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The enterprise resource planning (ERP) software market size is estimated to grow by USD 34.73 billion at a CAGR of 10.67% between 2023 and 2028. The growth of the market depends on several factors, including the increased operational efficiency associated with ERP software, the increasing demand for ERP software from SMEs, and the increasing demand for cloud-based applications. Increasing number of cyberattacks is a major factor hindering the market growth.
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Rising demand for ERP software from SMEs is the key factor driving market growth. Software is crucial for enterprises across all end-user organizations that focus on improving their operational and business process efficiency. SMEs, which used standalone applications for each of their business functions, started switching to planning software that allows the integration of multiple functions into a single integrated application. In addition, SMEs are migrating from paper-based operations to system-based automation software for their business analysis and operations.
Moreover, planning software is being implemented across SMEs for better management of their business operations through a centralized management system with improved collaboration, productivity, simplified compliance, and risk management. These factors are significantly driving the adoption of SMEs. The utilization of cloud-based applications across different verticals is also enhancing the growth of software. Cloud-based solutions are further reducing the installation, maintenance, and operating costs for SMEs. Thus, such factors will propel the growth of the market during the forecast period.
Embedded data analytics features are the primary trend shaping market growth. Resource planning software architecture and design are also evolving to support real-time data. Modern systems leverage transactional data and in-memory computing to enable advanced reporting and analytics on the data. These capabilities are being incorporated within the software architecture, allowing the users to execute/run simulations without the need for standalone analytic applications, which, in turn, drives market growth. Moreover, extended analytical capabilities embedded within the software can help enterprises improve their response time to the planning software market demand for their products. Thus, such factors will propel the growth of the market during the forecast period.
The rising threat from open-source software is a challenge that affects market growth. The inflated cost of software led to the growing adoption of open-source software. The adoption is garnering attention across developing countries such as India and China. SMEs across various verticals, which do not have enough capital investments, tend to adopt open-source software. Large companies with a cost reduction strategy also prefer the adoption of open-source software. However, open-source software provides basic functionalities that are suitable only for small companies.
In addition, open-source software has various disadvantages, such as data management issues, low-quality support, and poor implementation plans. These issues pose a serious threat to an enterprise's operation. Thus, an increase in the adoption of open-source software can pose a challenge for the vendors offering on-premise and cloud-based solutions during the forecast period. Therefore, such factors may impede the growth of the market during the forecast period.
The market share growth by the cloud based segment will be significant during the forecast period. The global market is undergoing a technological shift driven by the advent of cloud computing. The revenues from the cloud-based segment have grown at a rapid rate over the last five years, and the trend is expected to continue during the forecast period. The cloud-based segment is expected to dominate the market and account for a major contribution to the incremental growth of the market during the forecast period.
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The cloud based segment showed a gradual increase in the market share of USD 19.09 billion in 2018. Cloud-based software is typically hosted in remote data centers, allowing users to access the software through the Internet. The low upfront costs of cloud-based are driving its adoption across organizations, especially among SMEs that have limited IT budgets and resources. Cloud-based software offers several benefits, such as real-time application performance analytics, regular security updates, global accessibility from any location, and scalability. Therefore, such factors are expected to drive the growth of the cloud-based segment in the global market during the forecast period.
The manufacturing industry leverages enterprise performance management applications for collecting, analyzing, and streamlining its operations data with its business strategies. The analyzed data is used to enhance production operations, improve decision-making processes, and improve sales strategies. Enterprise performance management applications are majorly adopted by manufacturing companies for strategic planning and execution, improving cost visibility and production processes, financial planning, budgeting, and forecasting. Manufacturing companies using enterprise performance management applications also analyze their operational and production data to estimate the optimum utilization of resources and forecast customer demands. Hence, such factors are expected to drive the growth of the global market in the manufacturing end-user segment during the forecast period.
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North America is estimated to contribute 42% 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 software is one of the major segments of the enterprise market in North America. The US and Canada are the major revenue contributors to the market in this region. Enterprises in the region are early adopters of applications. However, future investments by enterprises in software in this region will be driven by their need to integrate existing platforms with advanced technologies such as blockchain, AI, and the Internet of Things (IoT)-enabled applications and data analytics.
Moreover, market players that offer in-built application programming interfaces (APIs) for these advanced technologies will have the opportunity to generate additional revenues through product upgrades and maintenance fees. Furthermore, an increase in the need for business process efficiency and transparency through digital transformation is also driving the adoption of software in this region. Thus, such the advantages of software are expected to drive the growth of the market in North America during the forecast period.
The market 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 market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
Companies 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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Enterprise Resource Planning (ERP) Software Market caters to businesses and government entities worldwide, including Japan, offering comprehensive control over various business processes. Software solutions facilitate decision-making, ensuring efficient project management and inventory management. With modules for distribution and deployment, ERP systems streamline activities, enhancing productivity among employees. As digitization accelerates, ERP software adapts to the evolving needs of consumers, providing availability across devices and instances.
Competitors like Microsoft Corporation and IBM Corporation drive development, offering hybrid ERP solutions to meet diverse challenges. Start-ups also enter the market, leveraging ERP for knowledge management and growth. The market witnesses continuous expansion, driven by the demand for integrated solutions to manage complex business operations efficiently. As businesses increasingly rely on ERP systems, the market for ERP software continues to grow, providing robust solutions for various industries worldwide.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
Market Scope |
|
Report Coverage |
Details |
Page number |
180 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.67% |
Market Growth 2024-2028 |
USD 34.73 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
9.11 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 42% |
Key countries |
US, Canada, Mexico, China, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Acumatica Inc., Citrix Systems Inc., Computer Generated Solutions Inc., Dassault Systemes SE, Ellucian Co. LP, Epicor Software Corp., IFS World Operations AB, Koch Industries Inc., Microsoft Corp., Odoo SA, Oracle Corp., Roper Technologies Inc., Sage Group Plc, Salesforce Inc., SAP SE, ServiceNow Inc., SYSPRO Pty. Ltd., TOTVS SA, Unit4 Group Holding B.V., and Workday Inc. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
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. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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