Modernisation and digital transformation projects are supporting growth in the enterprise application software market, a new study has found.
Research from Gartner discovered that global spending on enterprise application software will rise 7.5 per cent to $149.9 billion in 2015, increasing to over $201 billion in 2019.
As well as this, long term growth in spending will rise through modernisation, functional expansion and digital transformation projects, with marketing, e-commerce and advanced analytics software showing the highest growth.
Some 45 per cent of respondents with knowledge of their organisation’s software strategy found that one of the top five IT project priorities is “application modernization of installed on-premises core enterprise applications”.
In addition, another 41 per cent indicated that “extending capabilities of core enterprise applications” is a top five priority.
Bianca Granetto, research director at Gartner, said: “The majority of spending is going towards modernizing, functionally expanding or substituting long-standing business and office applications with cloud-based software-as-a-service.
“Projects have been approved and budgeted for, often over a multiyear period, meaning the pace of spending and adoption isn't subject to any impending urgency.”
Gartner also predicts that, by 2020, 75 per cent of application purchases supporting digital business will be “build” and not “buy”.
The study also found that many organisations are supporting a new kind of “build” that does not include “out-of-the-box” technology, as there is instead a combination of application components that are differentiated and innovative.
Gartner also believes the cloud will have a big impact on the sector in the coming years, with 15 per cent of business users expected to be provisioned in whole or part by the cloud.
Posted by Jon Aspinell on 1st September 2015
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