Worldwide spending on enterprise application software will grow 7.5% to reach $149.9 billion this year, increasing to more than $201 billion by 2019, according to the latest forecast from Gartner Inc. The firm says long-term growth in the market will involve plenty of SaaS solutions and analytics software.
"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," Bianca Granetto, research director at Gartner, said in a statement.
"Projects have been approved and budgeted for, often over a multi-year period, meaning the pace of spending and adoption isn't subject to any impending urgency," Granetto said.
The market segments showing the highest growth rate during the forecast period of 2014 through 2019 will be marketing, e-commerce and advanced analytics software, Gartner says.
The research firm identified a number of key trends in the application software market that affect the spending forecast, including the modernization of core enterprise applications; transitioning to new consumption models; and the rise of market dynamics related to digital business.
In addition, organizations will extend or replace human capital management systems with software-as-a-service (SaaS) offerings; increasingly build applications rather than buy them; move more systems and applications to the cloud; and adopt more advanced analytics capabilities.
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