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June 24, 2012

Global enterprise application software spending to grow at 4.5% in 2012: Gartner

ERP is the largest market with revenue projected to reach $24.9bn in 2012, followed by office suites at $16.5bn

By CBR Staff Writer

Global spending on enterprise application software is expected to see a 4.5% increase to $120.4bn in 2012 from $115.2bn in 2011, according to Gartner which has adjusted its forecast downward from 5% in the earlier prediction in the first quarter of the year (1Q12).

Gartner research vice president Tom Eid said the global marketplace is still experiencing a series of conflicting and contrasting economic news reports, and the full impact of the economic uncertainty on the enterprise software markets may not be readily assessable until the end of the first half of 2012.

"Spending in 2012 is anticipated to focus on industry-specific applications; upgrades to established, mission-critical software; integrating and securing established systems and infrastructure; and software as a service (SaaS) deployments representing extensions to, or replacement of, existing applications and new solutions," Tom added.

The major enterprise application software market segments in 2012 include business intelligence, content, communications and collaboration; customer relationship management, digital content creation, enterprise resource planning, office suites and personal productivity, project and portfolio management, and supply chain management.

Many organisations are demanding software functionality as a service, infrastructure as a service, platform as a service and SaaS or via cloud-based services rather than on-site software, resulting in vendors offering more technology as subscription-based or pay as you go" basis, Gartner said.

Gartner said more buyers are evaluating their options, and SaaS and cloud-based services are forecast to grow in usage, constituting 16% of enterprise application spending in 2015 from 11% in 2010.

"After more than a decade of SaaS and cloud service use, adoption continues to grow and evolve within the enterprise application markets. This is occurring as tighter capital budgets demand leaner alternatives, popularity and familiarity with the model increase, and interest in SaaS and cloud computing grows," said Eid.

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"Although use is expanding to a wider range of applications and solutions, the most widespread use is still characterized by horizontal applications with common processes, among distributed virtual workforce teams and within Web 2.0 initiatives."

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