Regional enterprise software market poised for hot growth

Latest research on the Middle East and North African enterprise applications sector reveals a market destined for a successive year of double-digit expansion in 2006

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By  Published  October 31, 2006

Spend on enterprise application software (EAS) in the Middle East and North Africa (MENA) region is poised to grow 12.5% in 2006, potentially creating a market worth almost US$210m.

In 2005, the size of the region’s EAS sector expanded 16% to US$187m, according to figures just released by IDC.

Banks, manufacturers and oil and gas companies continue to be the primary investors in enterprise software, collectively accounting for 40% of EAS investment last year.

Vinay Nair, software analyst at IDC MEA, explained: “Although SMB organisations are now implementing EAS solutions and generating new demand, leading vendors are in a heated battle for clients.

The primary arena has been mainly the large enterprise and replacement market, but the price slashing and aggressive sales approach have spilled into the SMB segment, creating a buyer’s market despite the high demand.”

Saudi Arabia was the largest EAS market in 2005, followed by the UAE, and that trend looks set to continue this year.

Together, the GCC countries represented over 80% of EAS expenditure with Saudi and the UAE experiencing the fastest growth last year.

Both look set to repeat this feat over the next two years.

Naira added: “North Africa will be the most dynamic market in the medium term.

In terms of EAS and IT in general, it is still underdeveloped and there is a great deal of pentup demand.

Tapping it will require careful articulation of strategy and hands-on training for implementation partners,” he concluded.

Five vendors in particular continue to benefit from the increased expenditure and account for over 75% of EAS sales in MENA: SAP, Oracle, Microsoft Dynamics, 3i Infotech and Sage.

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