Gartner Survey Reports ERP Software Spending at $24.9 Billion

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Gartner Inc. has revealed its latest evaluation of the enterprise software market revealing that spending will total around $120.4 billion in 2012, an increase of 4.5 percent from 2011. Although it is still an increase, the latest projection is actually lower than the original from Q1, reflecting the confusing nature of the current market.

According to this Marketwatch report, topping the list of enterprise software spending is enterprise resource planning (ERP) software at $24.9 billion, making it the largest enterprise application market. Second to ERP are office suites at $16.5 billion. Spending in 2012 will primarily focus on industry-specific applications, integration of business software systems, upgrades, enhancements of current software, and subscriptions to software as a service (SaaS).

Companies looking to offset some of the capital expenses in 2012 will look to cloud solutions which they can subscribe to as SaaS and afford through operating budgets. Many vendors are therefore offering more "pay-as-you-go" solutions. Microsoft in particular offers  its Dynamics ERP systems (Dynamics GP, SL, AX, and NAV) in on-premise versions, as well as partner-hosted or Microsoft-hosted cloud versions, providing customers with a variety of options.

According to Tom Eid, Gartner vice president, "After more than a decade of SaaS and cloud service use, adoption continues to grow and evolve within the enterprise application markets. This is occurring as tighter capital budgets demand leaner alternatives, popularity and familiarity with the model increase, and interest in SaaS and cloud computing grows."

Eid expects cloud usage for enterprise software to increase from 11 percent in 2010 to 16 percent by 2015. In the meantime, Microsoft will continue to offer both on-premise and hosted/cloud options for its customers, while also paving the way for future technology and  more tightly integrated business applications.

By ERT Group, Florida Microsoft Dynamics ERP partner

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