During 2012 the worldwide Enterprise Resource Planning (ERP) market experienced sluggish growth of just 2.2%, yet Software-as-a-Service (SaaS), financial management and Human Capital Management (HCM) applications showed potential for breakout growth.
Through the challenging times of the previous year however,
Key Take-Aways
- Overall market growth of just 2.2% and the top ten vendors owning 64% of the worldwide ERP market is leading Gartner to predict further consolidation of the industry.
- SAP had just over $6B in total ERP software revenue in 2012, leading the worldwide market with 24.6% market share.
Oracle had $3.12B and Sage, $1.5B in software revenues for 2012. Oracle’s market share was 12.8%, and Sage, 6.3%. The following graphic shows worldwide ERP market share for 2012.
- Infor achieved 49.5% revenue growth in 2012, increasing their 2011 sales from $1B in 2011 to $1.5B in 2012. Their market share increased from 4.2% in 2011 to 6.2% in 2012.
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Microsoft achieved 4.2% revenue growth in 2012, increasing revenue from $1B in 2011 to $1.1B in 2012. The majority of these sales are for the Microsoft Dynamics AX ERP system. - The fastest growing ERP vendors in 2012 include Workday, Cornerstone OnDemand, WorkForce Software, Ventyx and NetSuite.
- Workday grew 114.7% in 2012, increasing revenue from $88.6M in 2011 to $190.3M in 2012.
- Cornerstone OnDemand grew 61.5% in 2012, increasing revenue from $58.4M in 2011 to $94.3 in 2012.
- WorkForce Software grew 39.8% in 2012, increasing revenue from $11.8M in 2011 to $16.5M in 2012.
- NetSuite grew 34% in 2012, increasing revenue from $139.7M in 2011 to $187.1M in 2012.
- SaaS-based ERP revenues are projected to grow from 12% worldwide in 2013 to 17% in 2017. The following graphic from the report Gartner’s Market Trends: SaaS’s Varied Levels of Cannibalization to On-Premises Applications published: 29 October 2012 shows this progression. You can find a research roundup at the previous post SaaS Adoption Accelerates, Goes Global in the Enterprise, which provides additional insights into which factors are driving SaaS adoption.
Bottom line: SAP’s continued market dominance depends on how well the company orchestrates it core ERP strategy with the following areas: BusinessObjects 4.0, its highly regarded analytics suite; social application adoption (SAP Jam); the many Cloud-based initiatives they have including SuccessFactors and BusinessbyDesign; mobility platform wins; and major wins with their SAP Sybase DBMS and HANA architectures.