June 23, 2011 – Worldwide enterprise software revenue is on pace to surpass $267 billion in 2011, a 9.5 percent increase from 2010 revenue of $244 billion, as users around the world push to update their systems, according to Gartner Inc.

The enterprise software market is projected for continued growth in 2012, with revenue forecast to reach $288 billion. Enterprise infrastructure software spending is on pace to a $153.3 billion total in 2011, a 9 percent increase from 2010. The market is led by the operating systems, in which revenue is projected to reach $32.6 billion in 2011, followed by database management systems revenue at $25.5 billion.

Worldwide enterprise application software spending is forecast to total $114.4 billion in 2011, a 10.2 percent increase from 2010 spending of $103.8 billion. Enterprise resource planning is the largest segment within the enterprise application software market, expected to reach $23.3 billion, followed by office suites with $15.7 billion.

In terms of spending dollars available, Joanne Correia, managing vice president at Gartner, says the focus across the globe has been getting old, outdated systems upgraded and augmented. “Because of only a 9 percent increase, you can’t just rip it out and replace it.”

“The average enterprise has 500 applications, which is pushing IT to get an understanding of what they have and what they’re using. Since maintenance is 57 percent of an IT budget, to get new dollars, you must push the maintenance line down to buy new.”

Technology is one of the areas that people invest in, even in a sluggish environment, Correia says. “but IT must work to make the technology work for business to keep their jobs,” she emphasizes.

“The biggest hole is between line of business and IT. [Line of business] won’t invest unless it gets them new customers and markets or ability to increase their valuation. Throwing IT at IT for IT’s sake is just not there anymore.”

Correia says the bottom line message for IT is to better manage cost controls, customers and efficiencies in supply chains help to meet business needs.

Additional information is available in the Gartner report "Forecast: Enterprise Software Markets, Worldwide, 2008-2015, 2Q11 Update." http://www.gartner.com/resId=1724639.

 

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