Enterprise software markets recovering says Gartner

Return to growth in worldwide enterprise software markets, but ME may be slower to respond

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Enterprise software markets recovering says Gartner Gartner expects worldwide enterprise software revenue to reach $297 billion by 2014.
By  Mark Sutton Published  September 20, 2010

The worldwide enterprise software market is on track for recovery, according to analyst company Gartner, although the Middle East region could take longer to respond.

Worldwide enterprise software revenue is due to reach $232 billion in 2010, up 4.5% from $222.4 billion in 2009. The market is expected to reach $246.6 billion next year, with compound annual growth rate of 6% to reach $297 billion by 2014.

Joanne Correia, managing vice president at Gartner commented: "After declining 2.6% in 2009, the worldwide market for enterprise software is recovering well with signs of continuing growth on the horizon. Aging systems, as well as greater demand for security and aligning software with business requirements, are key decision factors for end users increasing their spending within the infrastructure software market."

Enterprise software markets are showing pronounced variation in growth rates, Gartner reports, with markets such as the US and Western Europe lagging behind emerging markets that are growing by up to 11.5% CAGR. The North American market is predicted to go from $110.8 billion in 2010, an 8.5 percent increase from 2009, to $143.6 billion in 2014.

In the Europe, Middle East and Africa (EMEA) region, the market is expected to decline slightly from 2009 to 2010, down 3.4% to $66.8 billion, although the market is expected to hit $76.2 billion in the next five years. Growth in markets such as Eastern Europe, were much stronger than those in Western Europe.

For the MEA region, which makes up around 6% of the overall EMEA enterprise software market, the fastest growing segments in 2010 are set to be virtualization, security, web conferencing and team collaboration and business intelligence.

Fabrizio Biscotti research director for the enterprise software team within the Technology & Service Provider Research organization warned that growth would be slower in Middle East markets that had a strong reliance on oil exports.

“Traditionally the MEA region has been one of the fastest growing IT markets on the back of rapid economic expansion. However, the financial crisis of 2009 that has hit in particular some key IT hubs in the Gulf, has left its scares and recovery is set to occur only at a moderate pace,” he said.

“Several of the oil producing countries have a direct link between their IT spending ability and the inflow of money coming from oil exports. The slow world recovery is impacting the energy exports and therefore it is slowing down the ability to invest in IT. Although this is not the main reason and specific trends can be seen country by country, overall, software spending in the Middle East has more obstacles than in previous years,” Biscotti added.

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