APEJ enterprise software market to reach $30 bn by 2012

NEW DELHI, INDIA: The enterprise software market in Asia Pacific excluding Japan (APEJ) is estimated to grow from $18.2 billion in 2008 to $30 Billion in 2012, representing a compounded annual growth rate (CAGR) of 13.1 percent during this period, said the latest research report titled “Different Hues of Growth: Enterprise Software Market and Forecast 2007-2012” by Springboard Research.

Key findings from the report put China and Australia as the largest software markets in the region respectively, with China the fastest growing at a CAGR of 17.7 percent, nearly double of Australia’s rate of 9.1 percent. India will surpass South Korea by 2011 to become the third largest enterprise software market; ultimately representing 15.6 percent of total APEJ market spending by 2012.

“SaaS and cloud computing, virtualization, collaboration, and open source software are among the Enterprise Software markets that will see strong demand throughout 2009,” said Michael Barnes, VP—Software Research, Springboard Research. “A shortage of IT skills, insufficient local vendor presence and software piracy are among the leading market inhibitors.”

The report added that because of the ongoing financial crisis, there will be a slowdown in ‘infrastructure’ projects involving large middleware license sales over the next two to three years. However, Springboard does not expect dramatic drops in IT spending, particularly ongoing enterprise software-related spending linked to multi-year transformational projects.

“Enterprise-wide SOA initiatives that are not directly linked to well-defined, measurable business imperatives will be far tougher to justify in the current economic climate,” Barnes said. “In contrast, we expect that supply chain management (SCM), business intelligence (BI), enterprise content management (ECM), and other ‘value-driven’ solutions will continue to see strong demand. Web conferencing and other collaboration tools will also see healthy growth as companies reduce spending on travel.”

According to Springboard’s report, application software as a core segment is growing faster than the system and infrastructure software (SIS) segment, though the latter still dominates the market with a share of 59.7 percent in 2008. Within SIS, operating system and database software are the largest individual categories and they together represent 44.5 percent of SIS spending, and 27 percent of overall enterprise software spending in 2008.