Banking, manufacturing and the oil and gas industry have helped drive a 12.5% growth in spend on enterprise application software (EAS) across the region, according to analysts IDC.
According to the IDC’s Arab Middle East and North Africa (MENA) Software Solutions 2010-2020 Forecast study, those industries accounted for 40% of EAS investment last year helping to create a market worth almost US$210million.
In 2005, the size of the region’s EAS sector expanded 16% to US$187million according to the figures.
Vinay Nair, senior analyst, software at IDC Middle East and Africa (MEA), explained: “Although small and medium-sized businesses (SMBs) are now implementing EAS solutions and generating new demand, leading vendors are in a heated battle for clients.”
“The primary arena has been mainly the large enterprise segment and the replacement market, but the price-slashing and aggressive sales approach have spilled into the SMB segment, creating a buyer’s market despite the high demand.”
Saudi Arabia was the largest EAS market in the MENA region followed by the UAE in 2005, and that trend looks set to continue this year.
Together, the GCC countries represented over 80% of EAS expenditure, and as Saudi and the UAE experienced the fastest growth last year, both look set to repeat this feat over the next two years.
“North Africa will be the most dynamic market in the medium term. In terms of EAS and IT in general, it is still underdeveloped and there is a great deal of pent-up demand,” Nair added.
Five vendors in particular benefited from this increased expenditure and accounted for over 75% of EAS sales: SAP, Oracle, Microsoft Dynamics, 3i Infotech and Sage.
SAP and Oracle led the market with Microsoft Dynamics occupying a distant third place.
“Globally, competition between vendors extends beyond the implementation of EAS solutions to the application platform itself. Fortunately in the MENA mid-market, many organisations have yet to commit to an EAS solution and migrating from one platform to another will not be a cumbersome or costly process,” Nair stated.
“This means vendors will need cogent arguments, not just for adoption of EAS, but also for the long-term benefits of their preferred platform.”
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