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Pent-up demand for Business Applications from Small and Medium Businesses to Drive Investment, Says IDC

  • 17 May, 2004 09:30

<p>NORTH SYDNEY, 17th May 2004 – In a new study released today titled “Australian Enterprise Applications Software 2004-2008 Forecast”, IDC estimated the Australian Enterprise Applications market was valued at A$574.9 million in 2003. IDC anticipates that the improved economic conditions will propel the market to achieve a 9.1% rise to A$632.2 million by the end of 2004. In addition, a number of end-user surveys conducted by IDC indicates an uplift of applications spending over the next few years. By 2008, the enterprise applications market is projected to reach A$840.7 million, a 7.9% CAGR through the forecast period from 2003 to 2008.</p>
<p>IDC attributes the following factors will determine the beginning of continuing growth rates in the enterprise applications market in Australia for the forecast period, 2003 to 2008:
* Growing evidence of a global economic rebound will translate into additional enterprise applications spending by corporations that want to bolster productivity and gain competitiveness;
* Consolidation among enterprise applications vendors will usher in a stronger set of players that possess the economies of scale and the breadth of product offerings to meet customer needs across multiple industries and regions; and
* Upgrade and replacement cycles among enterprise applications customers appear to be accelerating based on newly released end-user survey data as well as a confluence of factors including the explosion of broadband users, relentless drive for better productivity by corporations, demand for customer service improvement through advanced software and also the move to embrace wireless and mobility solutions.</p>
<p>IDC's study also revealed that as the demand from the enterprise market has softened, vendors have responded by making available ''lite'' versions of their applications to attract customers from the mid-market. This trend will continue into 2004 and is very relevant to Australia because of the high proportion of mid-market customers in comparison to large enterprises in the local market. These mid-market customers are looking for easy to deploy, low TCO products that enable them to create an advantage over their closest competitors. This also means that systems integrators and solution partners of independent software vendors (ISVs) will increasingly be seeking ways to develop packaged services for these types of customers. The key areas for application vendors and system integrators will be in relation to price, demonstrable return on investment, low total cost of ownership, functionality, the use of open standards and ease of implementation.</p>
<p>“Moving on from these general requirements on the part of the vendor, system integrators alongside ISVs will play an increasingly important role as hosted solutions starts to emerge in Australia. This will change the nature of implementation and integration services in the long term and will allow vendors the opportunity to shield the complexity of systems from customers. End-users will continue to look for a number of things as the market moves forward. Gone are the days that companies felt that they needed to deploy best-of-breed standalone applications to remain competitive. Companies now look for integrated, end-to-end solutions that are easily deployed. As such integrated solutions that are aligned to more than one business process will be in demand” says Bharati Poorabia, Senior Analyst, Enterprise Applications at IDC Australia.</p>
<p>To purchase this document, please call the IDC sales team on (6-12) 9925-5300 or email gclarke@idc.com.</p>
<p>For press enquiries please contact:
Bharati Poorabia
IDC Senior Analyst, Enterprise Applications
Email: bpoorabia@idc.com
Phone: 61 2 9925 2257</p>

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