The global enterprise applications market will see a modest increase of just three per cent this year, analysts have predicted.
According to a report by AMR Research, the sector will grow to a total market size of $36.9bn (£22.3bn) by the end of 2003, and will enjoy long-term growth of six per cent.
The analyst company said that, while the forecast is modest, the outlook is positive with an emphasis on smaller, incremental purchases.
The firm's cautiously optimistic outlook is attributed to an improving economic climate, pent-up demand for new application projects, and the increased penetration of major enterprise resource planning (ERP) vendors in markets like supply chain management and customer relationship management (CRM).
AMR predicts that the ERP market will grow from a projected $20.6bn in 2003 to $21.6bn in 2004, as ERP's integration, internal controls and cost savings have been well received in the current economic environment.
The analyst expects continued market consolidation as larger ERP vendors and investment firms make acquisitions to increase the size of their customer base and expand into new horizontal, vertical, or geographic markets.
For the CRM market, which dipped one per cent in 2002, AMR expects traditional products like sales force automation and customer service and call centres to enjoy growth.
In the long term, AMR expects nine per cent annual growth, with the market reaching $10.8bn in 2004.
Supply chain management is predicted to grow to $6bn in 2004, up from an expected $5.6bn in 2003, fuelled by a continued focus on cost savings and the increasing complexity of corporate supply chains.
Products from the major ERP vendors should enjoy healthy growth on the supply chain planning side, but overall the highest rise is expected in supply chain execution applications like order fulfilment and inventory management.
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