Monday, September 20, 2010

Worldwide Enterprise Software Revenue to Surpass $232 Billion in 2010

Worldwide enterprise software revenue is on pace to surpass $232 billion in 2010, a 4.5 percent increase from 2009 revenue of $222.4 billion, according to the latest forecast from Gartner, Inc. The enterprise software market is projected for continued growth in 2011 with revenue forecast to reach $246.6 billion. Through 2014, the market is expected to reach $297 billion at a five-year compound annual growth rate (CAGR) of 6 percent.

Some regions will fare better than others with five-year CAGRs to 2014 varying from 2.7 percent in Western Europe to 11.5 percent in Asia/Pacific. Emerging regions, such as Asia/Pacific and Latin America, which were less affected by the latest economic downturn than the U.S. and Europe, are expected to invest heavily in enterprise software initiatives in the next few years as they continue to round out the IT infrastructures necessary to do business.

Enterprise software spending in North America is forecast to reach $110.8 billion in 2010, an 8.5 percent increase from 2009 revenue of $102.1 billion. The market will experience consistent growth through 2014, when spending in North America will surpass $143.6 billion.

Gartner analysts said enterprise software growth in North America is significantly front-loaded to the first half of the year, as evidenced by stronger vendor earnings in the first half of 2010.

The Europe, Middle East and Africa (EMEA) region will see a fall in enterprise software spending this year. Gartner estimates 2010 revenue at $64.5 billion, a 3.4 percent decline from 2009 revenue of $66.8 billion. In 2010, the majority of software market segments are predicted to see a slight decline in EMEA, although by 2014 the market is expected to reach $76.2 billion.

The slow rebound of the market in Western Europe -- which in 2010 and 2011 is set to post only a mild recovery -- is in striking contrast with Eastern Europe and the MEA region. Gartner analysts said Eastern Europe is proving to be a highly volatile region with a boom and bust tendency, which can bring huge gains to companies that invest during good years (e.g., 2007 and 2008) but great pain in years of recession (e.g., 2009).

Asia/Pacific (excluding Japan) is expected to have the fastest growth in software revenue of all the regions in 2010. The market for enterprise software in Asia/Pacific is estimated to reach $22 billion in 2010, up 13 percent from 2009 revenue of $19.5 billion. Gartner believes that both enterprise application and infrastructure software will demonstrate a strong rebound in 2010, and this positive momentum is expected to continue through 2011.

More information on enterprise software can be found at

No comments: