AMR: Enterprise apps to reach $78 billion by 2004

Enterprise applications -- software typically used by big businesses -- will itself remain big business for years, according to a study released Monday by AMR Research.

The enterprise applications market will grow from $US27 billion in 1999 to $78 billion in 2004, a compound annual growth rate of 24 percent, according to the study. This growth will be fueled by enterprise applications for supply chain management (SCM), e-business relationship management (ERM) and e-commerce, AMR's study predicts.

Enterprise resource planning (ERP) applications made up 64 percent of the enterprise applications market in 1999 but will fall to less than a third of the market in 2004, AMR's study concludes. The research firm predicts that the ERP market growth will slow to 5 percent a year, increasing from $16.9 billion in 1999 to $21.4 billion in 2004.

The top five ERP vendors -- SAP AG, Oracle, PeopleSoft, J.D. Edwards and Co., and GEAC SmartEnterprise Solutions -- are in flux and being challenged by new market dynamics, allowing new players to gain ground, according to a statement from AMR. These five market leaders account for 62 percent percent of the total market revenue, and will find new opportunities in ERM, SCM and e-commerce markets.

E-commerce, which made up only 6 percent of the enterprise applications market last year, will more than triple its share to 20 percent in 2004, according to the study. AMR predicts companies like Oracle and Broadband will sell $16 billion in e-commerce software in 2004 -- 10 times more than last year's $1.7 billion.

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