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Enterprise Software Market is in Recovery Mode

Middle East : 21 September 2010

As the global market for enterprise software begins to grow, the Mideast market could be stalled

Analyst firm Gartner stated that the global market for enterprise software is on the road to recovery, but the Middle East area may be moving slower.

The global revenue for the enterprise software industry is set to hit $232 billion this year, a 4.5 per cent increase from the $222.4 billion reached last year.  The 2011 revenue is forecasted to reach $246.6 billion and with that growth rate compounded annually, should hit $297 billion by the year 2014.

Managing VP at Gartner, Joanne Correia noted that despite a decline of 2.6% last year, the enterprise-level software market is on the rise with a growth pattern continuing into the future.  End users are investing funds into new software systems as the old systems become stale and new security measures and alignments are required.

There are variances in the growth rates across different regions, according to Gartner.  The United States and Western Europe are experiencing slower growth than emerging markets that have been rising by nearly 11.5 per cent CAGR.  In North America this market is expected to continue growing.  It rose 8.5 per cent from 2009 to 2010, hitting $110.8 billion this year and is expected to climb up to $143.6 billion by 2014.

In Europe, Middle East and Africa (known as the EMEA region), the infrastructure software markets shrank 3.4 per cent from last year to the current year, landing at $66.8 billion.  This region’s market should climb up to $76.2 billion in the coming five years.  Eastern Europe is experiencing stronger growth than its Western counterpart.

Middle East and Africa account for 6 per cent of the total market for enterprise software in the EMEA.  Virtualization software, security measures, web conferences, collaborations and intelligence software for business are the segments growing at the quickest rate.

Fabrizio Biscotti, director of research in the team responsible for enterprise software at the Technology and Service Provider Research organization, issued a warning that the markets in the Middle East that concentrate on oil exports would experience slower growth.

Although the MEA area has historically been one of sharp growth in the IT industry due to the rapidly expanding economy, the recent financial crisis hit some important IT hubs in the region leaving them scared and on a slow road to recovery.

Many of the oil producers in the area connect their IT spending limits with the amount of revenue coming in from oil exports.  Since the slower global recovery is having an effect on energy exports, it is also putting a damper on the amount of funds invested in IT.  This is not seen across the board and is only part of the reasoning, but when the situation is viewed overall, according to Biscotti it is obvious that there are more obstacles for Middle East business software spending to overcome.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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