This IDC study examines the market for procurement software that is growing at a great clip at a CAGR of 9.1%; it's expected to reach $6.6 billion by 2020. Demand for public cloud (at a CAGR of 18.5%) is clearly outpacing that for on-premises/other software (at a CAGR of -1.8%.) However, the on-premises market remains significant as medium-sized and large enterprises are choosing to maintain existing software rather than disrupt the critical integrated processes and data required to procure the needed materials, parts, services, and supplies. Most of the on-premises procurement is part of a larger ERP implementation and will change as ERP is moved to the cloud.
"Procurement applications continue to be extremely important to the overall business. Organizations recognize a procurement suite that enables the business to do more with less while focusing on cost savings and reducing supply risk. As more intelligence from the supply base and supply markets is required to make sound supply choices, intelligent procurement systems will continue to drive the growth in the market," says Mickey North Rizza, program vice president, Enterprise Applications.