Regional software solutions market will touch $500m

Dubai: The software solutions market in the Middle East and North Africa (Mena) is expanding strongly and is expected to touch $500 million (Dh1.83 billion) in 2008, an increase of 28.20 per cent compared to $390 million (Dh1.43 billion) last year, says research firm IDC.

"Several countries in the region, particularly the Gulf states, are investing heavily in modernising and strategically diversifying their economies, spurring tremendous growth in the EAS [enterprise application software] market as a result," said Vinay Nair, senior research analyst, IDC MEA.

In terms of implementation, finance industry leads the list followed by process manufacturing, government and retail sectors.

2006 figures

UAE was the largest EAS market in the Gulf in 2006, registering a growth of 32 per cent, followed by Saudi Arabia with 30 per cent and OGCC (Bahrain, Kuwait, Oman, and Qatar) with 38 per cent.

"In 2007, Saudi Arabia is expected to lead the table with 40 per cent growth followed by the UAE with 36 per cent and OGCC with 24 per cent. This year, Gulf growth is projected to be between 28-29 per cent," Vinay said.

The EAS market in Mena is fuelled by a fierce fight for leadership between rivals Oracle and SAP. In 2006, Oracle led SAP by a close margin followed by 3i Infotech, Microsoft Dynamics and Sage. Together, the top three players controlled 68.5 per cent of the total EAS market. On the country level, though, the top two positions are reversed in some cases.

Although small and medium-sized organisations are now implementing EAS solutions and generating new demand, the strong growth of over 39 per cent year-on-year in 2006 will slow to less than 36 per cent in 2007 and 28 per cent this year.

"In the key verticals like retail, banking, and manufacturing, companies are adopting progressive IT strategies and boosting their EAS investments accordingly"

ERP

Companies across the region invest most heavily in Enterprise Resource Planning (ERP) solutions. This segment soared by a third in 2006 to almost $206 million (Dh756.02 million). Customer Relationship Management as part of enterprise application suites was second most in demand, shooting up by 97.5 per cent year-on-year to $38.5 million (Dh141.3 million). Supply Chain Management was third with a value of $33.80 million (Dh124.04 million), which represents an almost 39 per cent year-on-year increase in spending.