Businesses Spending More on Enterprise Software

Businesses might be slow to hire new workers, but they’re opening their wallets to buy enterprise software, according to fresh projections from Gartner.

A new forecast from the research firm suggests that spending on enterprise software will grow 6.4 percent this year, accelerating ever so slightly to 6.6 percent next year. IT services will enjoy a similar boost, more than doubling from 2.2 percent this year to 4.6 percent in 2014. Data-center systems will also double by the end of next year, along with telecom services.

Numbers-wise, worldwide IT spending will hit $3.7 trillion in 2013—a 2 percent increase from 2012, but somewhat less than Gartner forecast earlier this year (the firm blames that shortfall on fluctuating exchange rates). Customer Relationship Management (CRM) is helping drive much of the growth on the software side of things, as more and more businesses integrate vendors’ platforms into their respective e-commerce and social initiatives. But there’s also less demand for operating systems and digital-content creation software, as Software-as-a-Service (SaaS) offerings have managed to transfer much of that respective functionality to the cloud.

Gartner’s predictions align with those of other research firms. In December 2012, IDC predicted that investments in Big Data software, for instance, would grow to $10 billion in 2013, driven by increased business interest; it also said that businesses would spend close to $65 billion on industry-specific solutions.

Still other research firms have suggested that CRM, SaaS, and collaboration platforms will help drive software growth for at least two years in the future.

That’s good news for any IT vendors, including startups, which are building the next-generation enterprise platforms: the money fueling that market doesn’t seem likely to go away anytime soon. But it’s also a double-edged sword: more money and opportunity means more competition, which means at least some of those vendors likely won’t survive when their offerings go head-to-head against rivals.

 

Image: Gartner