Signs of recovery for ERM slump

Signs of a recovery in the enterprise resource management (ERM) software market are emerging following a drop in revenue last year that hampered vendor expectations.

Australia's ERM software market revenue totalled $359 million in 1999, a six per cent drop in growth over 1998, falling short of earlier vendor projections.

According to IDC's enterprise application software analyst, Selinna Chin, this result has hampered vendor projections for the year 2000 but the beginnings of a recovery are now emerging.

Chin said the Australian ERM software market is the most mature in the Asia-Pacific region, excluding Japan, which accounts for 34.3 per cent of the total region.

However, this is a decline from the previous year's market share of 42 per cent.

"The use of integrated enterprise application suites or ERP systems will continue to grow in 2000 and most suite leaders have already reported the beginnings of a recovery," Chin said.

In 1999, manufacturing was the largest industry segment driving the sales of ERM solutions representing 33.4 per cent of all installations.

The distribution sector followed at 23.6 per cent and the government has emerged as a strong segment in the market since 1998 now accounting for 6.5 per cent.

Chin believes the main ERM growth areas in 2000 will be services related to revenue.

"As e-business, extended enterprise applications and CRM are being implemented, integration of such applications will heavily emphasise service and consulting capabilities," she said.

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