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ERP to Top Enterprise App Spending in 2012

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Posted June 22, 2012 By Pedro Hernandez     Feedback

ERP software vendors take the lead as the enterprise app market is forecast to notch more revenues.

It's shaping up to be a good year for enterprise application makers according to a forecast released by Gartner. In 2012, the overall enterprise software market will reach $120.4 billion, a 4.5 percent increase over the $115.2 billion generated in 2011 says the research group.

These gains will materialize despite an uncertain economic climate, says Gartner research vice president Tom Eid. As businesses adapt, CIOs will adjust accordingly.

"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," informs Eid in a statement to the press.

Enterprise resource planning (ERP) software will lead the market this year with $24.9 billion in revenue, says Gartner. Productivity and office application suites are expected to follow with $16.4 billion.

BI and CRM Make a Splash

Gartner goes on to add fuel to two hot areas in the enterprise app space: business intelligence (BI) and customer relationship management (CRM). Both are poised to cross the $13 billion mark, says Gartner.

The BI market has been a hotbed of activity in recent weeks. At the recent Gartner BI Summit in Los Angeles, outfits like QuartetFS, HiQube and Pentaho showed off their latest tools that help businesses extract insights from their data with ever-increasing levels of sophistication, speed and ease.

When it comes to blockbuster deals, CRM steals the spotlight. Recently, the CRM market has been awash in major deal making as the discipline goes social.

Earlier this month, snapped up Buddy Media, a social marketing specialist, for $689 million. Last year, it took social CRM vendor Radian6 off the market for $326 million. Also this month, Oracle made a social CRM buy of its own when it scooped up Boulder, Colo.-based Collective Intellect for an undisclosed amount.

Cloudy Forecast

Changing software buying dynamics -- away from software megasuites, generally -- are tipping the scales in favor of software as a service (SaaS) providers. As a result, the enterprise software market forecast is looking increasingly cloudy, according to Gartner.

"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," observes Eid.

Gartner forecasts that SaaS and cloud-based services will experience steady growth over the next few years. Enterprise application spending on SaaS and cloud services will reach 16 percent by 2015 from 11 percent in 2010.

Stay up to date on all of the latest ERP news here.

Pedro Hernandez is a contributing editor at, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.

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