22 Jul 2020

Worldwide Enterprise Applications Revenue Grew 7.5% to Nearly $225 Billion in 2019, According to IDC

FRAMINGHAM, Mass., July 22, 2020 – Fueled by ongoing digital transformation investment, a new report from International Data Corporation (IDC) shows that worldwide revenue in the enterprise applications market grew 7.5% year over year in 2019 to $224.6 billion. The top 5 enterprise applications vendors in 2019 were SAP (7.7% revenue share), Oracle (5.1% share), Salesforce (5.0% share), Intuit (3.0% share), and Microsoft (2.1% share).

As businesses undergo digital transformation to meet the challenges of the digital economy, modern software with its properties of automation, connectivity, and visibility has become critical to achieving competitive advantage. Enterprise applications are the engine of the business, providing the data, intelligence, and computational tools necessary to function in the digital economy and every line of business within an organization depends on multiple software applications to function.

"Digital transformation initiatives are bringing impactful changes to organizations such as the ability to work anywhere and anytime, identifying new insights because of cognitive and predictive processes, and reshaping the enterprise experience using modern and cloud-based enterprise applications," said Mickey North Rizza, program vice president, Enterprise Applications and Digital Commerce at IDC, "Enterprise applications are the foundation of business processes, employee engagement, and customer experience."

Several trends currently impacting the enterprise applications market include:

  • IDC expects the worldwide enterprise applications market to have a five year compound annual growth rate (CAGR) of 3.4% with revenues reaching $265.7 billion by 2024.
  • The share of public cloud software revenue is forecast to grow from 40.3% in 2019 to 56.8% in 2024, as growth opportunities move heavily in favor of cloud applications.
  • Enterprise application vendors are enabling new use cases for enterprise applications by utilizing big data/analytics and machine learning to bring more actionable insights across a broader workstream.
  • Vendors are also working to automate lower-level tasks within the applications. IDC expects this trend to continue and to be a key factor in determining market positioning among enterprise application vendors in the future.

The enterprise applications market consists of the following secondary markets: enterprise resource management, customer relationship management, engineering applications, supply chain applications, and production applications. Each of these secondary markets consists of multiple functional markets.

IDC's software market sizing and forecasts are presented in terms of commercial software revenue. The term commercial software is used to distinguish commercially available software from custom software. Commercial software revenue typically includes fees for initial and continued right-to-use commercial software licenses. These fees may include, as part of the license contract, access to product support and/or other services that are inseparable from the right-to-use license fee structure, or this support may be priced separately. Upgrades may be included in the continuing right of use or may be priced separately. Commercial software revenue excludes service revenue derived from training, consulting, and systems integration that is separate (or unbundled) from the right-to-use license but does include the implicit value of software included in a service that offers software functionality by a different pricing scheme.

The IDC report, Worldwide Enterprise Applications Market Shares, 2019: Year of Digital (IDC #US46573220), reviews vendor shares for the enterprise applications market, which saw strong growth in 2019. The report also provides worldwide revenue share by geographic region and by deployment type. Examples of technology-driven use cases are included to illustrate business workflows from across the enterprise that are undergoing digital transformation. The report, Worldwide Enterprise Applications Software Forecast, 2020–2024 (IDC #US46573320), provides IDC's forecast for the enterprise applications software market.

In an IDC webinar scheduled for August 13th at 12:00 pm U.S. Eastern time, software analysts Eric Newmark and Mickey North Rizza will discuss the current state of the enterprise software market and whether the COVID-19 pandemic has finally pushed enterprise application customers to the cloud. Details and registration for this webinar can be found at https://bit.ly/3eOMPgI.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.