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Technology: Enterprise Software market Perks Up in 2010
The enterprise Software market is bucking the trend of a tough economy and is seeing growth this year with more on the horizon. Gartner is predicting fairly strong growth in the area of application and infrastructure software. They are predicting that the enterprise software market will grow 8.5 percent in North America this year, reaching a total of $110.8 billion. By 2014 that number should reach $143 billion. Globally, the enterprise software market is coming in at $232 billion for the year for a less robust growth rate of 4.5 percent.
Asia Pacific and Latin America have been less affected by the downturn and continue to invest strongly in enterprise software. Europe and the Middle East, on the other hand, are scaling back their software investments.
Joanne Correia, vice president at Gartner, said “After declining 2.6 percent 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. “
Colleen Graham, research director at Gartner, said that “These earnings were driven primarily by pent-up software demand, and with that demand having been mostly satisfied, somewhat slower growth is expected for the latter half of 2010. A loss of momentum and general economic weakness will drive some organizations to exercise caution in end-of-year software purchases.”
It’s good that the software business is picking up, but it would be interesting to know how much of the business is really new? Gartner doesn’t break down the source of the revenues into “new business” and “recurring maintenance, add-ons or upgrades”. Most likely, a large chunk of it is the latter, rather than new business being signed up.
