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IDC sees demand for enterprise apps to rise

Veronica C. Silva | Feb. 8, 2012
Technology trends, regulations and compliance are boosting the demand; but global economic doubts may be a threat to further growth.

The good news is that an analyst firm has noted a growing demand for investments in enterprise applications. Unfortunately, this demand may be hampered by global economic uncertainties.

Analyst firm IDC Asia Pacific has noted an 18.6 percent growth in the enterprise applications software market in the first half of 2011 compared to the same period last year. The growth, which was noted for the AP region except Japan (APEJ), was prompted by the interest of enterprises to grow their business.

This growth, however, may not be sustainable as the threat of a double-dip recessions looms, the company said. Because of this uncertainty, IDC is forecasting a compound annual growth rate (CAGR) of 10.2 percent till 2015 to reach US$8 billion.

"Although the need to extend newer functionalities and capabilities to end-users, which in turn help in improving internal efficiencies and reducing operating cost, has been driving growth over the last 18 months or so, companies will take a cautious approach on software investments in 2012 due to the negative economic scenario," said Sabharinath Bala, research manager, IDC Asia/Pacific Enterprise Applications Software Research Group.

Other growth factors

Examples of the enterprise application software include enterprise resource management (ERM), customer relationship management (CRM) and supply chain management applications.

Despite these global economic threats, there are other factors that are boosting the demand for enterprise software. IDC noted that new technology trends, such as cloud computing and analytics, and regulatory and compliance requirements are compelling companies to invest in enterprise applications. This has prompted vendors to create some vertical enterprise apps, IDC said.

Among the enterprise applications, the ERM market grew albeit slightly in the first half of 2011 - 52.1 percent against 51.6 percent during the same period last year. The IDC press statement also noted "slight decline" for product supply chain (PSC) applications and flat growth for CRM applications but didn't provide specific figures.

The APEJ countries included in this Semiannual Enterprise Applications Tracker include Australia, New Zealand, South Korea, India, China, Taiwan, Hong Kong, Singapore, Malaysia, and Thailand.

 

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