The Enterprise Software Market is forecast to reach $545m by 2025 and is estimated to grow at a CAGR of 6.15% during the forecast period 2019-2025. The growth of the market can be attributed to increased adoption of cloud-based services in small and medium-sized organizations. Small organizations are integrating cloud-based technology into their businesses to lower the upfront costs and access business-critical applications at the convenient time and place. The IT spending on enterprise software was increased at a rate of 9% during 2017-18, where most of these spending were specific to cloud-based enterprise technology. Companies are widely adopting cloud-based enterprise software to scale up businesses with minimum investment. Enterprise software increases efficiency and accelerates the overall productivity of an organization thus, witnessing faster adoption.
Enterprise Software Market Report Coverage
The report: “Enterprise Software Market – Forecast (2019-2025)”, by IndustryARC covers an in-depth analysis of the following segments of the Enterprise Software Market.
By Types: Enterprise Software, System Software, Microsoft Windows, iOS, Linux, Application Software, Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Business Intelligence (BI), Supply Chain Management (SCM), Software as a Service(SAS), Cloud Computing
By Development type: Proprietary Software, Outsourcing Software, Application Service Providers (ASP)
By Application: Supply Chain, Customer Information Management, Sales Accounting, Web Services, Energy Management, Government
Key Takeaways
Companies are widely adopting cloud-based enterprise software to scale up businesses with minimum CAPEX investment.
By 2019, approximately 75-80% of enterprises will deploy at least one enterprise computing application on the cloud.
The major players in this market are SAP AG, Oracle Corporation, Microsoft Corporation, Infor Inc., Kronos Incorporated, and IBM Corporation.
The growing number of hyper-scale data centers in the U.S. is the key driver of enterprise software market in the country.
Enterprise Software Market Segment Analysis - By Types
The Enterprise Software market is poised to grow at rapid pace owing to wide range of applications in supply chain and maintaining customer relationships. The worldwide supply chain management market grew by 13.9% in 2017 and reached $12.2 Billion (as per Forbes). Organizations are adopting cloud-based Supply Chain Management (SCM) solutions to enable new digitally-based business models in optimizing their supply chain and increase their profitability at a faster pace through cost reduction. Cloud-based SCM applications are designed to flex and scale according to the needs of globally distributed supplier networks, thus enabling organizations to be more responsive to market demands. The growth in these supply chain management Enterprise Software is driving the total Enterprise Software Market and the market is forecast to reach $545m by 2025 and is estimated to grow at a CAGR of 6.15% during the forecast period 2019-2025.
Enterprise Software Market Segment Analysis - By Geography
According to the U.S. Small Business Administration, there are 30.2 billion small and medium-sized businesses in the country, many of whom use enterprise software to reduce costs and complexity involved in internal technological systems. In 2019, the U.S. holds more than 60% of global cloud spending. Voluminous presence of hyper-scale data centers in the U.S. is the key factor to hold dominant market share for cloud-based technology. This leads to rising demand for cloud-based enterprise software in the U.S. and hence, the region contributes nearly 25% market share in the global enterprise software market.
Enterprise Software Market Drivers
Rise in the need for good customer experience:
Enterprise software helps in easing the customer relationship management processes, which enhances the customer experience and increases customer retention rate. According to the annual report by Facebook Inc., monthly active users (MAUs) of Facebook were 2.32 billion in December 31, 2018, an increase of 9% year-over-year and also the company recorded 37% increase in revenue during 2017-2018 showcasing the prolific rise in social media websites. The rise in digitization and emergence of social media marketing platforms have increased the need for enterprise software in recording and managing huge amounts of customer data for businesses. Moreover, for businesses, enterprise software eases the creation of personalized marketing content for the customers.
Emergence of E-Commerce across Sectors:
E-commerce websites minimize the lead time and establish direct business relationships with end customers across various sectors. According to a report published by Walmart, Flipkart group is showing significant growth, with its growth merchandise value increasing by 12 times from 2014 to 2018, reaching $7.5 Billion. Organizations require customized enterprise software to manage and analyze customer data, which further widens the scope for opportunities in the global enterprise software market.
Enterprise Software Market Challenges
High cost of deployment
Deployment of enterprise software requires significant cost, time, and expertise. Enterprise software adds high cost due to its long implementation processes which include project planning, organization, installation, training, and system configuration. In addition to deployment of ERP software, new hardware, updated network equipment, and security software installations may also be needed in the organization, which is likely to further add additional cost. Moreover, additional cost such as employee training, recruitment of skilled employee, and maintenance is expected to increase the initial deployment cost of enterprise software, which may hinder the market growth during forecast period 2019-2025.
Market Landscape
The major players in this market are SAP AG, Oracle Corporation, Microsoft Corporation, Infor Inc., Kronos Incorporated, and IBM Corporation. These companies have been continuously focusing on R&D for enterprise software, both towards addressing security concerns and integration of cloud services for quick processing and analysis of data.
Partnerships/Mergers/Acquisitions
In 2018, IBM Corporation partnered with Salesforce in order to integrate their artificial intelligence (AI) platform and deliver an enhanced customer service experience. Salesforce’s in-house AI platform called Einstein and IBM’s cognitive computing technology platform Watson will collaborate to deliver AI-driven recommendations for future actions by companies.
R&D Investments/Funding
In 2018, Cohesity, a hyper-converged secondary storage company, announced that it had raised $250m in an oversubscribed Series D funding round led by the SoftBank Vision Fund with strong participation from strategic investors like Cisco Investments, Hewlett Packard Enterprise (HPE), and Morgan Stanley Expansion Capital, along with Sequoia Capital and others. This investment is anticipated to increase the enterprise software development activities towards achieving increased operational efficiency and cost reduction, which in turn will drive revenue growth for end users. Additionally, there has been significant growth in R&D investments into enterprise software in the European region. For instance, in 2018, Dassault Systèmes SE recorded a total expenditure of $337.72m into R&D, which corresponds to 24.6% of their software revenue. This is anticipated to continue in the future, increasing the likeliness of development of effective enterprise software products which can store, analyze, and visualize large amounts of data faster and more securely.
Enterprise Software Market Research Scope:
The base year of the study is 2018, with forecast done up to 2025. The study presents a thorough analysis of the competitive landscape, taking into account the market shares of the leading companies. It also provides information on unit shipments. These provide the key market participants with the necessary business intelligence and help them understand the future of the Enterprise Software Market. The assessment includes the forecast, an overview of the competitive structure, the market shares of the competitors, as well as the market trends, market demands, market drivers, market challenges, and product analysis. The market drivers and restraints have been assessed to fathom their impact over the forecast period. This report further identifies the key opportunities for growth while also detailing the key challenges and possible threats. The key areas of focus include the types of Enterprise Software Market, and their specific applications in the consumer electronics, industrial, medical, and security and surveillance sectors.
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