Cloud to be critical driver for enterprise apps growth in Asia: IDC

Asia/Pacific excluding Japan (APeJ) enterprise applications (EA) software market posted a mediocre growth of 5.1 percent in 2013, unlike 2012 when the market grew 9 percent. According to the market research firm, Asian enterprises were more cautious about their investment in 2013.

Although organisations were keen in upgrading existing back-office applications to embrace the third platform technologies - cloud, analytics, mobility, and social - watchful spending strategy of customers and the ad hoc nature of deployments did not warrant for sustained growth in 2013, the new IDC report stated.

 Cloud to be critical driver for enterprise apps growth in Asia: IDC


"The third platform technologies, especially cloud, will be a critical driver for enterprise applications growth in APeJ. Enterprises are moving from an ad hoc deployment of cloud-based applications and other third platform technologies, to a phase of strategic implementation. This new era of digital transformation and the speed of innovation of Asian businesses is expected to bring the market back on track in 2014 and through the forecast period," said Sabharinath Bala, research manager of IDC's Asia/Pacific Enterprise Application Software Research.

It was the usual suspects - SAP, Oracle, Yonyou, Infor, and Microsoft - that dominated in the region from a market share perspective, but most of these major vendors were challenged strongly by niche new players as well as the established SaaS/Cloud-based applications vendors.

Some of the names noteworthy of mentioning include Cornerstone OnDemand, Kronos, NetSuite, Workday, and Xero - all of which posted strong double-digit growth in 2013.

"Although most of the major vendors have been creating new internal IP, as well as acquiring assets and expanding their cloud capability inorganically, the challenge of integrating these new resources with their existing portfolio and convincing clients and prospects to take the cloud path remained critical in attracting newer EA investments. But this scenario is slowly changing and vendors that rely primarily on maintenance and upgrade revenue for their existing legacy systems will start losing relevance in the coming days. Vendors offering cloud-based systems capable of delivering the agility, flexibility, and scalability of the dynamic Asian businesses, will trump them in their own game," added Sabharinath.

IDC expects the overall EA market to grow at a compound annual growth rate (CAGR) of 8.4 percent and reach $9.5 billion in 2018. Double-digit growth is expected from markets like enterprise asset management, logistics, and procurement; and there will be strong support from mature markets like financial accounting, human capital management, and inventory management.

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Updated Date: Jul 09, 2014 11:50:54 IST