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Current advancement in enterprise application industry - opportunities and challenges

(Image credit: Image Credit: Syda Productions / Shutterstock)

Technological advancements and digitisation is setting high goals for the enterprise application market, which is expected to hit a revenue of USD 287.7 billion by 2024, as per Global Market Insights, Inc (opens in new tab). Enterprise application is a highly complex system deployed across corporate bodies to ensure real- time information flow along with smooth business operations. Growing demand for efficient IT infrastructure, rising internet connectivity, rapid adoption of cloud computing technologies, and growth in smartphones and mobile devices are the vital factors influencing the enterprise application market share worldwide.

Increasing preference for remote access and emergence of smartphones is anticipated to surge data & VAS usage and in turn facilitate industry demand. Furthermore, availability of multi-functional as well as cost-effective products is anticipated to positively impact revenue. Rising consumer preference for multimedia devices coupled with growth in mobile devices is expected to propel demand. Multimedia-enabled devices provide more features with more data security over the Internet. Availability of open source solutions may hinder growth. In addition, it may act as a substitute to applications involving high maintenance and implementation costs. Furthermore, extra staffing requirement is likely to pose a challenge to industry participants.

Availability of an open source application in many enterprises and high implementation and maintenance cost is likely to hinder the enterprise application market growth in the forecast time span. Moreover, the requirement of more staff will pose a challenge to the industry growth. International software vendors such as Oracle, Microsoft, and SAP charge more as compared to domestic software vendors. This will pose a threat to the enterprise application market growth in the forecast time frame.

Cloud enterprise application is an emerging trend that is likely to gain prominence in the industry in coming years owing to increased accessibility and low technology infrastructure costs. Moreover, enhanced internet infrastructure is projected to propel the adoption of cloud-based solutions. Rising competition among various industries such as retail and manufacturing coupled with increased focus toward expenditure optimisation is anticipated to induce immense potential to the enterprise application market.

North America enterprise application market is predicted to dominate the industry with 30 per cent of the revenue in the forecast timeline. It can be attributed to organisations’ increasing customer centric approach and dynamic structure. Rising focus toward the reduction of operational costs will further fuel the regional growth. Asia Pacific is expected to grow at a CAGR of 9.5 per cent and will account for USD 75 billion during the forecast time frame. Moreover, the development of innovative devices and increasing technological advancements will propel the growth of the enterprise application market in the region.

Asia Pacific which is one of the most prominent markets in terms growth prospects is largely influenced by growing adoption of cloud-based solutions in small as well as large-scale companies across this region. China is gaining a prominence in the APAC market owing to the presence of some of the technologically equipped renowned market players such as Huawei and Xiaomi. Asia pacific enterprise application industry is forecast to grow stupendously at a CAGR of 9.5 per cent over 2016-2024, with an estimated revenue of USD 75 billion by 2024.

Enterprise application market is segmented into product, deployment and end-use

Product is segmented into CRM, ERP, SCM, Web Conferencing, Business Intelligence, BPM, CMS, EAM. Customer relationship management (CRM) is projected to dominate the enterprise application market with a 25 per cent market share. It is attributed to the rising consumer awareness regarding customer engagement. ERP segment is anticipated to witness an exponential growth and grow at above 8 per cent CAGR in the forecast time span. This growth is attributed to the rising need for real-time flow of information and need for back office automation. Features such as capability of converting unstructured data into structured is likely to aid in easy website content management and in turn drive growth. Benefits offered such as up-selling and cross-selling opportunities, customer behavior insights and improved efficiency is likely to drive the business intelligence market over the forecast period.

Deployment is classified into On-Premise, Cloud. A cloud-based enterprise application is expected to dominate the industry over the forecast time span owing to its features such as disaster recovery, high accessibility, less capital involvement, and effective project monitoring. The on-premise segment is projected to witness a considerable growth rate due to rising adoption of these solutions on company’s on-premise computers.

These solutions help companies in connecting every process and enable smooth flow of information across different departments. In addition, they are helps in converting unstructured data into actionable information. For instance, various companies use CMS to upload and manage website content. It is likely to witness rapid adoption owing to efficient content lifecycle management and ease of use.

End-Use is segmented into Manufacturing, BFSI, Healthcare, Retail, Government, Aerospace & Defence, Telecom & IT. Healthcare is expected to grow at 8.5 per cent CAGR during the forecast time frame. This growth can be attributed to the increasing need for data transparency. Enterprise application solutions for healthcare handle digitised data from various sources. Moreover, software vendors that include Oracle, SAP, Infor, and few others provide the solutions that enhance cost-efficiency, patient safety, and the overall performance. The retail sector is anticipated to showcase an exponential growth rate during the forecast timeline owing to rapid implementation of these solutions for enhancement of the customer experience and value proposition.

It is debatable as to which software is more profitable for organisations, and implementation decision is based on customer requirements. For instance, cost saving through open source software implementation may not offset the implementation time and extra staffing.

Microsoft, SAP, Oracle, IBM, Infor, Epicor Software, IFS, and HP are a few prominent vendors in the enterprise application market. Industry players are making heavy investments to set their foothold in this field. For instance, in 2014, IBM invested over USD 8 billion for the acquisition of 18 companies providing cloud-based solutions to enhance its technological capability and offerings.

Shikha Sinha, contributor
Image Credit: Syda Productions / Shutterstock

Shikha Sinha is also an active contributor on a variety of business & media portals providing insights across industries. Shikha has been working in the market research domain for quite a while.