The €6.4bn Western European ERP application market had a revival in 2006, with a seven per cent growth in license and maintenance, according to analyst house IDC.
‘Oracle's rebound in 2006 and solid performances of most of the top 10 vendors contributed to this recovery of the European ERP market. The improved economic conditions in the large economies in continental Europe also drove growth,’ said Bo Lykkegaard, programme manager of European Enterprise Applications and Services at IDC.
In 2006, the five largest ERP vendors in Western Europe were SAP, Oracle, Sage, Microsoft, and Infor, and their combined market share amounted to 69 per cent of the entire market.
The ERP on-demand segment increased by 63 per cent in 2006, but this was an insignificant impact on the overall market growth due to its small base, the Western European ERP Applications Competitive Analysis 2007 study reveals.
Lykkegaard said: ‘IDC expects on-demand ERP applications to gain importance over the next five years. While customers might not ask for ERP on-demand today, the changes caused by new delivery models and technologies will transform the ERP market as we know it. New business and delivery models, new partnerships, and focused R&D should be key investment priorities for ERP vendors in 2008.’
Based on a strategic review of the top 10 vendors in terms of opportunities and challenges, IDC recommends three strategic priorities.
For vendors to prepare for new business models, delivery models, and licensing models.
To invest aggressively in the broader partner ecosystem to improve market coverage and implementation capacity and to reduce market risks.
To focus R&D investments to ensure market-leading innovation, this is the only path to double-digit growth.