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Tue 18 May 2004 04:00 AM

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Growth & consolidation

The enterprise resource planning (ERP) market in the GCC countries is set to touch an estimated US$270 million by 2008, while worldwide it will touch US$36 billion.

The enterprise resource planning (ERP) market in the Gulf Cooperation Council (GCC) countries is set to touch an estimated US$270 million by 2008, according to Madar Research Group.

The region’s 15% compound average growth rate (CAGR) over the next four years will see it outstrip global growth, which the Dubai-based research firm puts at 6-8%.

Madar also reports that by the end of 2003 the GCC’s ERP market stood at an estimated US$134 million. Of this, Saudi Arabia’s share was US$80 million, while the UAE accounted for US$28 million.

The combined customer relationship management (CRM) and supply chain management (SCM) market made up the largest component of the ERP market, with a 31% market share, while financial modules followed with 23% and human resources (HR) came in third with 21%.

Worldwide, IDC predicts that the ERP market will reach US$26.7 billion in 2004, compared to the near $25 billion in revenues achieved in 2003.

The analyst house attributes this growth to the general IT spending increase, as well as the pent-up demand for more integrated solutions to boost productivity, profitability and competitiveness. IDC expects the ERP applications market to reach US$36 billion by the end of 2008.

Preliminary estimates from IDC suggest that the top 10 ERP vendors secured 46%, or US$11 billion of the market in 2003, compared to 44.5% in 2002 and 42% in 2001.

The analyst house also predicts yet more consolidation in the market as the top vendors maneuver themselves to take yet more market share.

“ERP market consolidation will continue at a gradual pace, taking it to a different level and providing vendors with new growth opportunities,” says Albert Pang, research director for IDC’s enterprise applications service.

“The remaining cluster of vendors will have the wherewithal to compete successfully in the long term with their aggregated installations, recurring revenues, and R&D and marketing resources,” he adds.

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