Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Gartner: Digital Transformation will fuel 12.2% surge in Malaysia's 2015 enterprise app spend

AvantiKumar | Sept. 18, 2015
Gartner's Bianca Granetto said modernisation projects mean that the Enterprise App market will reach RM1.6 billion (US$370) in 2015.

Bianca Granetto, Research Director, Gartner 

Photo - Bianca Granetto, Research Director at Gartner.


Research firm Gartner said modernisation and digital transformation projects in Malaysia means that the Enterprise Application Software market will reach RM1.6 billion (US$370) in 2015, a growth of 12.2 percent.

Similarly, worldwide spending is to increase 7.5 percent to reach US$149.9 billion in 2015, increasing to more than US$201 billion in 2019, said Bianca Granetto, research director at Gartner.

"The majority of spending is going towards modernizing, functionally expanding or substituting long-standing business and office applications with cloud-based software-as-a-service," said Granetto.

 "Projects have been approved and budgeted for, often over a multiyear period, meaning the pace of spending and adoption isn't subject to any impending urgency," she said.
Granetto said the market sub segments showing the highest growth during the forecast period of 2014 through 2019 will be marketing, e-commerce and advanced analytics software.
She said Gartner has identified a number of key trends in the application software market that affect the spending forecast such as:
Modernisation of core enterprise applications
In a recent Gartner survey, 45 percent of respondents with knowledge of their organisation's software strategy showed that one of the current top five IT project priorities is "application modernisation of installed on-premises core enterprise applications" and a further 41 percent indicated that "extending capabilities of core enterprise applications" is a top five priority.
Transitioning to new consumption models
As subscription-based alternatives and particularly software as a service (SaaS) are being adopted by organisations, a more predictable revenue pattern will emerge.

The rise of Digital-business-related market dynamics
Competing successfully in the digital industrial economy is rapidly becoming a leading strategic imperative for businesses all around the world. This shift in business priority and focus brings a new perspective regarding applications, said Granetto.

In addition, organisations will extend or replace Human Capital management systems with SaaS, she said, adding that Gartner predicts that by 2019, about 28 percent of installed human capital management systems globally will be SaaS-based, up from 13 percent in 2014. The inflection point globally will occur over the next five years as organisations replace their current systems or extend their current systems with SaaS-based solutions.

Application purchases will increasingly be 'Build, not Buy'
Gartner predicts that by 2020, 75 percent of application purchases supporting digital business will be "build," not "buy."

Reaching the Cloud Office tipping point
Gartner estimates that during 2015, 15 percent of business users are provisioned, in whole or in part, with office system capabilities from the cloud. Gartner expects this percentage to grow to around 60 percent by 2020.

Advanced analytics adoption to grow
Gartner predicts that by 2020, more than 75 percent of organisations will deploy advanced analytics as part of a platform or analytics application to improve business decision-making.

Customer relationship management continues shift to the Cloud
In North America, adoption of CRM via the cloud has become commonplace with organisations increasingly utilising a hybrid model of on-premises and cloud products. However, SaaS adoption in some emerging regions is heavily constrained by network and data centre infrastructure, government regulations on customer data moving across borders, and the lack of local-language SaaS/cloud offerings.


Sign up for Computerworld eNewsletters.