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The enterprise application software market is estimated to grow at a CAGR of 7.7% between 2022 and 2027. The size of the market is forecast to increase by USD 123.32 billion. The growth of the market depends on several factors, including the introduction of cloud-based deployment solutions, the growing need to enhance business efficiency, and the increasing demand for ERP software from SMEs.
This report extensively covers market segmentation by deployment (on-premises and cloud-based), solution (enterprise resource planning, analytics and business intelligence, customer relationship management, supply chain management, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The introduction of cloud-based deployment solutions is notably driving the market growth, although factors such as data privacy and security concerns may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The introduction of cloud-based deployment solutions is notably driving market growth. Applications or software that can be accessed remotely and is hosted on the vendor's server on the client's behalf are referred to as cloud-based services. IT resources delivered over the internet are referred to as cloud services. Public clouds, private clouds, and hybrid clouds, which combine public and private clouds, all offer these services. Scalable IT infrastructure and business agility are effectively delivered by cloud-based solutions. This attribute of cloud-based services aids in getting around the difficulties of hardware, license administration, and software.
Furthermore, vendors are launching a lot of cloud-based enterprise application software as a result of the rising demand for cloud-based solutions. For instance, in October 2020, Oracle Corp. launched Oracle Banking Virtual Account Management Cloud Service, which allows banks to quickly deploy a wide range of banking services that help their corporate customers access their cash position and manage working capital easily at any time. Therefore, the launch of similar solutions will drive growth in the market during the forecast period.
The increasing adoption of the remote working model is an emerging trend in market growth. With more people working remotely, there is an increasing need for cloud-based software that enables sharing and collaboration as well as guarantees seamless enterprise-wide data transfer, business management, and communication. Additionally, the COVID-19 pandemic compelled businesses to adopt enterprise application software like CRM, ERP, and SCM, which allows them to conduct business operations by connecting and communicating with their clients and employees remotely while also ensuring their safety.
Small and medium-sized businesses and startups have been adopting the work-from-home model, which is anticipated to accelerate the growth of the global market. Moreover, organizations are also considering implementing a hybrid working culture in preparation for the post-pandemic era. As a result, they are spending money on trustworthy enterprise application software and solutions to make sure that business processes are effective and efficient. Hence, such factors are anticipated to propel the growth of the global market during the forecast period.
Data privacy and security concerns are major challenges impeding market growth. As they are more affordable and accessible, cloud-based solutions are preferred by many business organizations over on-premises alternatives. Therefore, the best option for organizations with limited resources and expertise is a cost-effective cloud-based solution with better features and agility. As a result, the cloud has been integrated into government organizations' IT systems. Since the cloud offers better information and communication management with centralized data storage and high-speed networks, federal, state, and local government agencies around the world are migrating their sensitive employee data there. This has the effect of boosting productivity, improving data sharing, and fostering collaboration.
However, as they become dependent on cloud computing service providers, organizations have less control over data. As cloud storage serves as a gateway for security threats and privacy-related problems, many end users are also concerned about the data security policies of cloud-based solutions. Therefore, the risks associated with data privacy and security in enterprise application software are expected to hamper the growth of the market in focus during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Enterprise Application Software Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BMC Software Inc. - The company offers products such as BMC Helix Service and Operations Management, TrueSight IT Operations and Automation, Mainframe, and Control-M Workflow Orchestration. The key offerings of the company include enterprise application software such as human resource management systems.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the on-premises segment will be significant during the forecast period. In comparison to cloud-based solutions, this model is more secure. Large organizations, that care more about functionality and security than costs incurred, largely control this market segment. As these organizations primarily deal with sensitive information, they tend to rely more on the on-premises model because it is safer due to end-to-end quality control and the absence of outside interference.
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The on-premises segment was valued at USD 116.07 billion in 2017 and continued to grow until 2021. The real-time monitoring of business processes is made possible by on-premises deployments. Since they only require licenses or copies of software solutions bought from independent software vendors, such deployments also guarantee the complete security of enterprise data, including source codes, version enhancements, and source code change histories. The high costs associated with moving from an on-premises to a cloud-based model are also causing the growth momentum of the on-premises model. Thus, owing to such factors the segment is expected to grow during the forecast period.
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North America is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The two countries that contribute the most revenue to the North American market are the US and Canada. The adoption of enterprise application software in the area is being driven by a rise in the demand for business process transparency and efficiency through digital transformation. In recent times, it is getting difficult for global organizations to maintain separate databases for every department. Issues with data integrity are the result of this. Through the provision of a single, integrated solution that enables data pooling from all the databases that are dispersed throughout all departments, enterprise application tools can assist organizations in overcoming these difficulties. This reduces the duplication of data as well as the time involved in accessing data and helps enterprises generate high-quality reports and enhance business efficiency. These advantages of enterprise application software are driving the growth of the market in this region.
The demand for enterprise application software in the US is rising as various end-user industries, including banking, financial services, insurance (BFSI), and healthcare, have become more digitalized. Healthcare organizations choose cloud-based solutions to handle difficult problems relating to laws like the General Data Protection Regulation or coping with the data explosion brought on by digital transformation initiatives. Additionally, the presence of important vendors like Microsoft Corp., Oracle Corp., and Salesforce.com Inc. will have a favorable effect on the local market during the forecast period. For instance, in May 2020, Salesforce.com Inc., a global leader in customer relationship management (CRM), announced Work.com, new technology solutions, and resources to help business and community leaders across the world reopen safely, re-skill employees, and respond efficiently to the challenges thrown up by the COVID-19 pandemic. Such factors will boost regional market growth during the forecast period.
In 2020, the market in North America witnessed a slowdown owing to the COVID-19 outbreak. However, various IT companies provided the work-from-home option to their employees and gradually started opting for cloud-based enterprise application software to manage the remote workforce. The increased adoption of cloud-based enterprise application software fuelled the regional market. Moreover, with the resumption of business activities in 2021, the demand for on-premises enterprise application software has increased. This, in turn, is expected to drive the growth of the regional market during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the global enterprise application software market as a part of the global application software market within the global IT software market. The parent global application software market covers companies that are engaged in developing and producing application and system software. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Enterprise Application Software Market Scope |
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Report Coverage |
Details |
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Page number |
173 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 7.7% |
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Market growth 2023-2027 |
USD 123.32 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
6.98 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 37% |
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Key countries |
US, Canada, China, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accenture Plc, BMC Software Inc., Broadcom Inc., Capgemini Service SAS, Cognizant Technology Solutions Corp., Epicor Software Corp., Guidewire Software Inc., IFS World Operations AB, International Business Machines Corp., Intuit Inc., Koch Industries Inc., Oracle Corp., QAD Inc., Salesforce.com Inc., SAP SE, SYSPRO Pty. Ltd., TP and P Technology, Virtusa Corp., Zendesk Inc., and Zoho Corp. Pvt. Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by Solution
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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