India, China and Brazil continue to invest in enterprise software


Worldwide enterprise software revenue is on pace to
surpass $267 billion in 2011, a 9.5 percent increase from 2010 revenue of $244
billion, according to Gartner.


The enterprise software market is projected for continued
growth in 2012, with revenue forecast to reach $288 billion.


Emerging countries such as Poland, India, China and
Brazil, which were less affected by the latest economic downturn than the U.S.
and Europe, are expected to continue to invest heavily in enterprise software
initiatives in the next few years as they build the IT infrastructures
necessary to do business on a global basis.


Enterprise software spending in North America is forecast
to reach $121.2 billion in 2011, up from 2010 revenue of $112.9 billion. The
market will experience consistent growth through 2015, when spending in North
America will surpass $158.1 billion. Gartner believes that oil prices and the
outcome of the federal budget deliberations are the largest threats to economic
stability in North America. However, current indicators are positive with
consumer and business spending on both equipment and software holding up.


With the extension of federal tax cuts including the tax
relief on capital equipment depreciation due to expire at the end of the year,
additional stimulus revenue could further boost enterprise spending on
technology and other capital goods. Enterprise software spending in Western
Europe is forecast to reach $78.3 billion in 2011, up from 2010 revenue of
$70.3 billion. The market will experience growth on a par with North America
through 2015.


“In Western Europe, enterprise software
spending could see slightly stronger growth in the latter half of 2011, but the
headwinds are getting stronger. The pace of growth in Europe is slowing, mostly
because of recent currency appreciation, fiscal tightening, higher commodity
prices and concerns about debt in countries such as Greece, Ireland, Portugal
and Spain. The result of these additional constraints on growth will exacerbate
some country growth trends in the region. However, countries on the upside of
this trend are Denmark, Finland, Germany, Norway, and Sweden,” said
Fabrizio Biscotti, research director Gartner.


The market for enterprise software continues to recover
well following the 2009 downturn, with signs of ongoing growth on the horizon.
Economic recovery is evident across all regions, although concerns have arisen
in some countries in Europe and Asia.


The earthquake and tsunami in Japan has created
additional marketplace uncertainty with a multiplicity of effects that are
beginning to be determined. GDP results and other research have pointed to a
2Q11 slowdown in demand with some recovery later in the year.


Enterprise infrastructure software spending is on
pace to a $153.3 billion total in 2011, a 9 percent increase from 2010 revenue
of $140.6 billion.


The market is led by the operating systems (OS) segment
in which revenue is projected to reach $32.6 billion in 2011, followed by
database management systems (DBMSs) revenue at $25.5 billion. Worldwide
enterprise application software spending is forecast to total $114.4 billion in
2011, a 10.2 percent increase from 2010 spending of $103.8 billion.


Enterprise resource planning (ERP) is the largest segment
within the enterprise application software market. ERP revenue is expected to
reach $23.3 billion, followed by office suites with $15.7 billion.


“With this latest research, we see short-term
currency uplift for U.S. dollar-denominated growth for the period of 2011-2012
and downward adjustments in GDP across all regions,” said Joanne Correia,
managing vice president at Gartner. 


“We have identified a strong correlation between GDP
growth and enterprise software spending growth, where software tends to grow 4
to 6 percent above GDP in normal market conditions. However, we do have
concerns about the rising cost of commodities, including oil, and its impact on
certain regional and country economies,” Correia added.


By Team

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