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Trends in enterprise software development

Posted on September 2, 2022December 28, 2022 By Victor Fasano
software development

The total revenue of the 13 largest software and ICT business service providers, including telecom operators, in this market reached $613 billion in 2021, which is 10% more than a year earlier. This is evidenced by the data of analysts from Synergy Research Group, published on December 21, 2021.

Global expenses of the companies for the corporate software in 2020 increased by 4.1% in comparison with the 2019th and reached $241 billion. Analysts of IDC reported about it in a research, extracts from which are published on September 16, 2021.

Experts named companies SAP, Salesforce, Oracle, Intuit and Microsoft as leaders of the market of business software, on which at the end of 2020 in the amount 22.8% of sales were the share. Shares of vendors separately are not specified.

Enterprise software at IDC includes products such as enterprise resource management (ERM) and customer relationship management (CRM) systems, engineering applications, supply chain management (SCM) solutions, manufacturing solutions, and others.

Analysts say the growth of the global enterprise software market is due to companies actively investing in their digital resilience to cope with the negative effects of the COVID-19 pandemic. The deteriorating economic situation has spurred organizations to digitally transform their businesses.

In IDC terminology, digital resiliency, which is the ability of companies to quickly adapt to emerging challenges by using information technology to restore business and capitalize on changing conditions, has become the focus of organizations in 2020. In this environment, enterprise software is critical to digital resilience and the implementation of a digital transformation strategy.

Digital sustainability has become a prerequisite in the digital world. Rapidly adapting to the challenges facing businesses requires companies to leverage digital capabilities within their enterprise application portfolio, said IDC analyst Mickey North Rizza. – Modular intelligent applications help businesses use data and gain insights to better maneuver so companies can stay resilient and capitalize on changing conditions.

IDC expects global enterprise software sales to reach $334 billion by the end of 2025. The main driver of this rise will be the desire of companies to update their applications to achieve the digital resilience and agility they need to thrive in the digital economy. Enterprise-grade public cloud spending is expected to grow at 13.6% per annum, outpacing the overall market (+6.7%) and on-premises desktops.

IDC expects global enterprise software sales to reach $334 billion in 2025. Moreover, IDC cites the results of its survey of business representatives, according to which the proportion of companies planning to increase investment in enterprise software in 2020 increased to 64% from 33% a year earlier. Among small and medium-sized businesses, this figure increased from 27% to 59%, and among large organizations – from 42% to 72%. The main focus of these investment strategies is on:

  • improving client applications to protect and increase revenue growth opportunities;
  • investments in modular systems to improve operations, finance, manufacturing, purchasing, supply chain, facilities, distribution, HR and other functions.
  • add, extend, and end workflows with task apps (TaskApps) to increase automation;
  • understanding the current state and future state of the enterprise, from on-premise and hybrid models to cloud and integrated packages, to improve the entire digitally driven organization.

The market of corporate software from positions of Gartner

The world market of the software of an enterprise class at the end of 2020 grew by 8.8% in dollar terms, analysts of Gartner counted (the data were published in May, 2021). However, they did not specify the indicator in monetary terms.

According to the researchers, the most pronounced growth in 2020 was demonstrated by such segments as database management systems (DBMS), mail services, customer relationship management systems, etc.

Gartner named Microsoft as the leader of the global business software market. Analysts gave the second position to Oracle, the third to SAP. At the same time, the shares of these manufacturers are not specified.

Gartner is noticing the surge in demand in 2020 for collaboration and video conferencing tools such as Zoom, Microsoft Teams and Cisco Webex. The high interest in these platforms is caused by the consequences of the COVID-19 coronavirus, which led to a massive transition of companies to a remote work format. According to analysts, global spending on software for collaboration, communication of employees and the organization of corporate social networks at the end of 2020 reached $3.8 billion. In the 2021st growth of a 17 percent segment, up to $4.5 billion is expected.

The need to hastily move away from office work while keeping businesses afloat has given impetus to many markets, including those for collaboration and enterprise social media, said Craig Roth, Gartner vice president of research and co-author of the study. “These products went from ‘nice to have’ to ‘must have’ in just a few weeks.

Among the segments examined in the study, collaboration tools such as Asana, Trello, and Monday.com were the most powerful growth drivers for the entire enterprise software market as companies sought to digitize “out of the box” task management and coordination processes that would otherwise case would require work with e-mail.

Tracking and coordinating work outside of formal project plans became much more difficult when you couldn’t ask a colleague through the wall for status. These instruments, already on the rise in demand, received an additional boost during the pandemic.

Gartner predicts that by 2025, 65% of enterprise software will include some form of collaboration functionality. Manufacturers themselves contribute to the development of this trend. So, Microsoft decided to embed the corporate messenger Microsoft Teams will be available as part of the Dynamics 365 product set, and Salesforce plans to deeply integrate the technology of the acquired Slack company (one of the market leaders in collaboration services) with its products.

Experts associated the growth in sales of business software with technological transformation projects that companies are implementing to solve the problems of the digital economy. In these initiatives, state-of-the-art software that enables automation, communication capabilities and insight into the future market provides a critical competitive advantage, the report says.

According to experts, enterprise solutions are the engine of business because they provide important data, intellectual and computing tools necessary for the functioning of a business in a digital economy, and every area of \u200b\u200bbusiness in a company depends on many applications.

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