Gartner Predicts Solid Growth for Enterprise Applications in 2012

By | Jun 22, 2012
Topic: CRM/ERP

A new report from Gartner predicts that the market for business applications will continue to expand over the course of this year. This is great news for midsize firms targeting the enterprise market, but the report also shows certain aspects of IT growing faster than others, predicting trends in computing that all IT managers should be aware of.

The Growth of Enterprise Applications

The Gartner report, which it is entitled "Forecast: Enterprise Software Markets, Worldwide, 2011-2016, 2Q2012 Update," takes a look at the market for applications in the enterprise and attempts to predict how application spending will shift over the rest of the year. The report shows mostly positive movement in enterprise this year, although the second quarter update does pare back some earlier predictions.

Overall, as noted in this eWeek article, the enterprise software market is expected to reach $120.4 billion in 2012, which represents a 4.5-percent increase over 2011 spending. While still impressive, this growth rate has been adjusted downward slightly, from a prediction of five percent earlier in the year.

Enterprise resource planning (ERP) leads the way, expected to account for $24.9 billion of the spending on enterprise applications, according to this Business Wire press release. Office suites will also have an expectedly strong showing, with $16.5 billion. Next come business intelligence (BI) and customer relationship management (CRM), both expected to be at $13 billion. The proximity of BI and CRM to office suites just further proves how the world of IT is rapidly changing, and how Big Data, along with social media, will determine the new face of IT over the coming years.

The Rise of Cloud Solutions

The report also recognizes a shift in the industry due to the rise of cloud computing. Gartner expects that spending will move away from large suites of applications and into applications that assist in the automation of processes. In connection with this, more and more organizations are requiring functionality as a service, whether that's infrastructure, platform, or software, and are extremely open to having the software delivered via the cloud.

This shift toward cloud computing is underway not just for the functionality that the cloud has to offer, but also because subscription-based services and pay-as-you-go models make sense during trying economic times. While some of the actual cost benefits remain in dispute, cloud providers have been able to successfully market their products as a low-cost alternative to traditional IT solutions, and with the obvious benefits that the cloud can provide, enterprises are moving there in droves.

For mid-market IT managers, the report shows that the sluggish economy is not really having much of an impact on IT applications, which means that IT tasks are now being viewed as more important than ever. New technologies are changing how business gets done, and company executives are realizing that now is the worst time to cut IT spending. Midsize businesses are at a special risk when it comes to technology, as an abandonment of IT innovation for cost-cutting reasons could have a significant impact on the company's bottom line within a few years, especially if the company's direct competitors continue to invest in BI and CRM applications.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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