFA), partner relationship management (PRM), and analytics prove to be the fastest growth areas. Leaders in this space include Siebel Systems, SAP, Peoplesoft, Oracle and Vignette.
SCM
The supply chain management (SCM) market continues to grow, though at a slower pace, and is changing in make-up as many new players have emerged in the past two years. A shift in spending from planning to execution is also evident: Long-term planning applications are expected to grow at 9% annually, whilst execution and fulfilment applications will grow at 26% annually. AMR predicts that the SCM market will reach US$13.6 billion by 2006 (up from an estimated US$6.4 billion in 2002). The ERP vendors demonstrated healthy growth in supply chain application sales, and a lead in market share and revenue. The leaders according to total application revenue include i2 Technologies, SAP, Manugistics, IBS and Manhattan Associates. Major SCM vendors focus on quality as their most important message.
Enabling technologies
The analytics market has also seen solid growth, with the leading vendors making up half of the overall market, and AMR predicts that the market will continue to switch from tools to solutions. The integration/business process management market continues to consolidate as company budgets remain internally focused, and the wireless vendor market also continues to experience vendor consolidation. User demand is still relatively small but growing, with 51% of companies increasing their spend in 2002. Not surprisingly, the leading infrastructure providers include IBM, Oracle, Sybase and Microsoft.
"Our analysis reveals the return of bottom-line focused, pragmatic buyers and companies that demand real, measurable benefits from vendors before they invest," said Tony Friscia, CEO of AMR Research. "Those companies who fulfil a recognised need and prove ROI will be the future success stories."
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