The Asia Pacific (AP) business software market will burst into life this year, when it will grow by 8.4 percent to hit US$46 billion, according to Ovum.
Ovum predicts recovery from the global economic downturn will begin in earnest this year for the sector, which did not grow at all in 2010.
The promising outlook means the business software sector will grow at a compound annual growth rate (CAGR) of 8.9 percent over the next four years, reaching revenues of $65 billion in 2015.
The strong growth is driven by exploding volumes of data, increased enterprise mobility, the transition to cloud computing models and the emerging markets, such as huge demand in China and India, although the markets in Japan, South Korea and Australia are expected to show strong single digit growths as well.
The information management software sector will experience the biggest increase in revenues of all the business software areas. This area will grow at a CAGR of almost 11 percent from 2010 to 2015, as businesses grapple with spiralling volumes of data and try to extract business value from them.
“As the global economy continues its recovery, the emphasis of IT investment is moving on from the traditional area of back-office automation and transaction processing, towards the exploitation of information to add value to the business," says Tim Jennings, Ovum chief analyst. “The volume of information within enterprises continues to grow at an astonishing rate and investment is needed both to manage this information, and to turn it into actionable intelligence, through technologies such as business intelligence and analytics.”
Ovum has also released a new vendor rankings analysis, which paints a picture of the companies that are dominating the software space. Microsoft continues to be the AP’s number one software company with more than 15 percent market share. It is followed by IBM, Oracle and SAP, in second, third and fourth place respectively. Ovum principal analyst Richard Edwards comments: “Microsoft is still a major player and market maker, with revenues of $6.6 billion in 2010 in AP. The company has gained huge mass and velocity over the past 20+ years, and this looks set to sustain the company in the short and medium-term.
“However its level of innovation is not keeping pace with the rest of the market – it is doing just enough to stay in the game, but is not a star performer.”
Although information management software will experience the strongest growth, Ovum’s figures show all the sectors will enjoy a healthy outlook. The security software market will grow by a CAGR of 10 percent from 2010 to 2015, while applications software will grow by a CAGR of 9.7 percent for the same period.
“Organisations are breaking away from the shackles of desktop IT, and providing mobile workers with access to systems from any location and any device. The mobile revolution will generate strong demand for mobile applications, as well as for the development and management platforms to support this shift," Jennings says. “Although it is still relatively early days for cloud computing, growth will accelerate over the next five years, as organisations move further towards a software-as-a-service model and take their data centres towards the hybrid combination of public and private cloud infrastructure. This will generate new demand for both infrastructure and application services.”
The emerging markets will also make a substantial contribution to the strong growth the software sector is set to experience. Jennings adds: “Emerging markets around the world have an insatiable appetite for technology-driven expansion, often unencumbered by the constraints of peers in mature markets.”
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