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August 28, 2015

Enterprise application software market to hit $200bn by 2019

Modernisation, functional expansion and digital transformation projects touted as future growth drivers.

By CBR Staff Writer

Global spending on enterprise application software is set to break the $200bn mark by 2019, driven primarily by modernisation, functional expansion and digital transformation projects.

Gartner expects that the worldwide enterprise application software market will increase by 7.5% annually to hit $150bn in 2015 and rise to over $201bn by 2019.

Marketing, e-commerce and advanced analytics software will be the market sub-segments demonstrating the biggest growth.

The research firm highlighted several key areas of change in the market, including transitioning to subscription-based models, modernisation of core enterprise applications and the rise of digital business-related market dynamics.

By 2019, 28% of global installed human capital management systems will be SaaS-based, up from 13% in 2014.

Gartner expects that by 2020, 75% of application purchases supporting digital business will be "build," not "buy".

Cloud is also set to hit a tipping point, with 60% of businesses set up for the technology by 2020.

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By 2020, 75% of businesses are expected to use advanced analytics, as the shift changes from measurement to analysis and optimisation.

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

"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."

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