Enterprise applications are critical to both an organisation’s resiliency and its digital-first strategy.

The enterprise applications market continued to grow in 2020 as organizations accelerated their digital transformation efforts in response to the business disruptions caused by the COVID-19 pandemic.

According to a new report from International Data Corporation (IDC), the enterprise applications market grew 4.1 per cent year over year in 2020 with worldwide revenues reaching $US241 billion. The top five enterprise application vendors in 2020 were SAP, Salesforce, Oracle, Intuit, and Microsoft, which together accounted for 22.8 per cent of worldwide revenues.

Digital resiliency, the ability for an organisation to rapidly adapt to business disruptions by leveraging digital capabilities to not only restore business operations but also capitalise on changed conditions, became a focal point for organisations in 2020. As the core technology systems that most organisations use to conduct business, enterprise applications are critical to both an organization’s resiliency and its digital-first strategy.

“Digital resiliency is a requirement in the digital-first world. Rapidly adapting to a business disruption requires a business to leverage its digital capabilities within its enterprise application portfolio.

Modular, intelligent applications are helping the organisation leverage the data and gain insights to better maneuver the organization so it can remain resilient and capitalise on the changed conditions,” said Mickey North Rizza, program vice president, Enterprise Applications and Digital Commerce at IDC.

IDC forecasts worldwide revenues for the enterprise applications market will be nearly $US334 billion in 2025 as organisations revamp their applications portfolios to deliver the digital resiliency and flexibility needed to thrive in the digital economy. This will be a gradual process as organisations evaluate their current portfolios, and the many customisations across these applications, and map out a transformation strategy.

Demand for public cloud-based enterprise applications is expected to produce a five-year compound annual growth rate (CAGR) of 13.6 per cent, surpassing the 6.7 per cent CAGR for the overall market and overtaking on-premises software in the next several years.

The enterprise applications market is comprised of the following secondary markets: enterprise resource management (ERM), customer relationship management (CRM), engineering applications, supply chain management (SCM), and production applications. Each of these secondary markets consists of multiple functional markets.

IDC’s software market sizing and forecasts are presented in terms of commercial software revenue. The term commercial software is used to distinguish commercially available software from custom software. Commercial software revenue typically includes fees for initial and continued right-to-use commercial software licenses.

These fees may include, as part of the license contract, access to product support and/or other services that are inseparable from the right-to-use license fee structure, or this support may be priced separately. Upgrades may be included in the continuing right of use or may be priced separately. Commercial software revenue excludes service revenue derived from training, consulting, and systems integration that is separate (or unbundled) from the right-to-use license but does include the implicit value of software included in a service that offers software functionality by a different pricing scheme.

Tags: digital resilienceIDC