TECH SUPPLIER Nov 2020 - Market Forecast - Doc # EUR145314720

European Enterprise Performance Management Forecast, 2020-2024

By: Erica SpinoniResearch Analyst, European Software, Alexandros StratisResearch Manager, Philip CarnelleyAVP, European Software Group

Abstract

The EPM applications forecast in this study concludes the following:

  • The total European market accounts for 8.1% of the total enterprise resource management (ERM) spend in the region for 2019, and it is expected to reach $2 billion in the forecast period. The EPM market has relatively moderate growth compared with other functional markets in the ERM space — order management (9.6%) and project and portfolio management or PPM (6.2%) — markets that are smaller than EPM. Yet EPM is forecast to grow at 4.5% CAGR, and the market is still characterized by organizations' focus on planning capabilities and their need for comprehensive solutions to assist in their strategic planning.
  • As with the overall ERM market, there is a divide between northern, southern, and eastern European economies —there are stronger growth rates in the U.K., some northern countries (Sweden and Norway), France, and Austria, while Italy, Greece, Portugal, and Spain are lagging in terms of growth rates and total market size. In the CEE region, Czech Republic is leading the pack with 5.1% CAGR, though it is a small market in terms of revenue ($7.8 million in 2019, following Russia and Poland). In 2019, over half the market is concentrated in the U.K., Germany, and France, which accounted for 50.9% of the total European EPM market.
  • Small businesses and large enterprises are now generally persuaded of the merits of using packaged solutions via a public cloud services (PCS) model with its more flexible subscription model, ease of use, new user interfaces, and better user experiences; this is driving growth in the PCS segment and acts as a growth engine for the EPM market. The public cloud services segment grew 37.5% YoY in 2019 to reach 18.3% of the market. IDC forecasts a 2019–2024 CAGR of 18.9% for this segment. However, there is a substantial installed base of on-premises solutions that will continue for the foreseeable future.
  • In 1H20, SAP and Oracle were the market leaders with 44.2% of the market (30.5% and 13.7%, respectively), followed by Anaplan and IBM. These four vendors accounted for more than half of the total European revenues, capitalizing on cloud and self-service offerings. In terms of growth, Anaplan was the leader (46.4%), followed by Workday (40%).
  • The potential impact of Brexit on the region's economic climate, coupled with major negative impacts of the COVID-19 pandemic, will pressure European businesses to reduce spending or face even harsher competition. However, IDC forecasts a slow but steady recovery over the forecast period with 3.3% growth for the region by 2024 based on increasing cloud penetration and greater demand from organizations for software solutions with embedded analytics and cognitive capabilities.

This IDC Market Forecast study provides analysis and sizing of the European EPM applications market for 2017-1H20 and a forecast for 2020–2024. The study segments the EPM applications market by deployment model (PCS and on-premises) and country.

"The enterprise performance management software market is the fourth-largest market in the ERM domain, accounting for 8.1% of a growing addressable market. There is increasing demand for higher integration of financial applications with analytics and Big Data capabilities, while customers require greater insights from different data sources, connecting back-end data to front-end operations," said Alexandros Stratis, research manager, IDC European Software Group. "The COVID-19 pandemic has renewed customers' interest on advanced planning and forecasting capabilities, along with the integration of data throughout the enterprise, with an emphasis on arriving at a single version of the truth and better planning for any eventuality."


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